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EXHIBIT 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of May 1, 2000,
is by and between IASIS Healthcare Corporation, a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Executive has experience beneficial to the Company's
operations, management and business development of acute care hospitals,
outpatient facilities and ancillary medical services (the "Business"); and
WHEREAS, the Company desires that the Executive serve as Executive Vice
President and Chief Financial Officer of the Company and the Executive desires
to hold such positions under the terms and conditions of this Agreement; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of the Executive with
the Company.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree
as follows:
1. EMPLOYMENT. The Company hereby employs the Executive and
the Executive hereby accepts employment with the Company, upon the terms and
subject to the conditions set forth herein.
2. TERM.
(a) Subject to termination pursuant to Section 10 hereof,
the term of the employment by the Company of the
Executive pursuant to this Agreement (as the same may
be extended, the "Term") shall commence on February 1,
2000 (the "Effective Date"), and terminate on the fifth
anniversary thereof.
(b) Commencing on the fourth anniversary of the Effective
Date and on each subsequent anniversary thereof, the
Term shall automatically be extended for a period of
one (1) additional year following the expiration of the
otherwise applicable Term unless, not later than ninety
days (90) prior to any such anniversary date, either
party hereto shall have notified the other party hereto
in writing that such extension shall not take effect.
3. POSITION; LOCATION. During the Term, the Executive shall
serve as Executive Vice President and Chief Financial Officer of the Company,
supervising the Company's financial and information systems and performing such
other duties as the Board of Directors of the Company (the "Company Board")
shall determine, which duties shall not be materially inconsistent with the
duties to be performed by executives holding similar offices in similarly-sized
healthcare corporations. The Executive shall report directly to C. Xxxxx Xxxxx,
President and Chief Executive Officer. The Company agrees to nominate the
Executive for a position on the Company Board promptly following the date hereof
and thereafter during each election of directors held during the Term, and the
Executive agrees to serve, without any
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additional compensation (other than customary director fees paid or benefits
conferred as and to the extent paid to or conferred on members of the board of
directors who are members of management or designees of substantial stockholders
of the Company), as a director on the Company Board and the board of directors
of any subsidiary of the Company, and/or in one or more chief executive officer
positions with any subsidiary of the Company. The parties acknowledge and agree
that during the Term (i) the Executive's principal office will not be moved to a
location more than 20 miles from Metropolitan Nashville and Davidson County,
Tennessee without his approval and (ii) the Company shall maintain, in the
organizational documents thereof, indemnification provisions providing for the
maximum indemnification permitted by applicable law of the Executive by the
Company for actions taken in his capacity as an officer, director or employee
thereof.
4. DUTIES. During the Term, the Executive shall devote his
full time and attention during normal business hours to the business and affairs
of the Company.
5. SALARY AND BONUS.
(a) During the Term, the Company shall pay to the
Executive a base salary at the rate of $350,000 per year. Commencing on or
before the first anniversary of the Effective Date, the Company Board shall
review the base salary annually and may increase such amount from time to time
as it may deem advisable (such salary, as the same may be increased, the "Base
Salary"). The Base Salary shall be payable to the Executive in substantially
equal installments in accordance with the Company's normal payroll practices.
(b) For the Company's fiscal year ending September 30,
2000, and for each fiscal year thereafter during the Term, the Executive shall
be eligible to receive an annual cash bonus equal to up to one hundred percent
(100%) of the Base Salary, subject to the terms of the Company's executive bonus
program to be adopted by the Company Board, the principal terms of which are set
forth on EXHIBIT A hereto (the "Bonus Plan"), or, to the extent more favorable
to the Executive, other incentive compensation plan established by the Company
Board for the Company's senior executive officers, as either of the same may be
amended from time to time (provided that no such amendment or alternative plan
shall materially diminish the benefits available to the Executive upon
satisfaction of the conditions of such plan).
6. STOCK OPTION PLAN; INITIAL GRANT OF OPTIONS. Reference is
made to the IASIS Healthcare Corporation 2000 Stock Option Plan to be adopted by
the Company Board and, if applicable, the stockholders of the Company, the
principal terms of which are set forth on EXHIBIT B hereto (the "Stock Option
Plan"). Promptly following adoption of the Stock Option Plan, the Company shall
grant the Executive options under the Stock Option Plan (the terms of which
shall not be inconsistent with the provisions of Sections 10(e) and 10(f) below)
to purchase a number of shares of common stock of the Company equal to not less
than nine percent (9%) of the total number of shares for which options are
available under the Stock Option Plan. Thereafter during the Term, the Executive
shall be eligible to participate in the Stock Option Plan or, to the extent more
favorable to the Executive, other equity plan established by the Company Board
for the Company's senior executive officers, as the same may be amended from
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time to time (provided that no such amendment shall materially diminish the
benefits to Executive thereunder), as and to the extent other senior executive
officers participate in the same.
7. VACATION, HOLIDAYS AND SICK LEAVE. During the Term, the
Executive shall be entitled to paid vacation, paid holidays and sick leave in
accordance with the Company's standard policies for its senior executive
officers; provided that the Executive shall during each year of the Term be
entitled to at least four (4) weeks of such vacation, which shall not accrue
from year to year.
8. BUSINESS EXPENSES. The Executive shall be reimbursed for
all reasonable and necessary business expenses incurred by him in connection
with his employment (including, without limitation, expenses for travel and
entertainment incurred in conducting or promoting business for the Company) upon
timely submission by the Executive of receipts and other documentation in
accordance with the Company's normal expense reimbursement policies.
9. OTHER BENEFITS. During the Term, the Executive shall be
eligible to participate fully in all health and other employee benefit
arrangements available to senior executive officers of the Company generally;
provided that (i) the Company agrees in any event to provide major medical,
disability and life insurance coverage in amounts substantially consistent with
such coverage at similarly-sized healthcare corporations and (ii) the Company
agrees to institute, within one hundred eighty (180) days of commencement of
operations, a 401(k) savings program and other retirement plans as considered
and approved by the Company Board and make employer contributions thereto on the
Executive's behalf.
10. TERMINATION OF AGREEMENT. The Executive's employment by
the Company pursuant to this Agreement shall not be terminated prior to the end
of the Term hereof except as set forth in this Section 10.
(a) BY MUTUAL CONSENT. The Executive's employment pursuant
to this Agreement may be terminated at any time by the mutual written agreement
of the Company and the Executive.
(b) DEATH. The Executive's employment pursuant to this
Agreement shall be terminated upon the death of the Executive, in which event
the Executive's spouse or heirs shall receive, when the same would have been
paid to the Executive (whether or not the Term shall have expired during such
period), (i) all Base Salary and benefits to be paid or provided to the
Executive under this Agreement through the Date of Termination (as defined in
Section 10(h) hereof) and (ii) Base Salary at the then-current rate of Base
Salary and benefits to be provided pursuant to clause 9(i) above through the
date one (1) year after the Date of Termination. In the case of health and
medical continuation coverage ("COBRA"), the Company will make all COBRA premium
payments on behalf of the Executive and his dependents (and the Company will
continue to pay that portion of the coverage then-currently paid by the Company)
until the earlier to occur of the date of cessation of benefits as provided
above or the end of the maximum period of COBRA eligibility under
then-applicable law.
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(c) DISABILITY. The Executive's employment pursuant to
this Agreement may be terminated by written notice to the Executive by the
Company or to the Company by the Executive in the event that (i) the Executive
becomes unable to perform his duties as set forth in Section 3 by reason of
physical or mental illness or accident for any six (6) consecutive month period
or (ii) the Company receives written opinions from both a physician for the
Company and a physician for the Executive that the Executive will be so
disabled. In the event the Executive's employment is terminated pursuant to this
Section 10(c), the Executive shall be entitled to receive, when the same would
have been paid to the Executive (whether or not the Term shall have expired
during such period), (i) all Base Salary and benefits to be paid or provided to
the Executive under this Agreement through the Date of Termination and (ii) Base
Salary at the then-current rate of Base Salary and benefits to be provided
pursuant to clause 9(i) above through the date one (1) year after the Date of
Termination; PROVIDED, HOWEVER, that amounts payable to the Executive under this
Section 10(c) shall be reduced by the proceeds of any short or long-term
disability payments to which the Executive may be entitled during such period
under policies maintained at the expense of the Company as and to the extent
such disability payments compensate the insured for lost wages resulting from
the disability. In the case of COBRA, the Company will make all COBRA premium
payments on behalf of the Executive and his dependents (and the Company will
continue to pay that portion of the coverage then-currently paid by the Company)
until the earlier to occur of the date of cessation of benefits as provided
above or the end of the maximum period of COBRA eligibility under
then-applicable law.
(d) BY THE COMPANY FOR CAUSE. The Executive's employment
pursuant to this Agreement may be terminated by written notice to the Executive
("Notice of Termination") upon the occurrence of any of the following events
(each of which shall constitute "Cause" for termination); (i) the Executive
commits any act of gross negligence, fraud or wilful misconduct causing material
harm to the Company, (ii) the conviction of the Executive of a felony that would
reasonably be expected by the Company Board to adversely affect the Company or
its reputation, (iii) the Executive intentionally obtains material personal
gain, profit or enrichment at the expense of the Company or from any transaction
in which the Executive has an interest which is adverse to the interest of the
Company, unless the Executive shall have obtained the prior written consent of
the Company Board, or (iv) any material breach of the Executive of this
Agreement, including, without limitation, a material breach of Section 13
hereof, which breach remains uncorrected for a period of fifteen (15) days after
receipt by the Executive of written notice from the Company setting forth the
breach. In the event the Executive's employment is terminated pursuant to this
Section 10(d), the Executive shall be entitled to receive all Base Salary and
benefits to be paid or provided to the Executive under this Agreement through
the Date of Termination and no more.
(e) BY THE COMPANY WITHOUT CAUSE. The Executive's
employment pursuant to this Agreement may be terminated by the Company at any
time without Cause by delivery of a Notice of Termination to the Executive. In
the event that the Executive's employment is terminated pursuant to this Section
10(e), the Executive shall be entitled to receive (i) on or prior to the Date of
Termination, all Base Salary and benefits to be paid or provided to the
Executive under this Agreement through the Date of Termination, (ii) an amount
equal to two hundred percent (200%) of the Executive's Base Salary at the
then-current rate of Base Salary, (iii) in the event that (A) the Company's
actual aggregate earnings before interest, taxes, depreciation and amortization
("EBITDA") for the twelve (12) month period ending on the last day of the month
prior to the month in which such Notice of Termination is delivered to the
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Executive (for purposes of this Section 10(e), such 12-month period, the
"Trailing Employment Year") shall equal or exceed the aggregate budgeted EBITDA
as reflected in the monthly budgets prepared by the Company with respect to such
period and (B) the Company's EBITDA for any nine (9) months during the Trailing
Employment Year, considered individually, shall equal or exceed the budgeted
EBITDA as reflected in the budgets prepared by the Company with respect to such
months, an amount equal to two hundred percent (200%) of the base target bonus
(e.g., in the case of the Bonus Plan for the fiscal year ending September 30,
2000, fifty percent (50%) of the Executive's base salary) set forth in the Bonus
Plan for the fiscal year in which such Notice of Termination is delivered and
(iv) a lump sum payment equal to the then present value of all other benefits to
be provided pursuant to clause 9(i) above through the date two (2) years after
the Date of Termination, provided that under such circumstances the Executive
shall make all COBRA premium payments on his own behalf. The sum of the amounts
described in clauses (ii), (iii), if any, and (iv) above are hereafter referred
to as the "Severance Amount." Fifty percent (50%) of the Severance Amount shall
be paid to the Executive no later than ten (10) days following the Date of
Termination and the balance of the Severance Amount shall be paid to the
Executive in twenty four (24) equal monthly installments commencing on the first
day of the month immediately following the Date of Termination. Additionally, in
the event that the Executive's employment is terminated pursuant to this Section
10(e), a percentage of the Executive's options to purchase shares of capital
stock of the Company unvested as of the Date of Termination but otherwise
scheduled to vest on the first vesting date scheduled to occur following the
Date of Termination, which percentage shall equal the percentage of the twelve
(12) month period immediately preceding such subsequent vesting date occurring
prior to the Date of Termination, shall immediately vest and become exercisable
on the Date of Termination. In the event that the Executive shall be entitled to
receive a bonus payment pursuant to clause (iii) above, all of the Executive's
options to purchase capital stock of the Company that are vested as of the
applicable Date of Termination or become vested pursuant to the immediately
preceding sentence may be exercised by the Executive at any time within the
twenty-four (24) months following the Executive's Date of Termination
notwithstanding any other provision of the Stock Option Plan or any grant of
options thereunder to the contrary.
(f) BY THE EXECUTIVE FOR GOOD REASON. The Executive's
employment pursuant to this Agreement may be terminated by the Executive by
written notice of his resignation ("Notice of Resignation") delivered within
twelve (12) months after the occurrence of any of the following events (each of
which shall constitute "Good Reason" for resignation): (i) any Change of Control
(as defined below) shall occur, (ii) the removal of the Executive from or the
failure to elect or re-elect the Executive to the position of Executive Vice
President And Chief Financial Officer of the Company, (iii) the removal of the
Executive from or the failure to elect or re-elect the Executive to the Company
Board, (iv) any material reduction by the Company of the Executive's duties or
responsibilities or the assignment to the Executive of duties materially
inconsistent with such position or (v) any breach by the Company of this
Agreement (including the provisions of Section 3), which breach remains
uncorrected for a period of fifteen (15) days after receipt by the Company of
written notice from the Executive. Notwithstanding the provisions of clause (i),
(ii), (iii) or (iv) above, in the event the Executive is elected as executive
vice president and chief financial officer and a member of the board of
directors of any entity which acquires control of more than 50% of the voting
securities of the Company or, if such entity is a subsidiary of another entity,
the ultimate parent of such subsidiary, with responsibility for (A) no fewer
facilities than
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the Company controlled at the end of the fiscal year ending immediately
preceding such Change of Control and (B) operating revenues equal to or greater
than the Company's operating revenues during such fiscal year, and is provided
with a written employment agreement by the entity or, if such entity is a
subsidiary of another entity, the ultimate parent of such subsidiary, on
substantially the same terms as those contained in this Agreement, the
appointment to such position shall not constitute Good Reason for purposes of
this Agreement. In the event that the Executive resigns for Good Reason pursuant
to this Section 10(f), the Executive shall be entitled to receive, (i) on or
prior to the Date of Termination, all Base Salary and benefits to be paid or
provided to the Executive under this Agreement through the Date of Termination
and (ii) the Severance Amount payable at the times and in the manner set forth
in Section 10(e) above, provided that applicable references therein to the date
of delivery of Notice of Termination shall mean reference to the date of
delivery of Notice of Resignation. Additionally, in the event that the
Executive's employment is terminated pursuant to this Section 10(f), a
percentage of the Executive's options to purchase shares of capital stock of the
Company unvested as of the Date of Termination but otherwise scheduled to vest
on the first vesting date scheduled to occur following the Date of Termination,
which percentage shall equal the percentage of the twelve (12) month period
immediately preceding such subsequent vesting date occurring prior to the Date
of Termination, shall immediately vest and become exercisable on the Date of
Termination. In the event that the Severance Amount described in clause (ii)
above shall include a bonus payment as determined pursuant to clause (iii) of
Section 10(e) above, all of the Executive's options to purchase capital stock of
the Company that are vested as of the applicable Date of Termination or become
vested pursuant to the immediately preceding sentence may be exercised by the
Executive at any time within twenty-four (24) months following the Executive's
Date of Termination notwithstanding any other provision of the Stock Option Plan
or any grant of options thereunder to the contrary.
For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred (A) at such time as any Person (as defined in Section
13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934, as amended from
time to time (the "Exchange Act")) or "group" of Persons (as defined in Section
13(d) of the Exchange Act), other than any of the parties to that certain
Stockholders Agreement, dated October 7, 1999, among the Company, JLL
Healthcare, LLC, a Delaware limited liability company, and certain other
stockholders, as the same may be amended (the "Stockholders Agreement"),
directly or indirectly, acquires beneficially or of record, more than 50% of the
outstanding voting securities of the Company (by operation of law or otherwise)
or (B) upon a sale of all or substantially all of the assets of the Company.
(g) BY THE EXECUTIVE WITHOUT GOOD REASON. The Executive's
employment pursuant to this Agreement may be terminated by the Executive at any
time by delivery of a Notice of Resignation to the Company. In the event that
the Executive's employment is terminated pursuant to this Section 10(g), the
Executive shall receive all Base Salary and benefits to be paid or provided to
the Executive under this Agreement through the Date of Termination and no more.
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(h) DATE OF TERMINATION. The Executive's Date of
Termination shall be (i) if the Executive's employment is terminated pursuant to
Section 10(b), the date of his death, (ii) if the Executive's employment is
terminated pursuant to Section 10(c), the last day of the six-month period
referred to in Section 10(c)(i) or the date of delivery of the last physician's
opinion referred to in Section 10(c)(ii), as the case may be, (iii) if the
Executive's employment is terminated pursuant to Section 10(d), the date on
which a Notice of Termination is given, (iv) if the Executive's employment is
terminated pursuant to Section 10(e), sixty (60) days after the date the Notice
of Termination is given; PROVIDED, HOWEVER, that the Company may waive such
notice in the event of a termination pursuant to Section 10(e) in which event,
the Executive's Date of Termination shall be five (5) days after the Notice of
Termination, (v) if the Executive's employment is terminated pursuant to Section
10(f), five (5) days after the date the Notice of Resignation is given and (vi)
if the Executive's employment is terminated pursuant to Section 10(g), one
hundred twenty (120) days after the date the Notice of Resignation is given or
such shorter period as may be determined by the Company.
(i) COMPANY'S FAILURE TO EXTEND TERM. In the event the
Company provides notice of its intent not to extend the Term for any additional
period as provided in Section 2(b) and the Executive is not then in violation of
Section 13 hereof, the Company shall pay to Executive, on the expiration of the
Term, a lump sum payment in an amount equal to the sum of (i) the aggregate
amount of one (1) year of Base Salary at the then-current rate of Base Salary
and (ii) in the event that (A) the Company's actual EBITDA for the twelve (12)
month period ending on the last day of the month prior to the month in which
such expiration of the Term occurs (for purposes of this Section 10(i), such
12-month period, the "Trailing Employment Year") shall equal or exceed the
aggregate budgeted EBITDA as reflected in the monthly budgets prepared by the
Company with respect to such period and (B) the Company's EBITDA for any nine
(9) months during the Trailing Employment Year, considered individually, shall
equal or exceed the budgeted EBITDA as reflected in the budgets prepared by the
Company with respect to such months, an amount equal to one hundred percent
(100%) of the base target bonus (e.g., in the case of the Bonus Plan for the
fiscal year ending September 30, 2000, fifty percent (50%) of the Executive's
base salary) set forth in the Bonus Plan for the fiscal year in which such
expiration of the Term occurs.
(j) CERTAIN TAX MATTERS. Promptly following the execution
of this Agreement, and in any event not later than the next meeting of
stockholders of the Company, the Company will seek the approval of this
Agreement by all of the stockholders of the Company, and, in connection
therewith, will provide such stockholders all material facts concerning payments
hereunder that would reasonably be expected to result in an "excess parachute
payment" within the meaning of Section 280(G)(h) of the Internal Revenue Code of
1986, as amended (the "Code") and the imposition of an excise tax on the
Executive under Section 4999 of the Code. Additionally, prior to any change of
control of the Company that would reasonably be expected to result in an "excess
parachute payment" hereunder, the Company agrees, in the event that no stock on
the Company is readily tradable on an established securities market, to seek the
approval of any such excess parachute payments by all of the stockholders of the
Company (and provide such stockholders all material facts concerning such
payments) as provided in Section 280G(a)(5) of the Code.
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11. REPRESENTATIONS.
(a) The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the Company
and is a valid and binding agreement of the Company enforceable against both in
accordance with its terms. The Company acknowledges that until October 31, 2001,
the Executive is subject to the provisions of a non-competition agreement
providing that the Executive shall not own or be employed by any business which
has significant activities relating to, or has announced intentions to focus
significant resources relating to, the ownership, management or operation of
multi-specialty medical clinics, physician group practices, independent practice
associations, management service organizations or other similar entities (the
"Excluded Businesses"). The Company represents that it does not have significant
activities relating to, and has not announced intentions to focus significant
resources relating to, any of the Excluded Businesses, and the Company covenants
and agrees that it will not, prior to October 31, 2001, engage in or announce
such activities, and agrees to indemnify and hold the Executive harmless from
all claims, costs and expenses (including reasonable attorneys' fees) arising
form any breach of the representations or covenants by Company contained herein.
(b) The Executive represents and warrants that he is not a
party to any agreement or instrument which would prevent him from entering into
or performing his duties in any way under this Agreement.
12. ASSIGNMENT; BINDING AGREEMENT. This Agreement is a
personal contract and the rights and interests of the Executive hereunder may
not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him,
except as otherwise expressly permitted by the provisions of this Agreement.
This Agreement shall inure to the benefit of and be enforceable by the Executive
and his personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder had the Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his devisee, legatee or
other designee or, if there is no such designee, to his estate.
13. CONFIDENTIALITY; NON-COMPETITION; OWNERSHIP OF WORKS.
(a) The Executive acknowledges that: (i) the Business is intensely competitive
and that the Executive's employment by the Company will require that the
Executive have access to and knowledge of confidential information of the
Company relating to the Business, including, but not limited to, the identity of
the Company's employees, physicians, payors or suppliers, the kinds of services
provided by the Company, the manner in which such services are performed or
offered to be performed, the service needs of actual or prospective patients,
physicians or payors, pricing information and other contractual terms,
information concerning the creation, acquisition or disposition of products and
services, creative ideas and concepts, including clinical and financial systems,
compliance programs and physician relation and retention programs, computer
software applications and other programs, research data, personnel information
and other trade secrets, in each case other than as and to the extent such
information is generally known or publicly available through no violation of
this Section 13 by the Executive or such information is readily discernible (the
"Confidential Information"); (ii) the disclosure of any such Confidential
Information may place the Company at a competitive disadvantage and may do
damage, monetary or otherwise, to the Company's business; and (iii) the engaging
by the Executive in any of the activities prohibited by this Section 13 may
constitute improper appropriation and/or use of such Confidential Information.
The Executive expressly acknowledges the trade secret status of the Confidential
Information and that the Confidential Information constitutes a protectible
business interest in the Company. Accordingly, the Company and the Executive
agree as follows:
(b) For purposes of this Section 13, the Company shall be
construed to include the Company and its parents and subsidiaries engaged in the
Business, including any divisions managed by the Executive.
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(c) During the Executive's employment with the Company,
and at all times after the termination of the Executive's employment by
expiration of the Term or otherwise, the Executive shall not, directly or
indirectly, whether individually, as a director, stockholder, owner, partner,
employee, principal or agent of any business, or in any other capacity, make
known, disclose, furnish, make available or utilize any of the Confidential
Information, other than in the proper performance of the duties contemplated
herein, or as expressly permitted herein, or as required by a court of competent
jurisdiction or other administrative or legislative body, the Executive shall
promptly notify the Company so that the Company may seek a protective order or
other appropriate remedy. The Executive agrees to return all documents or other
materials containing Confidential Information, including all photocopies,
extracts and summaries thereof, and any such information stored electronically
on tapes, computer disks or in any other manner to the Company at any time upon
request by the Company and immediately upon the termination of his employment
for any reason.
(d) For a period of two (2) years following the
Executive's Date of Termination (or one (1) year following the expiration of the
Term in the case of the Company's delivery of notice of its intent not to extend
the Term for any additional period as provided in Section 2(b)), whether upon
expiration of the Term or otherwise, the Executive shall not engage in
Competition, as defined below, with the Company or its subsidiaries within fifty
(50) miles of the location of any hospital managed by the Company (or other
facility managed by the Company from which in excess of five percent (5%) of the
Company's annual revenues are derived) at the time of, or within six (6) months
prior to, the Executive's Date of Termination or the expiration of the Term (as
applicable), or in which, during the six (6) months period prior to the
Executive's Date of Termination or the expiration of the Term (as applicable),
the Company had made substantial plans with the intention of establishing
operations in such locality or region. For purposes of this Agreement,
"Competition" by the Executive shall mean the Executive's engaging in
significant activities relating to, or otherwise directly or indirectly being
employed by or acting as a consultant or lender to, or being a director,
officer, employee, principal, agent, stockholder, member, owner or partner of,
or permitting his name to be used in connection with the activities of any
entity engaged in significant activities relating to, the Business; PROVIDED
THAT, it shall not be a violation of this sub-paragraph for the Executive to
become the registered or beneficial owner of up to five percent (5%) of any
class of the capital stock of any one or more competing corporations registered
under the Securities Exchange Act of 1934, as amended, PROVIDED THAT, the
Executive does not actively participate in the business of such corporation
until such time as this covenant expires.
(e) For a period of two (2) years following the
Executive's Date of Termination (or one (1) year following the expiration of the
Term in the case of the Company's delivery of notice of its intent not to extend
the Term for any additional period as provided in Section 2(b)), whether upon
expiration of the Term or otherwise, the Executive agrees that he will not,
directly or indirectly, for his benefit or for the benefit of any other person,
firm or entity, do any of the following:
(i) solicit from any physician or physician group,
payor or supplier doing business with the Company as of the
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Executive's termination, business of the same or of a similar
nature to the business of the Company with such physician,
physician group, payor or supplier;
(ii) solicit from any known potential physician or
physician group, payor or supplier of the company business of
the same or of a similar nature to that which has been the
subject of a known written or oral bid, offer or proposal by
the Company, or of substantial preparation with a view to
making such a bid, proposal or offer, within six (6) months
prior to the Executive's termination; or
(iii) recruit or solicit the employment or services of
any person who was employed by the Company upon termination of
the Executive's employment and is employed by the Company at
the time of such recruitment or solicitation.
(f) The Executive will make full and prompt disclosure to
the Company of all inventions, improvements, formulas, data, programs,
processes, ideas, concepts, discoveries, methods, developments, software, and
works of authorship, whether or not copyrightable, trademarkable or patentable,
which relate to the actual or anticipated business, activities or research of
the Company and either (i) are created, made, conceived or reduced to practice
by the Executive, either alone, under his direction or jointly with others
during the period of his employment with the Company, (ii) result from or are
suggested by work performed by the executive for the Company or (iii) result, to
any extent, from use of the Company's premises or property (all of which are
collectively referred to in this Agreement as "Works"). All Works shall be the
sole property of the Company, and, to the extent that the Company is not already
considered the owner thereof as a matter of law, the Executive hereby assigns to
the Company, without further compensation, all his right, title and interest in
and to such Works and any and all related intellectual property rights
(including, but not limited to, patents, patent applications, copyrights,
copyright applications, and trademarks) in the United States and elsewhere.
(g) The Executive acknowledges that the services to be
rendered by him to the Company are of a special and unique character, which
gives this Agreement a peculiar value to the Company, the loss of which may not
be reasonably or adequately compensated for by damages in an action at law, and
that a breach or threatened breach by him of any of the provisions contained in
this Section 13 may cause the Company irreparable injury. The Executive
therefore agrees that the Company may be entitled, in addition to any other
right or remedy, to a temporary, preliminary and permanent injunction, without
the necessity of proving the inadequacy of monetary damages or the posting of
any bond or security, enjoining or restraining the Executive from any such
violation or threatened violations.
(h) If any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity or
subject, such provisions shall be construed by limiting and reducing them so as
to be enforceable to the fullest extent permitted by law.
14. ENTIRE AGREEMENT. This Agreement contains all the
understandings between the parties hereto pertaining to the matters referred to
herein, and supersedes any other undertakings and agreements, whether oral or in
writing, previously entered into by them with respect thereto. The Executive
represents that, in executing this Agreement, he does not rely and has not
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relied upon any representation or statement not set forth herein made by the
Company with regard to the subject matter or effect of this Agreement or
otherwise.
15. AMENDMENT OR MODIFICATION WAIVER. No provision of this
Agreement may be amended or waived, unless such amendment or waiver is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any party hereto of any breach by another party hereto of
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
16. NOTICES. Any notice to be given hereunder shall be in
writing and shall be deemed given when delivered personally, sent by courier or
facsimile or registered or certified mail, postage prepaid, return receipt
requested, addressed to the party concerned at the address indicated below or to
such other address as such party may subsequently give notice hereunder in
writing:
To the Executive at:
000 Xxxx Xxx Xxxxxx
-----------------------------
Xxxxxxxxx, XX 00000
-----------------------------
Facsimile: (000)000-0000
-----------------------------
With copies to:
Xxxxxxxx & Xxx, PLC
-----------------------------
000 Xxxxxx Xxxxxx, Xxxxx 0000
-----------------------------
Xxxxxxxxx, XX 00000
-----------------------------
Facsimile: (000)000-0000
-----------------------------
Attention: X. Xxxx Xxxxxxxx
-----------------------------
To the Company at:
IASIS Healthcare Corporation
Dover Centre
000 Xxxxxxxx Xxxx, Xxxxx X000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
With copies to:
Xxxxxx Xxxxxxxxxx & Xxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
and
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Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esquire
Any notice delivered personally or by courier under this
Section 16 shall be deemed given on the date delivered and any notice sent by
facsimile or registered or certified mail, postage prepaid, return receipt
requested, shall be deemed given on the date transmitted by facsimile or mailed.
17. SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision hereof shall be validated and shall be enforced to the
fullest extent permitted by law.
18. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
19. GOVERNING LAW; VENUE. This Agreement will be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of law thereof.
20. HEADINGS. All descriptive headings of sections and
paragraphs in this Agreement are intended solely for convenience, and no
provision of this Agreement is to be construed by reference to the heading of
any section or paragraph.
21. WITHHOLDING. All payments to the Executive under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local law.
22. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement on May 1, 2000 to be effective as of the Effective Date.
IASIS HEALTHCARE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Director
-------------------------------
/s/ Xxxx X. Xxxxxxxx
---------------------------------------
Xxxx X. Xxxxxxxx
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Exhibit A
Iasis Healthcare Corporation
Executive Bonus Plan
Fiscal Year Ended September 30, 2000
EBITDA OBJECTIVE:
Fiscal year target $139,400,000
Bottom level 92.50% $128,945,000
Top level 115.00% $160,310,000
TOTAL INDEBTEDNESS OBJECTIVE:
Targeted total long-term debt, net of cash at year end $568,000,000
Bottom level 100.00% $568,000,000
Top level 107.50% $525,400,000
BONUS OF 50% OF BASE SALARY WILL BE COMPUTED BASED ON 75/25 WEIGHTING OF THE
EBITDA AND TOTAL INDEBTEDNESS OBJECTIVES. THE FOLLOWING DEMONSTRATES APPLICATION
OF THE OVER/UNDER FACTORS TO POTENTIAL ACTUAL RESULTS:
ACTUAL ACTUAL 37.5% 12.5%
EBITDA DEBT EBITDA DEBT TOTAL
------ ---- ------ ---- -----
Case I $130,000,000 $605,000,000 3.78% 0.00% 3.78%
Case II $137,500,000 $580,000,000 30.69% 0.00% 30.69%
Budget Case $139,400,000 $568,000,000 37.50% 12.50% 50.00%
Case III $145,000,000 $555,000,000 47.54% 16.31% 63.86%
Case IV $152,500,000 $530,000,000 60.99% 23.65% 84.64%
Case V $160,000,000 $505,000,000 74.44% 25.00% 99.44%
Case VI $167,500,000 $480,000,000 75.00% 25.00% 100.00%
Note: Bonus will be paid after receipt of audited financial statements and
results will exclude items not resulting from the ordinary course of business.
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Exhibit B
IASIS HEALTHCARE CORPORATION
2000 OPTION PLAN
TERM SHEET
NUMBER OF SHARES AVAILABLE 686,566 Shares
EXPIRATION DATE 10 years from xxxxx
XXXXX Each grant will consist of
two parts-a Series I Option
and a Series II Option.
SERIES I OPTIONS Divided into three tranches:
Exercise Price/Number of Shares Tranche A $100 100,969 shares
Tranche B $260 117,797 shares
Tranche C $420 92,555 shares
Vesting Twenty percent of Series I Options
in each tranche vest on each
September 30 through September 30,
2004
SERIES II OPTIONS Divided into three tranches:
Exercise Price/Number of Shares Tranche A $100 121,701 shares
Tranche B $260 141,985 shares
Tranche C $420 111,559 shares
Vesting Twenty percent of Series II Options
in each Tranche will time vest on
each September 30 through September
30, 2004; PROVIDED, HOWEVER, that no
Series II Options shall become
exercisable until the earlier of the
occurrence of a Triggering Event (to
be defined) and seven years from the
date of the grant.
CHANGE OF CONTROL All unexercised Options vest
automatically
TERMINATION OF EMPLOYMENT
For Cause All Options cancelled
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Death or Disability All vested Options may be exercised
for a period of 90 days following
the date of termination.
Without Cause/Good Reason All vested Options may be exercised
Voluntary for a period of 90 days following
the date of termination.
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