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EXHIBIT 10.4
DIVESTITURE BONUS AGREEMENT
THIS DIVESTITURE BONUS AGREEMENT (the "Agreement") is made and entered
into as of this __ day of April, 1997, by and between MEDAPHIS CORPORATION, a
Delaware corporation ("Medaphis"), and the individuals whose names appear under
the caption "Grantees" on the signature page of this Agreement ("Grantees").
W I T N E S S E T H
WHEREAS, Healthcare Recoveries, Inc. ("HRI") is a wholly owned
subsidiary of Medaphis;
WHEREAS, Medaphis has determined that it is appropriate and desirable
for Medaphis to divest itself of its ownership of Healthcare Recoveries, Inc.
("HRI") and may sell for its account, in an underwritten initial public
offering ("IPO"), 100% of the shares (the "Offered Shares") of Common Stock of
HRI owned by Medaphis; and
WHEREAS, HRI has determined that, in the event of an IPO, it is
appropriate and desirable to grant a bonus equal to 2% of the shares (the
"Bonus Shares") of Common Stock of HRI to certain members of the HRI management
team, to be issued immediately following the closing of the IPO;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth in the Agreement, the parties agree as
follows:
SECTION 1. GRANT OF SHARES.
1.1. TRANSFER. Upon the successful completion of the IPO, as
determined under Section 1.2, Medaphis shall promptly transfer to each of the
persons listed below that percentage of the Bonus Shares (adjusted for stock
splits and capital adjustments) listed next to such person, as provided below:
Grantee Percentage Grant
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Xxxxxxx X. XxXxxxxx 40%
Xxxxxxxx X. Xxxxxxx 18%
Xxxxxx X. Xxxxx 10%
Xxxxxxx X. Xxxxxx 10%
Xxxxx X. Xxxxxxx 7.5%
Xxxxx X. Xxxxxx 7.5%
Others 7%
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The 7% of the Bonus Shares granted to "Others" shall be granted, as
determined by Xxxxxxx X. XxXxxxxx in his sole discretion, to any employee or
employees of HRI, excluding Xx. XxXxxxxx.
1.2. COMPLETION OF IPO. The IPO shall be deemed to be completed for
purposes of Section 1.1, upon the receipt of the proceeds of the sale of the
Offered Shares by Medaphis.
1.3. TAXES. Simultaneously with the issuance of the Bonus Shares,
the individuals set forth in Section 1.1 shall pay to Medaphis amounts Medaphis
determines to be required for income and other tax withholding under federal
and state tax law.
1.4. TERM. The term of this Agreement shall be for a period of six
months commencing on the date of this Agreement and expiring on the six month
anniversary of that date. If the IPO is not completed on or before the end of
the term, then Medaphis shall have no obligation to issue the Bonus Shares.
1.5. EMPLOYMENT. No Bonus Shares shall be issuable to a Grantee
unless the Grantee is an employee of HRI on the date of the completion of the
IPO, except that (i) this Section 1.5 shall not apply to Xxxxxxxx X. Xxxxxxx,
and (ii) this Section shall not apply if a Grantee's employment with HRI has
been terminated by HRI without cause prior to the date of completion of the
IPO.
1.6. MEDAPHIS DISCRETION. Grantees acknowledge and understand that
Medaphis has the discretionary authority to decide for any reason or reasons
not to complete the IPO and that in such event the Bonus Shares would not be
issuable to Grantees.
1.7. RESTRICTIONS ON SHARES. Grantees acknowledge and understand
that the Bonus Shares are not registered and may not be sold except in reliance
on Rule 144 under the Securities Act of 1933, as amended. Each Grantee shall
enter into a lockup agreement for up to 180 days from the closing of the IPO,
in form and substance satisfactory to Bear, Xxxxxxx & Co., Inc. No Grantee may
sell more than one-half of the Bonus Shares granted to such Grantee until the
expiration of one year from the closing of the IPO. Such shares may bear an
appropriate restrictive legend, which shall be removed upon written request
accompanied by an opinion of counsel acceptable to HRI stating that such legend
may be removed in conformity with applicable law.
SECTION 2. MISCELLANEOUS.
2.1. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Georgia, without regard
to Georgia's conflict of law rules.
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2.2. BINDING EFFECT. This Agreement shall be binding upon the
parties and their respective heirs, representatives, successors, transferees
and permitted assigns. No assignment by any party is permitted without the
written consent of all other parties.
2.3. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
2.4. ENTIRE AGREEMENT. This Agreement is intended by the parties
hereto to be their complete agreement with respect to the subject matter of
this Agreement, and this Agreement supersedes any prior agreements or
understandings (oral or written) with respect to the subject matter between the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MEDAPHIS CORPORATION
By:
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Name:
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Title:
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GRANTEES
Signature:
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Xxxxxxx X. XxXxxxxx
Signature:
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Xxxxxxxx X. Xxxxxxx
Signature:
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Xxxxxx X. Xxxxx
Signature:
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Xxxxxxx X. Xxxxxx
Signature:
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Xxxxx X. Xxxxxxx
Signature:
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Xxxxx X. Xxxxxx
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