SENIOR MANAGEMENT AGREEMENT
THIS AGREEMENT is made as of December 3, 1993, between American Medserve
Corporation, a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx
("Executive").
The Company and Executive desire to enter into an agreement pursuant to
which Executive will purchase, and the Company will sell the number of shares
of the Company's Class B Common Stock, par value $.01 per share (the "Class B
Common") determined in accordance with Section 1(a) below. All of such shares
of Class B Common and all shares of Class B Common hereafter acquired by
Executive pursuant to this Agreement are referred to herein as "Executive
Stock." Certain definitions are set forth in Section 17 of this Agreement.
The execution and delivery of this Agreement by the Company and
Executive is a condition to the purchase of shares of the Class B Common and
the Company's Class A Common Stock, par value $.01 per share (the "Class A
Common"), by Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P., a Delaware limited
partnership (the "Investor"), pursuant to an equity purchase agreement
between the Company and the Investor dated as of the date hereof (the "Equity
Purchase Agreement"). Certain provisions of this Agreement are intended for
the benefit of, and will be enforceable by, the Investor, and the Investor is
an intended third party beneficiary of this Agreement.
The parties also desire to enter into an agreement pursuant to which
Executive shall be employed by the Company as the Company's President and
Chief Executive Officer.
The parties hereto agree as follows:
PROVISIONS RELATING TO EXECUTIVE STOCK
1. PURCHASE AND SALE OF EXECUTIVE STOCK
(a) Executive hereby agrees to purchase from the Company, and the
Company hereby agrees to sell to Executive, an amount of Class B Common
determined in accordance with the following formulae:
(i) If the Original Investment is less than $12.5 million:
[ 11 .21 x Original Investment ]
[ ---- x -------------------------- ] + 10
[ 21 .79 ]
(ii) If the Original Investment is greater than or equal to $12.5
million:
[ 11 12,500,000 ]
[ --- X (.21 x ---------------- ) x Original Investment ]
[ 21 Original Investment ]
[ -------------------------------------------------- ] + 10
[ 1 - (.21 x 12,500,000 ) ]
[ -------------------- ]
[ Original Investment ]
(iii) If the Original Investment is greater than $25 million:
[ 11 .105 x Original Investment ]
[ --- x ----------------------------- ] + 10
[ 21 .895 ]
"Original Investment" shall have the meaning set forth in the Equity Purchase
Agreement. The purchase price per share of Class B Common (the "Purchase
Price") shall equal $69,437.50 divided by the number of shares purchased
hereunder.
(b) The closing of the purchase and sale of the Class B Common (the
"Closing") shall take place at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. on the date of the
Company's first acquisition of another business, which acquisition is
approved by the Investor, or at such other place or on such other date as may
be mutually agreeable to the Company and the Executive. At the Closing, the
Company shall deliver to the Executive stock certificates evidencing the
Class B Common to be 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
$34,718.75 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.
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Executive's obligations under the Executive Note will be secured by a pledge
of all of the shares of Executive Stock to the Company and in connection
therewith Executive shall enter into a pledge agreement in the form of
EXHIBIT B attached hereto.
(c) Within 30 days after the purchase of Executive Stock by Executive
from the Company, Executive shall make 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 will promptly notify the Company of such election.
(d) 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 full 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, 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 a Stockholders Agreement in the form of EXHIBIT C attached hereto.
2. VESTING OF EXECUTIVE STOCK.
(a) FULLY VESTED SHARES. 36.36% of the shares of Executive Stock
purchased hereunder (the "Fully Vested Shares") are vested on the date hereof.
(b) PERFORMANCE VESTING SHARES.
(i) Except as otherwise provided in Sections 2(b)(ii) and
2(b)(iii) below, 18.18% of the shares of Executive Stock purchased hereunder
(the "Performance Vesting Shares") shall vest on the seventh anniversary of
the date hereof, 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 Closing (however, if the end
of the first fiscal year following the Closing occurs within six months of
the Closing, the test described below shall be made at the end of the five
consecutive fiscal years of the Company starting with the end of the second
fiscal year following the Closing), both the Company's EBITDA and EBITDA
Percentage equal or exceed 90% of the Company's'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 Vesting
Shares shall vest 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 Vesting Shares to vest 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
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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
Vesting Shares shall vest as of the end of the second of such two fiscal
years.
(ii) Except as set forth in Section 2(b)(iii) below, in the
event Executive ceases to be employed by the Company for any reason, then
any Performance Vesting Shares which have not become vested on or prior to
such date shall not vest after such date.
(iii) In the event the Company terminates Executive (other
than for Cause or as a result of Executive's death or disability) prior
to the fifth anniversary of the date of the Closing and the Additional
Benefits Requirements (as defined below) are satisfied as determined in
good faith by the Board, the Performance Vesting Shares shall continue to
vest after Executive's termination in accordance with the provisions of
Section 2(b)(i) as if Executive were still employed by the Company.
The "Additional Benefits Requirements" are defined as:
(x) the Company's EBITDA for the 12 months ending as of the
month end immediately preceding the date of Executive's termination
equals or exceeds 85% of the Projected EBITDA for such 12 month
period, provided that if such 12 month period is not one complete
fiscal year of the Company, then the Projected EBITDA for such
period shall be deemed to be a proportionate blend of the Projected
EBITDA for the then current fiscal year and the immediately
preceding fiscal year taking into account the relative number of
months elapsed in each such fiscal year which are part of such
12 month period; and
(y) the Company's EBITDA Percentage as of the end of such 12
month period equals or exceeds 85% of the Projected EBITDA Percentage
as of the end of such 12 month period, provided that if such 12 month
period is not one complete fiscal year of the Company, then the
Company's Projected EBITDA Percentage for such period shall be deemed
to be a proportionate blend of the Projected EBITDA Percentages for
the then current fiscal year and the immediately preceding fiscal
year, taking into account the relative number of months elapsed in
each such fiscal year which are part of such 12 month period.
See attached Appendix 1 for an example of such calculation.
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(c) TIME VESTING SHARES.
(i) Except as otherwise provided in Section 2(c)(ii) below,
45.46% of the shares of Executive Stock purchased hereunder (the "Time
Vesting Shares") will become vested in accordance with the following
schedule, if as of each such date Executive is still employed by the
Company or any Subsidiary:
Cumulative
Percentage of Time
Date Vesting Shares Vested
-------------- ---------------------
At the Closing 20%
1st Anniversary of Closing 36%
2nd Anniversary of Closing 52%
3rd Anniversary of Closing 68%
4th Anniversary of Closing 84%
5th Anniversary of Closing 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 Vesting Shares to become vested 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 Vesting Shares which have not yet become vested
shall become vested at the time of such event. In the event the Company
terminates Executive (other than for Cause or as a result of Executive's
death or disability) prior to the fifth anniversary of the date of the
Closing and the Additional Benefits Requirements are satisfied as of the
date of Executive's termination, all Time Vesting Shares which have not
become vested on such date. Any Time Vesting Shares which have not become
vested as of the date that Executive ceases to be employed by the Company
or its Subsidiaries shall not vest after such date.
(d) Shares of Executive Stock which have become vested (including
the Fully Vested Shares) are referred to herein as "Vested Shares," and all
other shares of Executive Stock are referred to herein as "Unvested Shares."
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 (whether held by Executive or one or more
of Executive's transferees) will
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be subject to repurchase by the Company and the Investor pursuant to the
terms and conditions set forth in this Section 3 (the "Repurchase Option").
(b) The purchase price for each Unvested Share will be the lesser
of Executive's Original Cost or the Fair Market Value for such share, and the
purchase price for each Vested Share will be the Fair Market Value for such
share.
(c) The Board may elect to purchase all or any portion of the
Unvested Shares and the Vested Shares by delivering written notice (the
"Repurchase Notice") to the holder or holders of the Executive Stock within
100 days after the Termination. The Repurchase Notice will set forth the
number of Unvested Shares and Vested Shares 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 Executive Stock held by Executive at the time of delivery of the
Repurchase Notice. If the number of shares of Executive Stock then held by
Executive is less than the total number of shares of Executive 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 Executive Stock
under this Agreement, pro rata according to the number of shares of Executive
Stock held by such other holder(s) at the time of delivery of such Repurchase
Notice (determined as nearly as practicable to the nearest share). The
number of Unvested Shares and Vested Shares to be repurchased hereunder will
be allocated among Executive and the other holders of Executive Stock (if
any) pro rata according to the number of shares of Executive Stock to be
purchased from such person.
(d) If for any reason the Company does not elect to purchase all
of the Executive Stock pursuant to the Repurchase Option, the Investor shall
be entitled to exercise the Repurchase Option for the shares of Executive
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
Executive 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
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Supplemental Repurchase Notice to the holder(s) of Executive 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. The number
of Unvested Shares and Vested Shares to be repurchased hereunder shall be
allocated among the Company and the Investor pro rata according to the number
of shares of Executive Stock to be purchased by each of them.
(e) The closing of the purchase of the Executive 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 Executive 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) 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 set forth above, in
the event the Company terminates Executive (other than for Cause or as a
result of Executive's death or disability) prior to the fifth anniversary of
the date of Closing and the Additional Benefits Requirements are satisfied,
then (i) Executive will be entitled to retain all Performance Vesting Shares
which are Unvested Shares until it is finally determined whether they will
vest under the EBITDA and EBITDA Percentage tests described in Section 2(b)
above (at which time, as such determinations are made, the Company and the
Investor will be entitled to exercise the Repurchase Option in respect of
such Shares of Executive Stock) and (ii) subject to Section 3(h) below,
Executive shall be entitled to require the Company to purchase all Vested
Shares as soon as practicable after such termination by delivery of written
notice to the Company within 30 days following such termination and all
Performance Vesting Shares which had not vested as of the date of such
termination as soon as practicable after the date on which all such
Performance Vesting Shares become Vested Shares by delivery of written notice
to the Company within 30 days following such vesting. The Company will pay
for the Executive Stock to be purchased pursuant to the Section 3(f) by
delivery of a check, a wire transfer of funds and/or a note (payable in three
equal annual installments without interest commencing on the first anniversary
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of the date of purchase by the Company) in form and substance determined by
the Board in good faith. In addition, the Company, at its election, may pay
the purchase price of any 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.
(g) The right of the Company and the Investor, and the requirement
for the Company, to repurchase Vested Shares pursuant to this Section 3 shall
terminate upon the first to occur of a Sale of the Company or a Qualified
Public Offering.
(h) Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Executive 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 Executive
Stock hereunder which the Company is otherwise entitled (or required) to
make, the Company may (or shall) make such repurchases as soon as it is
permitted to do so under such restrictions.
(i) All shares of Executive Stock purchased by the Company
pursuant to this Section 3 and pursuant to Section 4 shall remain available
for reissuance to new executives as determined by the Board.
4. RESTRICTIONS ON TRANSFER.
(a) TRANSFER OF EXECUTIVE STOCK. Prior to the earlier to occur of
(x) the fifth anniversary of the date of the Closing or (y) 100 days
following the Termination, Executive shall not 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
shares of Executive Stock (a "Transfer"), except pursuant to (i) the
provisions of Section 3 hereof, a Public Sale or a Sale of the Company
("Exempt Transfers") or (ii) the approval of the Company and the Investor and
pursuant to the provisions of this Section 4; provided that in no event shall
any Transfer of Executive Stock pursuant to this Section 4 be made for any
consideration other than cash payable upon consummation of such Transfer or
in installments over time. Prior to making any Transfer other than an Exempt
Transfer (whether such Transfer occurs prior to or following the dates set
forth in clauses (x) and (y) above), Executive will give written notice (the
"Sale Notice") to the Company and the Investor. The Sale Notice will disclose
in reasonable detail the identity of the prospective transferee(s), the
number of shares to be transferred and the terms and conditions of the
proposed transfer. Executive will not consummate any Transfer until 90 days
after the Sale Notice has been given to the Company and to the Investor,
unless the parties
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to the Transfer have been finally determined pursuant to this Section 4 prior
to the expiration of such 90-day period. The date of the first to occur of
such events is referred to herein as the "Authorization Date".
Notwithstanding the foregoing, in no event shall Executive be entitled to
Transfer (A) any Unvested Shares of Executive Stock, other than to the
Company or the Investor pursuant to Section 3 until, in the case of Time
Vesting Shares which are Unvested Shares, 100 days following such
Termination, and in the case of Performance Vesting Shares which are Unvested
Shares, the later of 100 days following such Termination or, if the
Additional Benefits Requirements are satisfied, 100 days following the date
upon which it is finally determined whether such shares shall become Vested
Shares or (B) any Shares of Executive Stock which the Company and/or the
Investor have elected to purchase pursuant to Section 3, except to the
Company or the Investor, as applicable.
(b) FIRST REFUSAL RIGHTS. The Company may elect to purchase all
(but not less than all) of the shares of Executive Stock to be transferred
upon the same terms and conditions as those set forth in the Sale Notice by
delivering a written notice of such election to Executive and the Investor
within 60 days after the Sale Notice has been given to the Company. If the
Company has not elected to purchase all of the Executive Stock to be
transferred, the Investor may elect to purchase all (but not less than all)
of the Executive Stock to be transferred upon the same terms and conditions
as those set forth in the Sale Notice by giving written notice of such
election to Executive within 90 days after the Sale Notice has been given to
the Investor. If neither the Company nor the Investor elects to purchase all
of the shares of Executive Stock specified in the Sale Notice, Executive may
transfer the shares of Executive Stock specified in the Sale Notice, subject
to the provisions of Section 4(d) below, at a price and on terms no more
favorable to the transferee(s) thereof than specified in the Sale Notice
during the 60-day period immediately following the Authorization Date. Any
shares of Executive Stock not transferred within such 60-day period will be
subject to the provisions of this Section 4(b) upon subsequent transfer. The
Company may pay the purchase price for such shares by offsetting amounts
outstanding under the Executive Note or any other debts owed by Executive to
the Company.
(c) CERTAIN PERMITTED TRANSFERS. The restrictions contained in
this Section 4 will not apply with respect to (i) transfers of shares of
Executive Stock pursuant to applicable laws of descent and distribution or
(ii) transfers of shares of Executive Stock among Executive's Family Group,
other than transfers of the type described in the last sentence of Section
4(a) above; provided that such restrictions will continue to be applicable to
the Executive Stock after any such transfer and the transferees of such
Executive Stock will have agreed in writing to be bound by the provisions of
this Agreement.
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(d) TERMINATION OF RESTRICTIONS. The restrictions on the Transfer
of shares of Executive Stock set forth in this Section 4 will continue with
respect to each share of Executive Stock until the date on which such
Executive Stock has been transferred in a transaction permitted by this
Section 4 (except in a transaction contemplated by Section 4(c)); provided
that in any event such restrictions will terminate on the first to occur of a
Sale of the Company or a Qualified Public Offering; and further provided that
the restrictions contained in clause (A) of the last sentence of Section 4(a)
above shall survive in perpetuity.
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 ________ __, 1993, 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 ________ __,
1993. 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. LIMITED PREEMPTIVE RIGHTS.
(i) Except for the issuance of Common Stock (a) pursuant to
the Equity Purchase Agreement, (b) pursuant to a public offering registered
under the Securities Act, (c) to a Lender to the Company in connection with a
debt facility, (d) in accordance with Section 5 of the Stockholders
Agreement, (e) to new members of management of the Company and its
Subsidiaries in accordance with Section 6 of the Stockholders Agreement or
(f) to employees of the
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Company and/or its Subsidiaries pursuant to any plan approved by the Board,
if the Company at any time after the Closing authorizes the issuance or sale
of any shares of Common Stock or any securities containing options or rights
to acquire any shares of Common Stock (other than as a dividend on the
outstanding Common Stock), the Company shall first offer to sell to each
holder of Executive Stock a portion of such stock or securities equal to the
quotient determined by dividing (1) the number of shares of Executive Stock
held by such holder by (2) the total number of shares of Common Stock
outstanding on a fully diluted basis immediately prior to such issuance. Each
holder of Executive Stock shall be entitled to purchase such stock or
securities at the most favorable price and on the most favorable terms as
such stock or securities are to be offered to any other Persons.
(ii) In order to exercise its purchase rights hereunder, a
holder of Executive Stock must, within 30 days after receipt of written
notice from the Company describing in reasonable detail the stock or
securities being offered, the purchase price thereof, the payment terms and
such holder's percentage allotment, deliver a written notice to the Company
describing its election hereunder. If all of the stock and securities offered
to the holders of Executive Stock is not fully subscribed by such holders,
the remaining stock and securities shall be reoffered by the Company to the
holders purchasing their full allotment upon the terms set forth in this
Section, except that such holders must exercise their purchase rights within
five days after receipt of such reoffer.
(iii) Upon the expiration of the offering periods described
above, the Company shall be entitled to sell such stock or securities which
the holders of Executive Stock have not elected to purchase during the 90
days following such expiration on terms and conditions no more favorable to
the purchasers thereof than those offered to such holders. Any stock or
securities offered or sold by the Company after such 90-day period must be
reoffered to the holders of Executive Stock pursuant to the terms of this
Section.
(iv) Nothing contained in this Section 6 shall be deemed to
amend, modify or limit in any way the restrictions on the issuance of shares
of Stock set forth in Section 3C of the Equity Purchase Agreement or in any
other agreement to which the Company is presently bound.
In the event that, in connection with its purchase of shares
of Common Stock or securities containing options or rights to acquire shares
of Common Stock ("Common Convertible Securities") as described in this
Section 6, the other purchasers are also purchasing other securities of the
Company or any Subsidiary (collectively, the "Other Securities"), then the
Executive shall
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purchase a ratio of Other Securities to the number of Shares of Common Stock
or Common Convertible Securities in the same proportion as the other
purchasers purchase in each of such securities.
7. CO-SALE RIGHTS. In the event of a Change of Control effected by
a transfer of shares of the Investor that includes the transfer of shares of
Class B Common, at least 30 days prior to any such transfer (other than a
Public Sale), the Investor shall deliver a written notice (the "Sale Notice")
to the Company and the Executive, specifying in reasonable detail the
identity of the prospective transferee(s) and the terms and conditions of the
transfer. The Executive may elect to participate in the contemplated transfer
of Class B Common by delivering written notice to the Investor within 30 days
after delivery of the Sale Notice. If the Executive has elected to
participate in such transfer, the Investor and the Executive shall be
entitled to sell in the contemplated transfer, at the same price and on the
same terms, a number of shares of Class B Common equal to the product of (i)
the quotient determined by dividing the percentage of shares of Class B
Common owned by such person by the aggregate percentage of shares of Class B
Common owned by the Investor and the Executive and (ii) the number of shares
of Class B Common to be sold in the contemplated transfer.
FOR EXAMPLE, if the Sale Notice contemplated a sale of 100 shares of
Class B Common by the Investor, and if the Investor at such time owns
90% of all shares of Class B Common and if the Executive elects to
participate and owns 10% of all shares of Class B Common, the Investor
would be entitled to sell 90 shares (90% + 100% X 100 shares) and the
Executive would be entitled to sell 10 shares (10% + 100% X 100 shares).
The Investor shall use reasonable efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Executive in any
contemplated transfer, and the Investor shall not transfer any of its shares
of Class B Common (if such transfer would result in a Change of Control) if
the prospective transferee(s) decline(s) to allow the participation of the
Executive.
8. PIGGYBACK REGISTRATIONS.
(a) Whenever the Company proposes to register any of its
securities under the Securities Act and the registration form to be used may
be used for the registration of Executive Stock (a "Piggyback Registration"),
the Company will give prompt written notice to all holders of Executive Stock
of its intention to effect such a registration and will include in such
registration all Fully Vested Shares with respect to which the Company has
received
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written requests for inclusion therein within 15 days after the receipt of
the Company's notice.
(b) The Registration Expenses of the holders of Executive Stock
will be paid by the Company in all Piggyback Registrations.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise
the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering, the Company will include in such registration (i)
first, the securities the Company proposes to sell, (ii) second, other
securities requested to be included in such registration which are not
Executive Stock, and (iii) third, Fully Vested Shares, pro rata based upon
the number of Fully Vested Shares held by each holder thereof.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds
the number which can be sold in such offering, the Company will include in
such registration (i) first, the securities requested to be included therein
by the holders requesting such registration, (ii) second, other securities
requested to be included in such registration which are not Executive Stock,
and (iii) third, Fully Vested Shares, pro rata based upon the number of Fully
Vested Shares held by each holder thereof.
(e) If any Piggyback Registration is an underwritten offering,
the underwriter's commissions and discounts shall be paid out of the proceeds
from the sale of such securities, and shall not be paid by the Company with
respect to the sale of such securities.
(f) Each holder of Executive Stock agrees not to effect any
public sale and/or distribution of any equity security of the company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 90 days after the
effectiveness of any underwritten Piggyback Registration, except as part of
such underwritten registration, unless otherwise authorized by the Company.
PROVISIONS RELATING TO EMPLOYMENT
9. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning as of the date of the
Closing and ending upon termination pursuant to
-14-
Section 11 hereof (the "Employment Period"). During the Employment Period,
Executive shall serve as the President and Chief Executive Officer of the
Company and shall have the normal duties, responsibilities and authority of
the President and Chief Executive Officer, including, without limitation,
responsibility for all aspects of the daily operations of the Company and the
identification, negotiation and integration of acquisitions, subject to the
power of the Board to supervise, and to override actions of, the President
and Chief Executive Officer.
10. SALARY, BONUS AND BENEFITS. (a) During the Employment Period,
the Company will pay Executive a base salary (the "Annual Base Salary") as
the Board may designate from time to time, at the rate of not less than
$241,500 per annum, subject to increases, but not decreases, as determined by
the Board 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 30% 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.
(b) On the date of the Closing, the Company shall pay Executive
an amount equal to the product obtained by multiplying (i) a fraction, the
numerator of which is the number of days from September 1, 1993 to the date
of Closing and the denominator of which is 365, times (ii) $120,750, provided
that such amount shall not exceed $60,375.
11. TERMINATION.
(a) The Employment Period will continue until Executive's
resignation, disability (as reasonably determined by the Board) or death or
until the Board determines in its good faith judgment that termination of
Executive's employment is in the best interests of the Company.
(b) Subject to Section 11(c) below, if Executive's employment
with the Company is terminated by the Company without Cause, Executive shall
be entitled to receive (i) if the Termination occurs prior to the second
anniversary of the Closing, payments at the same rate as the Annual Base
Salary for 18 months (or, at the Company's option, for a greater period of up
to two years) following the date of Termination, payable in monthly
installments, or (ii) if the Termination occurs after the second anniversary
of the date of the Closing, payments at the rate of the Annual Base Salary
for six months (or, at the Company's option, for a greater period of up to
two years) following the date of Termination, payable in monthly
installments. Amounts payable by the Company to Executive pursuant to this
Section 11(b) shall be
-15-
reduced by the amount of any payments received by Executive from other
employment during the period in which payments are being made pursuant to
this Section 11(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 11(b) at any time after
which Executive breaches any of the provisions of Section 12 or 13; provided
that no such cessation shall relieve Executive of his obligations under
Section 12 or 13.
(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 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) substantial and
repeated failure to perform duties commensurate with his position as
reasonably directed in writing by the Board 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.
12. 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.
-16-
13. 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, 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 or has elected (without giving
effect to the last two sentences of Section 11(b)) to make payments to
Executive pursuant to Section 11(b) (the "Noncompete Period"), he shall not
directly or indirectly own, manage, control, participate in, 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 relation 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
relation and the Company or any Subsidiary.
(c) ENFORCEMENT. If, at the time of enforcement of Section 12 or
13 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
- 17 -
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).
(d) The parties hereto contemplate the acquisition of an ongoing
business or businesses. Executive agrees to enter into a noncompetition and
nonsolicitation agreement substantially in the form of this Section 13 upon
the consummation of any such acquisition.
14. 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 third parties alleging misappropriation, infringement or improper
disclosure of 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.
- 18 -
His disclousure 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.
15. 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
16. 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 11 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 net after tax benefit if such reduction were not
made. For purposes of this Section 16, "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
- 19 -
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.
17. DEFINITIONS.
"CHANGE OF CONTROL" means any sale, exchange, transfer or
issuance, or series of related sales, exchanges, transfers or issuances of
Stockholder Shares in a recapitalization or otherwise which results
in any person or group of related persons who are not Stockholders owning
shares entitling them to a majority of the ordinary voting power to elect
directors of the Company.
"COMMON STOCK" means the Class A Common and Class B Common.
"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
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
- 20 -
holder of Executive Stock will succeed to all rights and obligations
attributable to Executive as a holder of Executive Stock hereunder.
"FAIR MARKET VALUE" of each share of Executive Stock means the
average of the closing prices of the sales of the Company's Common Stock on
all securities exchanges on which the Common Stock may at the time be listed,
or, if there have been no sales on any such exchange on any day, the average
of the highest bid and lowest asked prices on all such exchanges at the end
of such day, or, if on any day the Common Stock is not so listed, the average
of the representative bid and asked prices quoted in the NASDAQ System as of
4:00 P.M., New York time, or, if on any day the Common Stock is not quoted in
the NASDAQ System, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of which
the Fair Market Value is being determined and the 20 consecutive business
days prior to such day. If at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the Fair Market Value will be the fair value of the Common Stock
determined in good faith by the Board. If the Executive does not agree with
the fair market value determined by the Board, then Executive may request
that such value be determined by an independent investment banking firm of
national or regional reputation utilizing valuation techniques then commonly
used for the valuation of such investment interests, which investment banking
firm will be jointly selected by the Board and Executive in good faith, and
expenses of which will be borne equally by the Company and Executive. If the
Board and Executive cannot agree on an investment banking firm, the Board
shall select one investment banking firm and Executive shall select a second
investment banking firm, which firms shall jointly select a third investment
banking firm (the "Third Firm"). The Third Firm shall then determine the Fair
Market Value in accordance with the specifications set forth within this
definition.
"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 any Person is liable,
contingently or otherwise, 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, (ii)
indebtedness guaranteed in any manner by any Person, including guarantees in
the form of an agreement to repurchase or
- 21 -
reimburse, (iii) obligations under capitalized leases in respect of which
obligations any Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations any Person assures
a creditor against loss and (iv) any unsatisfied obligation of any Person for
"withdrawal liability" to a "multiemployer plan" as such terms are defined
under ERISA.
"ORIGINAL COST" of each share of Class B Common purchased hereunder
will be equal to the price paid therefor as determined pursuant to Section
1(a) above (as proportionately adjusted for all subsequent stock splits,
stock dividends and other recapitalizations).
"PROJECTED EBITDA" for any fiscal period of the Company shall mean
the EBITDA of the Company for such fiscal period set forth on Appendix 2
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 2 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.
"REGISTRATION EXPENSES" means all expenses incident to the
Company's performance of a Piggyback Registration pursuant to Section 8,
including registration and filing fees, fees and expenses of compliance with
securities of blue sky laws, printing expenses, and fees and disbursements
for Counsel for the Company (but not for Counsel for the Executive) and all
independent public accountants, underwriters and other persons retained by
the Company.
"SALE OF THE COMPANY" means any transaction or series of related
transaction 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.
- 22 -
"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.
18. 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 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
c/o Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: CEO
WITH A COPY TO:
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
AND
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
IF TO THE EXECUTIVE:
Xxxxxxx X. Xxxxxxxx
c/o Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
IF TO THE INVESTOR:
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P.
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxx
- 23 -
WITH A COPY TO:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, 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 deemed to have been given when
so delivered or sent or, if mailed, five days after deposit in the U.S. mail.
19. 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
- 24 -
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) REMEDIES. Each of the parties to this Agreement (including
the Investor) will be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including attorneys' fees) caused
by any breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions
of this Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
deposit) for specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
(h) AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company,
Executive and the Investor.
(i) BUSINESS DAYS. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in
the state in which the Company's chief executive office is located, the time
period shall be automatically extended to the business day immediately
following such Saturday, Sunday or holiday.
-25-
(j) TERMINATION. This Agreement (except for the provisions of
Sections 9 and 10) shall survive the termination of Executive's employment
with the Company and shall remain in full force and effect after such
termination.
(k) NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement.
* * * * *
[Signature Page Follows]
-26-
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 C.E.O.
------------------------------------
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxx
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/ Xxxxx X. Xxxxxxx
-----------------------------------------
Its /s/ Principal
-----------------------------------------
APPENDIX 1
EXAMPLE OF ADDITIONAL BENEFITS REQUIREMENTS
Assume that Executive was terminated without Cause, death or
disability on the 100th day of a fiscal year and (i) actual EBITDA for the
immediately preceding 12 months was $8 million, (ii) Projected EBITDA for the
then current fiscal year was $10 million, (iii) Projected EBITDA for the
immediately preceding fiscal year was $9 million, (iv) the actual EBITDA
Percentage for the immediately preceding 12 months was 17%, (v) the Projected
EBITDA Percentage for the then current fiscal year was 20% and (vi) the
Projected EBITDA Percentage for the immediately preceding fiscal year was
18%. Since 100 days had elapsed in the current fiscal year, the 12 month
period would include three months in the current fiscal year and nine months
in the immediately preceding fiscal year. In that event (a) applicable
Projected EBITDA would equal $9.25 million [i.e., (3 + 12 x $10 million) +
(9 + 12 x $9 million)] and (b) the applicable Projected EBITDA Percentage
would equal 18.5% [i.e., (3 + 12 x 20) + (9 + 12 x 18)]. The Performance
Vesting Shares would continue to vest, since (x) actual EBITDA was greater
than 85% of applicable Projected EBITDA [i.e., $9.25 million x 85% = $7.86
million, which is less than actual EBITDA of $8 million] and (y) the actual
EBITDA Percentage was greater than 85% of the applicable Projected EBITDA
Percentage [18.5 x 85% = 15.725%, which is less than the actual EBITDA
Percentage of 17%].
APPENDIX 2
YEAR PROJECTED EBITDA PROJECTED EBITDA PERCENTAGE
----- ---------------- ---------------------------
1994 $ 2,266,000 7.87%
1995 $ 5,368,000 12.75%
1996 $ 9,337,000 16.95%
1997 $13,976,000 20.68%
1998 $19,387,000 24.43%
