EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
made by and between SUNLINK HEALTH SYSTEMS, INC., an Ohio corporation ("SunLink"
or the "Company"), SunLink's wholly owned subsidiary SUNLINK HEALTHCARE CORP., a
Delaware corporation ("SHC") and XXXXXX X. XXXXXXXX, XX., an individual resident
of Georgia (the "Executive"), as of the 1st day of January, 2002 (the "Effective
Date").
SunLink desires to continue to employ the Executive as its Chairman,
Chief Executive Officer, and President and SunLink desires that Executive also
serve as the Chairman and Chief Executive Officer of SHC. The Executive is
willing to serve SunLink and SHC on the terms and conditions herein provided.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby amend and restate the Employment Agreement dated as of January 1,
2001 among Executive, SunLink and SHC (the "2001 Agreement") and agree that as
of the Effective Date:
1. Employment. SunLink and SHC shall continue to employ the
Executive, and the Executive shall continue to serve as Chairman, Chief
Executive Officer, and President of SunLink and Chairman and Chief Executive
Officer of SHC, upon the terms and conditions set forth herein. Executive's
principal office shall be located in the Atlanta, Georgia metropolitan area. The
Executive shall have such authority and responsibilities consistent with his
position and which may be set forth in the bylaws of SunLink or SHC, as the case
may be, or assigned by their respective Boards of Directors from time to time.
Executive shall also be nominated by SunLink for election as a member of the
Board of Directors of SunLink and SunLink shall vote its SHC shares for election
of Executive as a member of the Board of Directors of SHC. The Executive shall
devote his full business time, attention, skill and efforts to the performance
of his duties hereunder, except during periods of illness or periods of vacation
and leaves of absence consistent with SunLink company policy. The Executive may
devote reasonable periods of time to serve as a director or advisor to other
organizations, to perform charitable and other community activities, and to
manage his personal investments; provided, however, that such activities do not
materially interfere with the performance of his duties hereunder and are not in
conflict or competitive with, or adverse to, the interests of SunLink or SHC.
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall be for a term (the "Fixed
Term") of three (3) years ending December 31, 2004. Unless at least 180 days
written notice of non-renewal shall have been given to Executive by the Company
or to the Company by Executive prior to the end of the Fixed Term or any
Extended Term that Executive's employment will not be continued beyond such
Fixed Term or any Extended Term, as the case may be, the term of this Agreement
shall be deemed automatically renewed for an additional period of eighteen
months (an "Extended Term") commencing upon the end of the Fixed Term or then
applicable Extended Term, as the case may be, and shall continue in
force during each such Extended Term or until such time as either party shall
give ninety (90) days written notice to the other party terminating this
Agreement pursuant to Section 5 below.
3. Compensation and Benefits.
a. SunLink shall pay the Executive a salary at a rate of
not less than (i) $265,000 per annum, effective January 1, 2002 through August
31, 2002 and (ii) $270,000 per annum effective September 1, 2002 and thereafter,
in each case in accordance with the salary payment practices of the Company.
SunLink's Board of Directors shall review the Executive's salary at least
annually and may increase the Executive's base salary if it determines in its
sole discretion that an increase is appropriate.
b. The Executive shall participate in a management
incentive program and shall be eligible to receive bonus payments of up to sixty
percent (60%) of Executive's annual base salary based upon criteria that the
Executive Compensation Committee of the Board of Directors of SunLink in
consultation with Executive shall establish from time to time pursuant to that
program.
c. The compensation payable by SunLink to Executive
hereunder shall be inclusive of compensation for all services rendered by
Executive to SunLink, SHC and their respective Subsidiaries and Executive shall
have no separate right of compensation from SHC or any such Subsidiary other
than the right to be indemnified as an officer of SHC or such Subsidiary under
the corporate bylaws thereof and/or insured under any directors and officers
liability insurance policies maintained by SunLink, SHC or such Subsidiary.
4. Stock Options and Other Benefits.
a. SunLink has granted or shall grant to Executive,
five-year options to purchase a total of 200,000 shares of the common stock of
SunLink. Such grant was or shall be effective as of the date of grant as
determined by the Board. The options were or shall be granted pursuant and
subject to the stock option plan approved by SunLink's shareholders at their
2001 annual meeting at an exercise price per share equal to the closing sale
price of SunLink's common stock on the American Stock Exchange as of the date of
grant. The options so granted shall vest 20% as of the date of grant and an
additional 20% annually at the first, second, third and fourth anniversaries of
the date of grant.
b. In addition to participating in the option plan
pursuant to Section 4(a) and SunLink's preexisting option plan, Executive shall
during the term of Executive's employment be eligible to participate in any
additional stock option plan or arrangement adopted by SunLink which includes
senior SunLink officers and to receive additional grants of options under such
plans in such numbers and at such exercise prices as the Board shall determine
in its discretion.
c. The Executive shall participate in all retirement,
welfare, deferred compensation, life and health insurance, and other benefit
plans or programs (exclusive of those referenced in Sections 4(d), 4(f), 4(g),
4(h) and 4(i) of the 2001 Agreement) of SunLink now or hereafter applicable to
the Executive or applicable to a class of employees that includes senior
executives of SunLink; provided, however, that during any period during the
Fixed Term or any
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Extended Term that the Executive is subject to a Disability, and during the
180-day period of physical or mental infirmity leading up to the Executive's
Disability, the amount of the Executive's compensation provided under this
Section 4 shall be reduced by the sum of the amounts, if any, paid to the
Executive for the same period under any disability benefit or pension plan of
SunLink.
d. SunLink shall provide supplemental term life
insurance coverage equal to $300,000.
e. The Executive shall receive twenty-five (25) days
paid vacation each year. Unused vacation may not be carried over to subsequent
years.
5. Termination.
a. The Executive's employment under this Agreement and
his offices and positions with SunLink may be terminated prior to the end of the
Fixed Term or any Extended Term only as follows:
(i) automatically upon the death of the
Executive;
(ii) by SunLink due to the Disability of the
Executive upon ninety (90) days written notice and delivery of
a Notice of Termination to the Executive;
(iii) by SunLink for Cause upon delivery of a
Notice of Termination to the Executive;
(iv) by either party for any reason upon 90 days
notice to the other party.
Any termination of Executive's employment by SunLink shall also constitute the
concurrent termination of such Executive's employment and offices with SHC and
any other Subsidiary of SunLink.
b. If the Executive's employment with SunLink shall be
terminated during the Fixed Term or any Extended Term (i) by reason of the
Executive's death, or (ii) by SunLink for Disability or Cause, SunLink shall pay
to the Executive (or in the case of his death, the Executive's estate) within
fifteen days after the Termination Date a lump sum cash payment equal to the
Accrued Compensation.
c. If the Executive's employment with SunLink shall be
terminated by the Company other than for (i) Disability, (ii) Cause or (iii)
pursuant to Section 5(d) below, Executive shall
(A) in the case of any such termination by the
Company during the Fixed Term, receive severance payments equal to the
lesser of (x) eighteen (18) months salary or (y) the greater of the
salary for the remaining number of months in the Fixed Term or twelve
months, or
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(B) in the case of any such termination by the
Company during any Extended Term, receive severance payments equal to
the lesser of (x) twelve (12) months salary or (y) the salary for the
remaining number of months in the Extended Term,
(minus, in each such case, applicable withholdings), paid in accordance with the
normal payroll schedule of the Company, a pro rata portion of any annual bonus
for which goals have been proportionately met, and continuation of the benefits
set forth in Sections 4(c), 4(d) and 4(e) for ninety (90) days following
termination. If any such payment is not delivered, mailed by first class mail or
sent by commercial courier service to Executive at the most recent address
provided by Executive within fifteen (15) business days after being due, the
entire balance shall, at the option of the Executive, immediately be due and
payable.
d. If the Executive's employment is terminated by
Executive or by SunLink for any reason other than for Cause (exclusive of Cause
referred to in clause (iii) of Section 22(d)) within one (1) year after a Change
in Control, Executive shall, in lieu of any payment under Sections 5(b) or 5(c),
(i) receive severance payments equal to twenty-four (24) months base salary
(minus applicable withholdings), paid in accordance with the normal payroll
schedule of the company, (ii) receive Accrued Compensation, including without
limitation, a pro rata portion of any annual bonus for which goals have been
proportionately met, (iii) receive the balance of any other benefits set forth
in sections 4(c), 4(d) and 4(e) for twelve (12) months following termination,
and (iv) Executive's unvested stock options shall vest, and shall be exercisable
pursuant to the terms of the applicable stock option plan and agreement. If any
such payment is not delivered, mailed by first class mail or sent by commercial
courier service to Executive at the most recent address provided by Executive
within fifteen (15) business days after being due, the entire balance shall, at
the option of Executive, immediately be due and payable.
e. The severance pay and benefits provided for in this
Section 5 shall be in lieu of any other severance or termination pay to which
the Executive may otherwise be entitled under any Company severance or
termination plan, program, practice or arrangement, but shall not be in lieu of
any additional benefits to which Executive may be entitled under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). The Executive's
entitlement to any other compensation or benefits shall be determined in
accordance with SunLink's employee benefit plans and other applicable programs,
policies and practices then in effect.
f. Clause (ii) of Section 5(a) shall not be effective or
invoked by SunLink upon any Change in Control or within one (1) year thereafter.
g. Any notice by the Company to Executive or by
Executive to the Company of non-renewal given as contemplated by Section 2 shall
not be deemed to be a termination of Executive's employment for the purposes of
Section 5(b) or (c).
6. Indemnification. SunLink and SHC agree to indemnify, save and
hold Executive harmless from all losses, expenses, damages, liabilities,
obligations, claims and costs of any kind (including reasonable attorneys' fees
and other legal costs and expenses) that Executive
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may at any time suffer or incur by reason of any claims, actions or suits
brought or threatened to be brought against Executive by any person or entity,
as a result of or in connection with Executive's service as an officer, employee
or director of SunLink or SHC or as an employee, officer or director of any of
their Subsidiaries, or any entity that in the future becomes a Subsidiary or
affiliate of SunLink or SHC, except that no indemnification shall be made if it
is proved by clear and convincing evidence in a court of competent jurisdiction
that Executive's action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to SunLink or SHC or was undertaken with
reckless disregard for the best interest of SunLink or SHC. The provisions of
this Section 6 shall survive termination of this Agreement.
7. Trade Secrets. The Executive shall not, at any time, either
during the term of his employment or after the Termination Date, use or disclose
any Trade Secrets of SunLink or SHC, as defined herein, except in fulfillment of
his duties as the Executive during his employment, for so long as the pertinent
information or data remain Trade Secrets, whether or not the Trade Secrets are
in written or tangible form.
8. Protection of Other Confidential Information. Executive
recognizes the interest of SunLink and SHC in maintaining the confidential
nature of its proprietary and other business and commercial information. In
connection therewith, Executive covenants that during the term of Executive's
employment under this Agreement, and for a period of eighteen (18) months
thereafter, Executive will not, directly or indirectly, except as necessary to
perform Executive's duties for SunLink or SHC, publish, disclose or use any
Confidential Information of SunLink or SHC. "Confidential Information" shall
mean any internal, non-public information (other than Trade Secrets already
addressed above) concerning SunLink's or SHC's financial position and results of
operations (including revenues, assets, net income, etc.); pricing structure;
annual and long-range business plans; product or service plans; marketing plans
and methods; training, educational and administrative manuals; customer and
supplier information and purchase histories; and employee lists. The provisions
of Sections 7 and 8 shall be sufficient to protect Trade Secrets and
Confidential Information of third parties provided to SunLink or SHC under an
obligation of secrecy.
9. Return of Materials. Executive shall surrender to SunLink or
SHC, promptly upon request and in any event upon termination of Executive's
employment with SunLink or SHC, all media, documents, notebooks, computer
programs, handbooks, data files, models, samples, price lists, drawings,
customer lists, prospect data, or other material of any nature whatsoever (in
tangible or electronic form) in Executive's possession or control, including all
copies thereof, relating to SunLink and SHC, their business, or their customers.
Upon the request of SunLink or SHC, Executive shall certify in writing
compliance with the foregoing requirement.
10. Non-Solicitation of Customers. During the term of this
Agreement and for a period of eighteen (18) months after termination of
Executive's employment with SunLink or SHC for any reason, Executive shall not
directly or indirectly, through one or more intermediaries or otherwise, solicit
or attempt to solicit any Customers to induce or encourage them to acquire or
obtain from any individual or entity other than SunLink or SHC, any product or
service competitive with or substitute for any Company Product. For purposes of
this Section, a "Customer" refers to any person or group of persons with whom
Executive had direct material contact with regard to the
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selling, delivery or support of Company Products, including servicing such
person's or group's account, during the period of twelve (12) months preceding
termination of Executive's employment; and "Company Products" refers to the
products and services that SunLink or SHC offered or sold within six (6) months
of the date of termination of Executive's employment
11. Non-Solicitation of Executives. During the term of this
Agreement and for a period of eighteen (18) months after termination of
employment with SunLink or SHC for any reason, Executive shall not, alone or in
concert with others, solicit or induce any other SunLink or SHC employee to
leave the employ of SunLink or SHC or recruit or attempt to recruit such person
to accept employment with another business. Provided, however, that this
restriction shall only apply to employees with whom Executive had direct
material contact during the period of twelve (12) months preceding the
termination of Executive's employment.
12. No Denigration. Executive will not at any time denigrate,
ridicule or intentionally criticize the Company or any of its Subsidiaries or
affiliates or any of their respective services, products, properties, employees,
officers or directors, including without limitation, by way of news interviews,
or the expression of personal views, opinions or judgments to the news media.
13. Successors; Binding Agreement.
a. This Agreement shall be binding upon and shall inure
to the benefit of SunLink and SHC, their Successors and Assigns and SunLink and
SHC shall require any Successors and Assigns to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that SunLink or
SHC would be required to perform it if no such succession or assignment had
taken place.
b. Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
14. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other; provided, however, that all notices to SunLink or SHC shall be
directed to the attention of the Board with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof.
15. Modification and Waiver. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Executive and SunLink. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
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16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia
without giving effect to the conflict of laws principles thereof.
17. Arbitration. Any controversy or claim against either party
arising from, out of or relating to this Agreement, the breach thereof (other
than controversies or claims arising from, out of or relating to the provisions
in Sections 7, 8, 9, 10, 11 and 12 above, which may be litigated in a court of
competent jurisdiction), or the employment or termination thereof of Executive
by SunLink or SHC which would give rise to a claim under federal, state or local
law (including but not limited to claims based in tort or contract, claims for
discrimination under state or federal law, and/or claims for violation of any
federal, state or local law, statute or regulation) ("Claims") shall be
submitted to an impartial mediator ("Mediator") selected jointly by the parties.
Both parties shall attend a mediation conference and attempt to resolve any and
all Claims. If they are not able to resolve all Claims, any unresolved Claims,
including any dispute as to whether a matter constitutes a Claim which must be
submitted to arbitration, shall be determined by final and binding arbitration
in Atlanta, Georgia in accordance with the Model Employment Dispute Resolution
Rules ("Rules") of the American Arbitration Association, by an experienced
employment arbitrator licensed to practice law in the State of Georgia in
accordance with the Rules. The arbitrator shall be selected by alternate
striking from a list of six arbitrators, half of which shall be supplied by
SunLink or SHC and half by Executive. The party not initiating the arbitration
shall strike first. The process shall be repeated twice until an arbitrator is
selected. If an arbitrator is still not selected, the Mediator shall provide a
list of three names which will be alternately struck, with the party initiating
the arbitration striking first, until a selection is made.
A demand for arbitration shall be made within a reasonable time after
the Claim has arisen. In no event shall the demand for arbitration be made after
the date when institution of legal and/or equitable proceedings based on such
Claim would be barred by the applicable statute of limitations. Each party to
the arbitration will be entitled to be represented by counsel and will have the
opportunity to take one deposition of an opposing party or witness before the
arbitration hearing. By mutual agreement of the parties, additional depositions
may be taken. The arbitrator shall have the authority to hear and grant a motion
to dismiss and/or for summary judgment, applying the standards governing such
motions under the Federal Rules of Civil Procedure. Each party shall have the
right to subpoena witnesses and documents for the arbitration hearing. A court
reporter shall record all arbitration proceedings.
With respect to any Claim brought to arbitration hereunder, either
party may be entitled to recover whatever damages would otherwise be available
to that party in any legal proceeding based upon the federal and/or state law
applicable to the matter and as specified by Section 16. The decision of the
arbitrator may be entered and enforced in any court of competent jurisdiction by
either SunLink or SHC or Executive. Each party shall pay the fees of their
respective attorneys, the expenses of their witnesses and any other expenses
connected with presenting their Claim or defense (except as otherwise awarded by
the arbitrator). Except as otherwise awarded by the arbitrator, other costs of
the arbitration, including the fees of the Mediator, the arbitrator, the cost of
any record or transcript of the arbitration, administrative fees, and other fees
and costs, shall be borne by SunLink or SHC. Should Executive or SunLink or SHC
pursue any dispute or matter covered by this Section by any method other than
said arbitration, the responding party shall be entitled to recover from the
other party all damages, costs, expenses, and attorneys' fees incurred as
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a result of such action. The provisions contained in this Section 17 shall
survive the termination and/or expiration of this Agreement.
The parties indicate their acceptance of the foregoing arbitration
requirement by initialing below:
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxxxx /s/Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------- ------------------------- --------------------------
For SunLink For SHC Executive
18. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
19. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof. Except as modified herein, any
existing stock option agreement between Executive and SunLink shall remain in
full force and effect.
20. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
22. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
a. "Accrued Compensation" shall mean an amount which
shall include all amounts earned or accrued through the Termination Date but not
paid as of the Termination Date including (i) base salary, (ii) reimbursement
for reasonable and necessary expenses incurred by the Executive on behalf of
SunLink or SHC during the period ending on the Termination Date, and (iii)
bonuses and incentive compensation.
b. "Act" shall mean the Securities Act of 1933, as
amended.
c. "Base Amount" shall mean the greater of the
Executive's annual base salary (i) at the rate in effect on the Termination Date
or (ii) at the highest rate in effect at any time during the twelve (12) month
period prior to the Change in Control, and shall include all amounts of his base
salary that are deferred under the qualified and non-qualified employee benefit
plans of SunLink or any other agreement or arrangement.
d. The termination of the Executive's employment shall
be for "Cause" if it is a result of:
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(i) any act that (A) constitutes, on the part of
the Executive, fraud, dishonesty, malfeasance of duty, or conduct
inappropriate to the Executive's office, and (B) is demonstrably likely
to lead to material injury to SunLink or SHC or resulted or was
intended to result in direct or indirect gain to or personal enrichment
of the Executive; or
(ii) the conviction of the Executive of a felony;
or
(iii) Executive's failure to perform his job
duties to the satisfaction of the Board of Directors of SunLink, as
determined by a two thirds majority vote;
provided, however, that in the case of clause (i) above, such conduct shall not
constitute Cause:
(x) unless (A) there shall have been delivered to the
Executive a written notice setting forth with specificity the reasons
that the Board of Directors believes the Executive's conduct
constitutes the criteria set forth in clause (i), (B) the Executive
shall have been provided the opportunity to be heard in person by the
Board of Directors (with the assistance of the Executive's counsel if
the Executive so desires); or
(y) if such conduct (A) was believed by the Executive in
good faith to have been in or not opposed to the interests of the
SunLink and SHC, and (B) was not intended to and did not result in the
direct or indirect gain to or personal enrichment of the Executive.
Provided further, in order for SunLink to terminate Executive's employment
pursuant to clause (iii) above, SunLink must first give Executive written notice
of such Cause and ninety (90) days to cure such Cause.
e. "Change in Control" shall mean the occurrence during
the Fixed Term or any Extended Term of any of the following events:
(iv) An acquisition (other than directly from
SunLink or SHC) of any voting securities of that company (the "Voting
Securities") by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the
"1934 Act")) immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the 0000
Xxx) of 40% or more of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities which are
acquired in a "Non-Control Acquisition" (as hereinafter defined) shall
not constitute an acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (1) an employee
benefit plan (or a trust forming a part thereof) maintained by (x) the
Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned
directly or
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indirectly by the Company (a "Subsidiary"), (2) the company or any
Subsidiary, or (3) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined).
(v) The individuals who, as of the date of this
Agreement, are members of the Board of SunLink or SHC (the "Incumbent
Board") cease for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination for
election by that company's stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such
new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated
under the 0000 Xxx) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or
(vi) Approval by stockholders of SunLink or SHC
of:
(A) (1) A merger, consolidation or
reorganization involving the
Company, unless
(x) the stockholders of the Company,
immediately before such merger,
consolidation or reorganization,
own, directly or indirectly,
immediately following such merger,
consolidation or reorganization, at
least two-thirds of the combined
voting power of the outstanding
voting securities of the
corporation resulting from such
merger or consolidation or
reorganization (the "Surviving
Corporation") in substantially the
same proportion as their ownership
of the Voting Securities
immediately before such merger,
consolidation or reorganization,
and
(y) the individuals who were members of
the Incumbent Board immediately
prior to the execution of the
agreement providing for such
merger, consolidation or
reorganization constitute at least
two-thirds of the members of the
board of directors of the Surviving
Corporation;
(A transaction described in clauses (x) and
(y) shall herein be referred to as a
"Non-Control Transaction").
(vii) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is terminated
prior to a Change in Control and the
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Executive reasonably demonstrates that such termination (A) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates
a Change in Control (a "Third Party") or (B) otherwise occurred in
connection with, or in anticipation of, a Change in Control which
actually occurs, then for all purposes of this Agreement, the date of a
Change in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the Executive's
employment.
f. "Disability" shall mean, subject to applicable state
and federal laws, a physical or mental infirmity which impairs the
Executive's ability to substantially perform his duties with SunLink
for a period of four (4) consecutive months, as determined by an
independent physician selected with the approval of both SunLink and
the Executive.
g. "Notice of Termination" shall mean a written notice
of termination from SunLink or the Executive which specifies an
effective date of termination, indicates the specific termination
provision in this Agreement relied upon, and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated.
h. "Successors and Assigns" shall mean a corporation or
other entity acquiring all or substantially all the assets and business
of SunLink or SHC (including this Agreement), whether by operation of
law or otherwise.
i. "Termination Date" shall mean, in the case of the
Executive's death, his date of death, and in all other cases, the date
specified in the Notice of Termination.
j. "Trade Secrets" shall mean any information, including
but not limited to technical or non-technical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans,
information on customers, or a list of actual or potential customers or
suppliers, which: (i) derives economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from its
disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the 30th day of September, 2002 effective as of January 1, 2002.
SUNLINK HEALTH SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx
Secretary
SUNLINK HEALTHCARE CORP.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx
Secretary
XXXXXX X. XXXXXXXX, XX.
/s/ Xxxxxx X. Xxxxxxxx, Xx. L.S.
---------------------------------
Executive
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