Exhibit 10.7
Xxxx Xxxxxxx
October 14, 1999
Page 1
October 14, 1999
Xxxx Xxxxxxx
0000 X. Xxxxxx Xx.
Xxxxxxx, XX 00000
Dear Xxxx:
This letter confirms the agreement between us whereby Lifemark Corporation
("Lifemark") has agreed to employ you and you have agreed to serve as a Vice
President of Lifemark. In this capacity you will be a member of the Executive
Strategy Team and will serve in accordance with the bylaws of Lifemark.
We also agreed that, in addition to your regular bonus, you will be entitled to
receive on January 1 of each year during the term of your employment commencing
on January 1, 2000, an additional bonus equal to the amount of interest due on
any Company Loans (as defined below) (provided, however, that if you have
prepaid interest in the prior calendar year and the Company has not previously
paid you an additional bonus in the amount of your prepaid interest, the bonus
shall include the amount of such prepaid interest). For this purpose, "Company
Loans" shall mean and include loans by the Company to you to purchase stock of
the Company from the Company.
Concurrently with the execution of this letter, Lifemark has granted you ten
year stock options to purchase 100,000 shares of Lifemark common stock. Lifemark
has also agreed to permit you to exercise your 100,000 options at the time of
their vesting accepting as payment your secured nine-year promissory note in the
full amount of your exercise price. 60,000 of the options granted to you vest
immediately and 40,000 granted under the newly approved Executive Stock Option
and Ownership Plan will vest immediately upon approval of the Plan by the
Company's stockholders. You have agreed to exercise the options immediately upon
vesting.
The loans provided for in the preceding paragraph will become due and payable
(including accrued interest) 60: (i) 180 days following termination of
employment except that they will become immediately due and payable if you
breach your employment agreement by the Company without cause or because of
disability; (ii) 60 days following termination of employment by you; and (iii)
immediately if you breach the Standard Key Employee Non-Disclosure Agreement or
if you are terminated for just cause (as defined below) at any time.
Except as may be otherwise explicitly provided in another written agreement
between you and Lifemark, your employment shall be subject to termination by
either you or Lifemark at any time without notice, subject to the severance
rules of Lifemark as they exist at the time of termination.
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Notwithstanding the foregoing, in the event of a Change in Control (as defined
below) of Lifemark, Lifemark agrees that if within two years following the date
of the change in control either (a) your employment is terminated by Lifemark
without "just cause" (as defined below), or (b) without your consent Lifemark
materially changes your duties or responsibilities or the location of your
principal place of work and as a result of such change or changes you
voluntarily terminate your employment, then, in either such event, (i) all of
your outstanding options will vest and become exercisable on the date of
termination of your employment, and (ii) you will be subject to Change of
Control Severance as provided below.
For purposes of this letter, "Change in Control" shall mean the occurrence of
any of the following events:
(i) The acquisition, by new stockholders (being any person or group of persons
other than the current directors of the Company, Xxxxxx Xxxxxxx, their
respective families, estates, trusts and other affiliates) acting in concert, of
a beneficial ownership interest in the Company, resulting in the total
beneficial ownership of such persons or group of persons equaling or exceeding
50% of the outstanding common stock and warrants of the Company; provided,
however, that no such person or group of persons shall be deemed to beneficially
own (i) any common stock or warrants acquired directly from the Company or (ii)
any common stock or warrants held by the Company or any of its subsidiaries or
any employee benefit plan (or any related trust) of the Company or its
subsidiaries. The Change in Control shall be deemed to occur on the date the
beneficial ownership of the acquiring person or group of persons first equals or
exceeds 50% of the outstanding common stock and warrants of the Company.
(ii) A merger, consolidation or other reorganization having substantially the
same effect, or the sale of all or substantially all the consolidated assets of
the Company in each case, with respect to which the persons or group of persons
who were the respective beneficial owners of the outstanding common stock
immediately prior to such event do not, following such event, beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
voting stock of the corporation resulting from such event or the corporation
purchasing or receiving assets pursuant to such event.
If more than one of the foregoing events shall occur, each such event shall
constitute a separate Change in Control.
For purposes of this letter, Change of Control Severance shall be 12 months base
salary payable monthly subject to normal withholding plus a pro rated portion of
your targeted bonus regular bonus, and a pro rated portion of the additional
bonus provided for in the second paragraph of this letter, in each case pro
rated on the portion of the fiscal year prior to termination. The pro rated
regular bonus will be payable at the time other Executive bonuses are paid and
will be based on the entire year of Company performance. The pro rated
additional bonus will be paid within 30 days of termination. You will be
entitled to payment in full of any bonus for the last completed fiscal year
prior to termination which has not yet been paid as of the date of termination,
with such bonus to be paid at the time other Executive bonuses for such year are
paid.
Lifemark further confirms that it will abide by both the letter and the spirit
of the adjustment provisions contained in its Stock Option Plans and the Stock
Option Certificates which you hold, pursuant to which Lifemark has agreed to
adjust the outstanding options appropriately in the event of a sale or merger of
the corporation.
2
For purposes of this letter, termination by Lifemark "for just cause" shall mean
a termination on account of gross negligence, dishonesty, or any willful
material breach of an agreement with Lifemark, or violation of any reasonable
rule or regulation of Lifemark of which you have been advised in writing.
As a condition to your continued employment and the vesting of options referred
to herein, you have executed Lifemark's Standard Key Employee Nondisclosure
Agreement.
Please confirm your agreement with and acceptance of the provisions of this
letter by signing and returning the enclosed copy of this letter where
indicated.
Sincerely,
/s/ XXXXXX XXXXX
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President
ACCEPTED AND AGREED:
/s/ XXXX XXXXXXX
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