4. | COMPENSATION. |
a. | For all duties rendered by Executive, the Company shall pay Executive a minimum salary of $400,000 per year, payable in equal semi-monthly installments. In addition thereto, each year, beginning January 1, 2015, Executive's compensation will be reviewed by the Board of Directors of AMSURG, or the Compensation Committee thereof, or its/their designee, and after taking into consideration performance and any other factors deemed relevant, the Committee may increase Executive's salary. Executive will be eligible to receive an annual bonus on the terms and conditions approved by the Compensation Committee of AMSURG's Board of Directors. Executive shall also be eligible to receive equity incentive awards as approved from time to time by the Compensation Committee of AMSURG's Board of Directors. |
b. | All compensation payable hereunder shall be subject to withholding for federal income taxes, FICA and all other applicable federal, state and local withholding requirements. |
c. | The Company shall pay the reasonable expenses incurred by Executive in the performance of his duties under this Agreement (or shall reimburse Executive on account of such expenses paid directly by Executive) in accordance with the Company's policies and procedures. Any such reimbursement of expenses shall be made by the Company promptly upon or as soon as reasonably practicable following receipt of supporting documentation reasonably satisfactory to the Company (but in any event not later than the close of Executive's taxable year following the taxable year in which the expense is incurred by Executive); provided, however, that upon Executive's termination of employment with the Company, in no event shall any additional reimbursement be made prior to the Section 409A Payment Date (as such term is defined in Section 22) to the extent such payment delay is required under Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code"). In no event shall any reimbursement be made to Executive for such expenses after the later of (i) the first anniversary of the date of Executive's death or (ii) December 31 of the calendar year following the year of the Executive's termination of employment with the Company (other than by reason of Executive's death). |
d. | Executive shall be eligible to receive such equity incentive awards under AMSURG's equity incentive plans as may be approved from time to time by the Compensation |
a. | The Accrued Rights (as defined in Section 7(a) below); |
b. | If Executive's employment is terminated following the end of a fiscal year and prior to the payment date for the bonus described in Section 4(a). if any, that Executive would have been entitled to receive with respect to such completed fiscal year, based upon AMSURG's or the Company's actual results, as applicable, the Company shall pay to Executive, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program, the amount of such bonus described in Section 4(a). if any, that Executive would have been entitled to receive with respect to such completed fiscal year had Executive's employment not terminated prior to the payment date for such bonus; and a pro rata portion of the bonus described in Section 4(a). if any, that Executive would have been entitled to receive for the fiscal year in which the Disability Payment Date (as defined below) occurs, based upon AMSURG's or the Company's actual results, as applicable, for the year of termination and the percentage of the fiscal year that shall have |
c. | elapsed through the Disability Payment Date, payable to Executive pursuant to Section 4(a) had Executive's employment not terminated, which pro-rata bonus shall be paid at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program; and |
d. | Through insurance or on its own account coverage for Executive that will provide payment of Executive's full salary and benefits for twelve (12) months, with (i) the payment of Executive's salary to commence within thirty (30) days (with the date of such initial payment(s) determined by the Company in its sole discretion) of the Disability Payment Date (as defined below) and (ii) such payments being paid on the same terms and with the same frequency as Executive's salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the Company shall provide such coverage to Executive as is then available to Executive in accordance with Company policy. To the extent that payments are received from Worker's Compensation or other Company paid disability plans, the Company's obligations will be reduced by amounts so received. |
7. | TERMINATION FOR CAUSE. |
a. | The Company may terminate Executive's employment for Cause, without any further liability hereunder to Executive, except that Executive shall be entitled to (i) payment of all accrued but unpaid salary through the date of termination, (ii) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4(g), and (iii) benefits to which the Executive is entitled as of the date of termination of employment under the terms of applicable benefit plans and programs (the "Accrued Rights"). |
b. | For the purposes of this Agreement, the Company shall have "Cause" to terminate Executive's employment based upon the following grounds (i) a felony conviction of Executive or the failure of Executive to contest prosecution for a felony, (ii) conviction of a crime involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Executive in the performance of his duties as an Executive after written notice from the Company that reasonably identifies the manner in which the Company believes that he has committed gross negligence or willful misconduct and the failure by Executive to cure such failure within forty-five (45) days after delivery of such notice. For purposes of this Section 7, "willful" shall be determined by the Board of Directors of AMSURG. In making such determination, the Board of Directors of AMSURG shall not act unreasonably or arbitrarily and no act or omission by Executive shall be deemed willful if taken by Executive in a good faith belief that such act or omission to act was in the best interests of the Company or if done at the express direction of the Board. |
c. | Prior to making a determination to terminate the Executive's employment for Cause, Executive shall have the opportunity, together with his counsel, to be heard before AMSURG's Board of Directors. |
a. | The Accrued Rights; |
b. | a lump sum payment equal to the sum of (i) the annual base salary payable to Executive as of the date of the Executive's Separation from Service and (ii) the target bonus established by the Compensation Committee of the AMSURG Board of Directors for the Executive pursuant to the annual cash bonus plan for the year in which the Separation of Service occurs; |
c. | Executive shall also continue to be covered under health and life insurance plans of the Company for twelve (12) months, or the Company shall provide the economic equivalent thereof if such continuation is not permissible under the terms of the Company's insurance plans; |
d. | If Executive's employment is terminated following the end of a fiscal year and prior to the payment date for the bonus described in Section 4(a), if any, that Executive would have been entitled to receive with respect to such completed fiscal year, based upon AMSURG's or the Company's actual results, as applicable, the Company shall pay to Executive, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program, the amount of such bonus described in Section 4(a), if any, that Executive would have been entitled to receive with respect to such completed fiscal year had Executive's employment not terminated prior to the payment date for such bonus; and a pro rata portion of the bonus described in Section 4(a), if any, that Executive would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon AMSURG's or the Company's actual results, as applicable, for the year of termination and the percentage of the fiscal year that shall have elapsed through the date of termination of employment, payable to Executive pursuant to Section 4(a) had Executive's employment not terminated, which pro-rata bonus shall be paid at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program; |
a. | a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Executive as of the date of the Executive's Separation from Service and (ii) the target bonus established by the Compensation Committee of the AMSURG Board of Directors for the Executive pursuant to the annual cash bonus plan for the year in which the Separation of Service occurs; |
b. | Executive shall also continue to be covered under health and life insurance plans of the Company for eighteen (18) months, or the Company shall provide the economic equivalent thereof if such continuation is not permissible under the terms of the Company's insurance plans; and |
c. | If Executive's employment is terminated following the end of a fiscal year and prior to the payment date for the bonus described in Section 4(a), if any, that Executive would have been entitled to receive with respect to such completed fiscal year, based upon AMSURG's or the Company's actual results, as applicable, the Company shall pay to Executive, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program, the amount of such bonus described in Section 4(a), if any, that Executive would have been entitled to receive with respect to such completed fiscal year had Executive's employment not terminated prior to the payment date for such bonus; and a pro rata portion of the bonus described in Section 4(a), if any, that Executive would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon AMSURG's or the Company's actual results, as applicable, for the year of termination and the percentage of the fiscal year that shall have elapsed through the date of termination of employment, payable to Executive pursuant to Section 4(a) had Executive's employment not terminated, which pro-rata bonus shall be paid at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program. |
12. | RESTRICTIVE COVENANTS. |
(a) | Confidential Information. Executive agrees not to disclose, either during the time he is employed by the Company or following the termination of his employment at the Company, any confidential information concerning the Company or AMSURG , including, but not limited to, customer lists, business plans, contract terms, financial costs, sales data, or business opportunities whether for existing, new or developing businesses. |
(b) | Non-Compete. For a period of one (1) year following the date of the termination of Executive's employment with the Company other than in the event of a termination by the Executive for Good Reason, Executive agrees that he will not, either as an individual for his own account, as a partner or joint venturer, or as an employee, agent, Executive, director, consultant, owner or otherwise, without the written consent of the Company, own, finance, operate, manage, design, build, solicit prospects for or otherwise enter into or engage in any phase of: |
(i) | the ambulatory surgery business, |
(ii) | any business the products, services, or activities of which include the provision of anesthesia services, pain management services, emergency medicine services, neonatology services, perinatology services and/or radiology services (collectively the "Medical Services"), |
(iii) | any business the products, services, or activities of which include the provision of administrative services for any of the Medical Services, including without limitation, quality assurance services, utilization management services, billing services, recruitment services and medical management information services, or |
(iv) | any other line of business in which the Company is engaged on the date of termination of Executive's employment with the Company (for purposes of clarification of this Section 12(b)(iv), the Company shall not be deemed to be engaged in a line of business if the Company provides the goods or services that constitute such line of business solely to business units, segments or subsidiaries of the Company or facilities owned or operated by the Company), |
(c) | Non-Solicitation. Upon termination or expiration of his employment, whether voluntary or involuntary, Executive agrees not to directly or indirectly solicit business of the type described in Sections 12(b)(i), 12(b)(ii), 12(b)(iii), and 12(b)(iv) above from any entity, organization or person which has contracted with the Company, which has been doing business with the Company, or from which the Executive knew or had reason to know that the Company was soliciting or going to solicit business at the time of Executive's termination, for a one-year period from the date of Executive's termination of his employment with the Company. For purposes of this Section 12(c), references to the Company shall include all subsidiaries and affiliates of the Company, including but not limited to AMSURG. |
(d) | Enforcement. Executive and the Company acknowledge and agree that any of the covenants contained in this Section 12 may be specifically enforced through injunctive relief, but such right to injunctive relief shall not preclude Company from other remedies which may be available to it. In case any of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, including without limitation geographic scope, duration or functional coverage, any such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had been limited or modified (consistent with its general intent) to the extent necessary to make it valid, legal and enforceable, or if it shall not be possible to so limit or modify such invalid, illegal or unenforceable provision or part of a provision, this Agreement shall be construed as if such invalid, illegal or unenforceable provision or part of a provision had never been contained in this Agreement. |
(e) | Termination. Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this |
21. | DEFINITIONS. For purposes of this Agreement the following definitions shall apply: |
a. | "Change in Control" shall mean the occurrence of any of the following: |
(i) | the acquisition of at least a majority of the outstanding shares of Common Stock (or securities convertible into Common Stock) of AMSURG by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(l) under the Exchange Act); |
(ii) | the merger or consolidation of AMSURG with or into another corporation or other entity, or any share exchange or similar transaction involving AMSURG and another corporation or other entity, if as a result of such merger, consolidation, share exchange or other transaction, the persons who owned at least a majority of the Common Stock of AMSURG prior to the consummation of such transaction do not own at least a majority of the Common Stock of the surviving entity after the consummation of such transaction; |
(iii) | the sale of all, or substantially all, of the assets of AMSURG; or |
(iv) | any change in the composition of the Board of Directors of AMSURG, such that persons who at the beginning of any period of up to two years constituted at least a majority of the Board of Directors of AMSURG, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of AMSURG at the end of such period. |
b. | Unless otherwise stated, "Company" shall mean Sheridan Healthcare, Inc., any successor entity or their successors or assigns. |
c. | "Good Reason" shall exist if: |
(i) | there is a material diminution in the nature or the scope of Executive's authority and responsibilities; |
(ii) | there is a material diminution in Executive's rate of base salary or overall compensation (for reasons other than AMSURG or Company performance or stock price); |
d. | "Separation from Service" shall mean the date on which the Company and Executive reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Executive will perform after such date will permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36- month period. Whether a Separation from Service occurs shall be interpreted consistent with Section 1.409A-l(h) of the U.S. Treasury Regulations. |
e. | "Performance Termination" shall mean the termination of Executive's employment by the Company without Cause (as defined in Section 7) following the failure of AMSURG or the Company to achieve at least 85% of the budgeted level of earnings from continuing operations before income taxes (Corporate Pre-Tax Profits) or other similar budget measure approved by the Board of Directors of AMSURG (as such measure may be adjusted by the Board during any fiscal year) and designated by the Board of Directors as the budget measure for purposes of this definition of "Performance Termination," during any two fiscal years during a consecutive three fiscal year period. The determination whether AMSURG or the Company has failed to achieve any such budget measure for a fiscal year shall be based upon AMSURG's audited financial statements for such fiscal year. In making a determination whether AMSURG or the Company has failed to achieve any such budget measure for a fiscal year, the Board shall consider the impact of changes in general economic conditions, legal or regulatory changes generally affecting the industry in which AMSURG and/or the Company operates, and adverse weather incidents or other acts of God that are not within the control of AMSURG and the Company. In the event the Board of Directors determines that AMSURG or the Company has failed to achieve such budget measure in any fiscal year, the Board will give the Executive written notice of such fact within five (5) business days following the filing of the Annual Report on Form 10-K for AMSURG for such fiscal year. In the event the Board of Directors |
25. | SECTION280G LIMITATION. |
a. | Notwithstanding any other provision to the contrary, if any payments or benefits Executive would receive from the Company pursuant to this Agreement or otherwise (collectively, the "Payments") would, either separately or in the aggregate, (i) constitute "parachute payments" within the meaning of Section 2800 of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then the Payments will be equal to the Reduced Amount (defined below). The "Reduced Amount" will be either (1) the entire amount of the Payments, or (2) an amount equal to the largest portion of the Payments that would result in no portion of any of the Payments (after reduction) being subject to the Excise Tax, whichever amount after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in the Executive's receipt, on an after-tax basis, of the greatest amount of the Payments. If a reduction in the Payments is to be made so that the amount of the Payments equals the Reduced Amount, the Payments will be paid only to the extent permitted under the Reduced Amount alternative; provided, that in the event the Reduced Amount is paid, the cash payments set forth in Section 9 shall be reduced as required by the operation of this Section 25. |
b. | The Company shall engage the accounting firm engaged by the Company for general audit purposes at least 20 business days prior to the effective date of the Change in Control to perform any calculation necessary to determine the amount, if any, payable to Executive pursuant to Section 9, as limited by this Section 25. If the accounting firm so engaged by the Company is also serving as accountant or auditor for the individual, entity or group that will control the Company following the Change in Control, the Company may appoint a nationally recognized accounting firm other than the accounting firm engaged by the Company for general audit purposes to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. |
c. | The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within 20 days after the date on which such accounting firm has been engaged to make such determinations or within such other time period as agreed to by the Company and Executive. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive. |
d. | Notwithstanding the foregoing, in determining the reduction, if any, that shall occur as a result of this Section 25, the amounts payable or benefits to be provided to Executive shall be reduced such that the economic loss to Executive as a result of the Excise Tax elimination is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. |
e. | In the event that following the payment of any Payments pursuant to Section 9, as reduced, if applicable, as required by the operation of Section 25(a)-(d), the Internal Revenue Service (the "IRS") determines that Executive is liable for the Excise Tax as a result of the receipt of such Payments or Reduced Amount, as applicable, then Executive shall be obligated to pay back to the Company, within 30 days after final IRS determination, an amount of the Payments or Reduced Amount, as applicable, equal to the "Repayment Amount." The Repayment Amount shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Executive's net proceeds with respect to the Payments or Reduced Amount, as applicable, (after taking into account the payment of the Excise Tax imposed on such Payments or Reduced Amount, as applicable) shall be maximized. Notwithstanding the foregoing, the Repayment Amount shall be zero if a Repayment Amount of more than zero would not eliminate the Excise Tax imposed on the Payments or Reduced Amount. If the Excise Tax is not eliminated pursuant to this paragraph, Executive shall pay the Excise Tax. |
/s/ Patrick Solomon | |||
Patrick Solomon | |||
Sheridan Healthcare, Inc. | |||
By: | /s/ Christopher A. Holden | ||
Name: | Christopher A. Holden | ||
Title: | Chief Executive Officer | ||
AmSurg Corp. | |||