Exhibit 10.7
SYMBION, INC.
EXECUTIVE CHANGE IN CONTROL
SEVERANCE PLAN AND
SUMMARY PLAN
DESCRIPTION
Amended and Restated
March 1, 2006
SYMBION, INC.
EXECUTIVE CHANGE IN CONTROL
SEVERANCE PLAN AND
SUMMARY PLAN
DESCRIPTION
TABLE OF CONTENTS
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INTRODUCTION
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Introduction
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1
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SECTION 1.
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In General
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1
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SECTION 2.
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Definitions
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1
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SECTION 3.
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What Benefits Are Provided Under the
Plan?
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4
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SECTION 4.
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How Do I Become Eligible to Receive
Benefits?
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5
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SECTION 5.
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How Do I Make a Claim for Benefits?
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5
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SECTION 6.
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Can I Lose My Plan Benefits?
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6
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SECTION 7.
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What Are My Rights if My Claim for Benefits Is
Denied?
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6
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SECTION 8.
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May I Assign My Rights Under This
Plan?
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7
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SECTION 9.
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What Events Can Cause the Plan To Be Changed or
Terminated?
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7
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SECTION 10.
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Additional Information
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8
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SECTION 11.
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What Are My Rights Under ERISA?
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8
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SECTION 12.
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Summary of Plan Information
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9
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INTRODUCTION
This Plan document was adopted effective
December 11, 1997, and revised effective May 11, 2000 to
reflect that UniPhy Healthcare, Inc. changed its name to
Symbion, Inc. The Plan has been amended from time to time and
was amended and restated effective March 1, 2006. This
document is a summary of your benefits, rights and obligations
under the Symbion, Inc. Executive Change in Control Severance
Plan (the “Plan”). This document is intended to comply
with both the summary plan description and the written plan
requirements of the Employee Retirement Income Security Act of 1974
(“ERISA”) and the regulations issued under ERISA by the
United States Department of Labor.
Symbion, Inc. (“Symbion”) may
generally amend or terminate the Plan at any time prior to a
“change in control” (see definitions). For that reason,
all statements in this document are subject to change at any time
prior to a change in control without notice.
The Plan Administrator has the discretion to
interpret the provisions of the Plan and make determinations for
the payment of Plan benefits. All such determinations are final,
binding and conclusive.
SECTION 1. In
General
Symbion has established the Plan with the
intention of providing benefits to Eligible Employees of Symbion
and its Affiliates under the conditions described in this document.
Plan benefits are intended to provide additional compensation to
Eligible Employees whose positions are eliminated or adversely
effected following a change in control of Symbion. Therefore, the
amount of your benefit is calculated without regard to your actual
period of unemployment following a change in control, if
any.
This document constitutes the entire written
Plan. Any oral or other written expressions of the Plan or related
to the Plan or its subject matter are completely superseded by this
document. Except for a formal written Plan amendment that is
properly adopted by Symbion, or a written modification authorized
under Section 9, any oral or written statements concerning the
Plan shall not modify or add to this Plan document.
As is more fully explained in Section 4,
severance benefits are not provided under this Plan if your
employment termination is not connected with a Change in
Control.
SECTION 2. Definitions
Defined terms in the Plan are indicated by
initial capitalization of the term. References to a
“Section” mean a section of this Plan. Pronouns that
refer to one gender include the other gender. “You” or
“your” means you, an individual in the employ of
Symbion.
a.
“ Administrator ”
or “ Plan Administrator ” means the chief
executive officer of Symbion. The Administrator may delegate any of
his or her duties or authorities to a committee
of the Board of Directors. The Administrator has
absolute discretion to make all decisions under the Plan, including
making determinations about eligibility for and the amounts of
Benefits payable under the Plan and interpreting all Plan
provisions. All decisions of the Administrator are final, binding
and conclusive. If a Change in Control occurs, as described in
Section 2.e, the Administrator shall be the individual who was
the chief executive officer of Symbion immediately prior to the
Change in Control.
b.
“ Affiliate ”
means Symbion and all corporations, partnerships, trusts and other
entities that are members, with Symbion, of a controlled group of
corporations or a group of trades or businesses under common
control under Sections 414(b) and (c) of the
Internal Revenue Code.
c.
“ Annual Pay ”
means the following items of compensation payable to an Eligible
Employee immediately prior to the time of a Change in Control that
gives rise to payment of Benefits to the Eligible Employee
hereunder:
(1)
Normal monthly salary payable on
regular payroll dates, as adjusted to an annualized
rate.
(2)
Cash bonuses (including deferred
bonus accruals) normally payable in the fiscal year of Symbion that
includes the Change in Control, calculated by reference to
(i) the bonus amount that has been determined for the fiscal
year, (ii) if no bonus amount has been determined, the bonus
payment plan or policy previously adopted by the board of directors
of Symbion, or, (ii) if no such plan or policy has been
adopted, the amount of bonuses paid in the prior fiscal year (as
adjusted for increases in cost of living announced by federal
government) to the Eligible Employee or to a similarly situated
employee of Symbion or an Affiliate, and as enhanced for increases
in the profitability of Symbion or increases in value of
shareholder equity.
(3)
The value of noncash benefits
(taxable or nontaxable) under fringe benefit arrangements of
Symbion or an Affiliate normally available to the Eligible
Employee, to the extent that such fringe benefits are not otherwise
provided to the Eligible Employee as a Benefit pursuant to
Section 4
d.
“ Benefit ” means
the severance benefits described in Section 3.
e.
“ Change in Control
” means the occurrence at any time during the employment term
of an Eligible Employee of any of the following events:
(1)
An acquisition (other than directly
from the Company) of any voting securities of the Company (the
“ Voting Securities ”) by any “
Person ” (as that term is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the “ Exchange Act ”)),
immediately after which such Person has “ Beneficial
Ownership ” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of the
combined voting power of the company’s then outstanding
voting Securities; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are
acquired in a Non-Control Acquisition 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 (A) the Company, or (B) any corporation or
other Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
“ Subsidiary ”), (2) the Company or its
Subsidiaries, or (3) any person in connection with a
Non-Control Transaction (as hereinafter defined);
(2)
The individuals who, as of the date
of this Agreement, are members of the Company’s Board of
Directors (the “ Incumbent Board ”), cease for
any reason to constitute at least a majority of the members of the
Company’s Board of Directors; provided, however, that if the
election, or nomination for election by the Company’s
stockholders, of any new director was approved by a vote of at
least a majority 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 Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Company’s Board of
Directors (a “ Proxy Contest ”) including by
reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
(3)
Approval by stockholders of the
Company of:
(i)
A merger, consolidation or
reorganization involving the Company, unless such merger,
consolidation or reorganization is a Non-Control Transaction. A
“ Non-Control Transaction ” shall mean a merger,
consolidation or reorganization of the Company where:
(A)
the stockholders of the company,
immediately before such merger, consolidation or reorganization,
own directly or indirectly immediately following such merger,
consolidation or reorganization, more than 50% 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 own ownership of the
Voting Securities immediately before such merger, consolidation or
reorganization; and
(B)
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 a majority of the members of the
board of directors of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority of the Voting
Securities of the Surviving Corporation;
(ii)
A complete liquidation or dissolution of the Company; or
(iii)
An agreement for the sale or other
disposition of all of the assets of the Company