Exhibit 10.1
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT dated as of December 19, 2008 (the "Agreement"), is by
and between Healthways, Inc., a Delaware corporation (the
"Company"), and Ben R. Leedle, Jr. (the "Executive"), and amends
and replaces in its entirety that certain Employment Agreement
dated February 1, 2006, between the Company and the
Executive.
WHEREAS , the Company desires that the Executive serve
or continue to serve as Chief Executive Officer and the Executive
desires to hold such position under the terms and conditions of
this Agreement; and
WHEREAS , the parties desire to enter into this
Agreement setting forth the terms and conditions of the employment
relationship of the Executive with the Company.
NOW, THEREFORE
, intending to be legally bound
hereby, the parties agree as follows:
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I.
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EMPLOYMENT
. The Company hereby employs the
Executive and the Executive hereby accepts employment with the
Company, upon the terms and subject to the conditions set forth
herein.
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II.
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TERM . Subject to termination as stated in Section
VI, the term of employment of the Executive pursuant to this
Agreement (as the same may be extended, the “Term”)
shall commence on December 19, 2008 (the “Effective
Date”), and shall have a continuous term of two (2) years
thereafter.
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III.
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POSITION . During the Term, the Executive shall serve as
Chief Executive Officer of the Company performing duties
commensurate with the position and such additional duties as the
Company shall determine. If asked, the Executive agrees to serve,
without any additional compensation, as a director on the Board of
Directors of the Company (the “Board”) and/or the board
of directors of any subsidiary of the Company, and/or in one or
more officer positions with the Company and/or any subsidiary of
the Company. If the Executive’s employment is terminated for
any reason, whether such termination is voluntary or involuntary,
the Executive shall resign as a director and officer of the Company
(and any of its subsidiaries), such resignation to be effective no
later than the date of termination of the Executive’s
employment with the Company.
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IV.
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DUTIES . During the Term, the Executive shall devote
his full time and attention during normal business hours to the
business and affairs of the Company; provided, however, that it
shall not be a violation of this Agreement for the Executive with
the approval of the Company to devote reasonable periods of time to
charitable and community activities and industry or professional
activities, and/or to manage personal investments, so long as such
activities do not interfere with the performance of the
Executive’s responsibilities under this Agreement.
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A.
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Base Salary
. The Executive’s initial base
salary as of the Effective Date is $712,400. Effective January 1 of
each calendar year after the Effective Date during the Term of this
Agreement, upon the recommendation of the Board (or a committee of
the Board) Executive’s base salary shall be reviewed and may
be increased if and as the Board (or a committee of the Board) may
deem advisable. Such initial base salary, as it may be increased
during the Term, is defined as the “Base Salary.” The
Base Salary shall be payable in substantially equal installments in
accordance with the Company’s normal payroll practices, and
is subject to all proper taxes and withholding. The Base Salary
rate at which the Executive is being compensated on the Date of
Termination (as defined below) shall be the Base Salary rate used
in determining all severance amounts payable to the Executive
hereunder.
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B.
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Bonus Plan
. Such bonus, if any, as shall be
determined by the Board (or any designated Committee of the Board
comprised solely of independent directors), shall be paid in
accordance with the terms and conditions of the bonus plan
established for the Company (“Bonus Plan”).
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C.
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Long Term Incentive
Awards . During the Term,
the Board (or any designated committee of the Board comprised
solely of independent directors) will consider, in its sole
discretion, long term incentive awards to the Executive pursuant to
the Company’s equity incentive plans.
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D.
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Vacation . During each calendar year of this Agreement,
the Executive shall be entitled to vacation in accordance with
Company policy in effect from time to time, but in any event not
less than four (4) weeks per calendar year.
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E.
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Other Benefits
. In addition to the benefits
specifically provided for herein, during the Term the Executive
shall be entitled to participate in all benefit plans maintained by
the Company for officers generally according to the terms of such
plans.
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VI.
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TERMINATION OF
AGREEMENT . The
Executive’s employment under this Agreement shall not be
terminated except as set forth in this Section. Any reference to
the date of delivery of a notice of termination or resignation by
either the Company or the Executive in this Section VI shall
constitute the “Date of Termination,” unless otherwise
set forth herein. For purposes of this Agreement, the Executive
will be deemed to have terminated employment when the Executive has
a “separation from service” from the Company as
determined in accordance with Treasury Regulation
1.409A-1(h).
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A.
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By Mutual Consent
. The Executive’s employment
pursuant to this Agreement may be terminated at any time by the
mutual written agreement of the Company and the Executive upon such
terms as are agreed upon between the parties.
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B.
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Death . If Executive dies during the Term of this
Agreement, the Company shall pay his Base Salary due through the
date of his death plus a pro-rata portion of
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any Bonus Plan or other compensation
to which he is otherwise entitled as of the time of his death,
which Bonus Plan amount will be determined and paid after the end
of the fiscal year for which the Bonus Plan was in place. The
amount of Base Salary due through the date of the Executive's death
shall be paid to his designated beneficiary within thirty (30) days
of the Executive's death, with the date of such payment chosen by
the Company in its sole discretion. Any bonus shall be paid at such
time designated in the Bonus Plan. Furthermore, all outstanding
stock options, restricted stock, restricted stock units and any
other unvested equity incentives shall vest and/or remain
exercisable for their stated terms solely in accordance with the
terms of the award agreements to which the Company and the
Executive are parties at the time of his death. In addition, all
amounts contributed by the Company to the Capital Accumulation Plan
(“CAP”) for the benefit of the Executive shall vest and
thereafter be paid out in accordance with the terms of the CAP as
in effect at the time of the Executive’s death. The Company
shall then have no further obligations to the Executive or any
representative of his estate or his heirs except that
Executive’s estate or beneficiaries, as the case may be,
shall be paid such amounts as may be payable under the
Company’s life insurance policies and other plans as they
relate to benefits following death then in effect.
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1.
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The Executive’s employment may
be terminated by written notice by either party to the other party,
when:
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a.
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the Executive suffers a physical or
mental disability entitling the Executive to long-term disability
benefits under the Company’s long-term disability plan, if
any, or
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b.
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in the absence of a Company
long-term disability plan, the Executive is unable, as determined
by the Board (or any designated Committee of the Board), to perform
the essential functions of his regular duties and responsibilities,
with or without reasonable accommodation, due to a medically
determinable physical or mental illness which has lasted (or can
reasonably be expected to last) for a period of six (6) consecutive
months.
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2.
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If the Executive’s employment
is terminated under this Section (C), the Executive shall be
entitled to receive:
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a.
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all Base Salary and benefits due to
the Executive through the Date of Termination (payable within
thirty (30) days of the Date of Termination, with the date of such
payment determined by the Company at its sole discretion) and a
pro-rata portion of any Bonus Plan or other compensation to which
he is otherwise entitled as of the Date of Termination, which Bonus
Plan amount will be determined after the end of the fiscal year for
which the Bonus
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Plan was in place and paid in
accordance with the terms of such Bonus Plan;
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b.
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an amount equal to the
Executive’s Base Salary for a total of eighteen (18) months
following the Date of Termination; and
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c.
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if permitted under the
Company’s group medical insurance, group medical benefits at
the same rate as then in effect for the Company’s employees
for two (2) years after the Date of Termination; provided, that if
the Executive instead elects continuation of group benefits under
COBRA, the Company shall pay the full cost of the premiums for two
(2) years following the Date of Termination. The costs of the
Company’s portion of any premiums due under this clause (c)
shall be included in the Executive’s gross income to the
extent the provision of such benefits is deemed to be
discriminatory under Section 105(h) of the Internal Revenue Code of
1986, as amended (the “Code”).
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3.
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The amounts in clauses 2(b) above
shall be reduced by any disability insurance payments the Executive
receives as a result of his disability, and shall be paid to the
Executive periodically at the regular payroll dates commencing as
of the Date of Termination and for the remaining term of the
non-compete covenant in Section IX hereof. In addition, the
Executive will receive an enhanced severance amount consisting of
six (6) additional months of the Executive’s Base Salary
(payable periodically at regular payroll intervals) upon his
execution of a full release of claims in favor of the Company.
Furthermore, all outstanding stock options, restricted stock,
restricted stock units and any other unvested equity incentives
shall vest and/or remain exercisable for their stated terms solely
in accordance with the terms of the award agreements to which the
Company and the Executive are parties on the Date of Termination.
In addition, all amounts contributed by the Company to the CAP for
the benefit of the Executive shall vest and thereafter be paid out
in accordance with the terms of the CAP as in effect on the Date of
Termination.
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D.
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By the Company for
Cause
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1.
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The Executive’s employment may
be terminated by the Board acting in good faith, by written notice
to the Executive specifying the event(s) relied upon for such
termination upon the occurrence of any of the following events
(each of which shall constitute “Cause” for
termination):
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a.
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the continued failure by the
Executive to substantially perform his duties after written notice
and failure to cure within sixty (60) days;
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b.
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conviction of a felony or engaging
in misconduct which is materially injurious to the Company,
monetarily or to its reputation or otherwise, or which would damage
Executive’s ability to effectively perform his
duties;
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c.
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theft or dishonesty by the
Executive;
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d.
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intoxication while on duty;
or
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e.
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willful violation of Company
policies or procedures after written notice and failure to cure
within thirty (30) days.
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2.
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If the Executive’s employment
is terminated under this Section (D), the Executive shall be
entitled to receive all Base Salary and benefits to be paid or
provided to the Executive under this Agreement through the Date of
Termination, and no more.
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3.
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In addition, the Executive will
receive an enhanced severance amount consisting of six (6)
additional months of the Executive’s Base Salary (payable
periodically at regular payroll intervals) upon his execution of a
full release of claims in favor of the Company. Furthermore, all
outstanding stock options, restricted stock, restricted stock units
and any other vested equity incentives shall remain exercisable
solely in accordance with the terms of the award agreements to
which the Company and the Executive are parties on the Date of
Termination. All unvested equity incentives shall terminate on the
Date of Termination. In addition, all amounts contributed by the
Company to the CAP for the benefit of the Executive that have
vested shall be paid out in accordance with the terms of the CAP as
in effect on the Date of Termination. The Executive shall not be
entitled to receive any unvested Company contributions to the
CAP.
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E.
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By the Company Without
Cause .
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1.
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The Executive’s employment may
be terminated by the Board at any time without Cause by delivery of
a written notice of termination to the Executive. If the
Executive’s employment is terminated under this Section (E),
the Executive shall be entitled to receive:
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a.
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all Base Salary and benefits due to
the Executive through the Date of Termination (payable within
thirty (30) days of the Date of Termination, with the date of such
payment determined by the Company in its sole discretion) and a
pro-rata portion of any Bonus Plan or other compensation to which
he is otherwise entitled as of the Date of Termination, which Bonus
Plan amount will be determined after the end of the fiscal year for
which the Bonus Plan was in place and paid in accordance with the
terms of such Bonus Plan;
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b.
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an amount equal to the
Executive’s Base Salary for a total of eighteen (18) months
following the Date of Termination; and
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c.
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group medical benefits for eighteen
(18) months after the Date of Termination. The costs of the
Company’s portion of any premiums due under this clause (c)
shall be included in the Executive’s gross income to the
extent the provision of such benefits is deemed to be
discriminatory under Section 105(h) of the Internal Revenue Code of
1986, as amended (the “Code”).
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2.
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The amount in clause 1(b) above
shall be paid to the Executive periodically at the regular payroll
dates commencing as of the Date of Termination and for the
remaining term of the non-compete covenant in Section IX hereof. In
addition, the Executive will receive an enhanced severance amount
consisting of six (6) additional months of the Executive’s
Base Salary (payable periodically at regular payroll intervals)
upon his execution of a full release of claims in favor of the
Company. Furthermore, all outstanding stock options, restricted
stock, restricted stock units and any other unvested equity
incentives shall vest and/or remain exercisable for their stated
terms solely in accordance with the terms of the award agreements
to which the Company and the Executive are parties on the Date of
Termination. In addition, all amounts contributed by the Company to
the CAP for the benefit of the Executive shall vest and thereafter
be paid out in accordance with the terms of the CAP as in effect on
the Date of Termination.
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F.
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By the Executive for Good Reason
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1.
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The Executive’s employment may
be terminated by the Executive by written notice of his resignation
delivered within sixty (60) days after the occurrence of any of the
following events, each of which shall constitute “Good
Reason” for resignation:
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a.
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a material reduction in the
Executive’s Base Salary (unless such reduction is part of an
across the board reduction affecting all Company executives with a
comparable title);
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b.
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a requirement by the Company to
relocate the Executive to a location that is gr
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