Exhibit 10.2
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is made and executed to be
effective as of the consummation of the Merger, by and between
Symbion, Inc. (the “ Company ”), and
Clifford G. Adlerz, an individual and resident of Franklin,
Tennessee (“ Executive ”). Defined terms
used herein have the meaning attributed thereto in the text hereof
or if not so defined, as set forth in Section 18.
RECITALS:
WHEREAS, the Company, Symbol
Acquisition, L.L.C., a Delaware limited liability company, and
Symbol Merger Sub, Inc., a Delaware corporation entered into
an Agreement and Plan of Merger, dated as of April 24, 2007,
(the “ Merger Agreement ”) upon the consummation
of which Symbol Merger Sub, Inc. will be merged with and into
the Company, with the Company as the surviving
corporation;
WHEREAS, prior to but in connection
with the Merger, Symbol Acquisition, L.L.C. will be converted into
Symbion Holdings Corporation (the “ Parent ”),
which will become the parent holding company of the Company by
virtue of the Merger; and
WHEREAS, the Company and Executive
desire to memorialize in this Agreement the terms of
Executive’s employment with the Company effective as of the
consummation of such Merger, with the understanding that this
Agreement shall supersede any and all prior agreements relating to
Executive’s employment with the Company or any Company
Subsidiary in all respects;
NOW, THEREFORE, in consideration of
the mutual undertakings of the parties set forth in this Agreement,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1.
Employment.
The Company hereby
employs Executive, and Executive hereby accepts employment with the
Company, on the terms and conditions hereinafter set
forth.
2.
Term. The initial term of this Agreement
shall commence and shall be effective as of the consummation of the
Merger, (the “ Effective Date ”) and shall
extend from that date for a period of three (3) years, unless
earlier terminated as provided in Section 8 of this
Agreement. At the beginning of each month after the Effective
Date in which Executive is employed by the Company, the term of
this Agreement shall automatically be extended for an
additional
month so that the Employment Term on such date
is a period of three (3) years (the initial term and any such
extensions, the “ Employment Term ”).
3.
Nature of Duties and
Responsibilities. (a) During the Employment Term,
Executive shall be employed by the Company as its President and
Chief Operating Officer and shall have such duties, powers and
authority as generally inure to those offices. Executive
shall have the full authority and responsibility for managing the
day to day business and operation of the Company. Executive
shall report to the Company’s Chief Executive Officer, and
shall not be subordinate to any officer or employee of the Company
other than its Chief Executive Officer.
(b)
The Company shall use its best
efforts to cause Executive to be elected to the Board of the
Company and the Parent, such membership to continue for so long as
Executive holds the offices set forth in
Section 3(a).
4.
Extent of Services.
(a) Executive shall
devote his full time, attention, skills and energies during the
Employment Term to the business of the Company. During the
Employment Term, Executive shall not be engaged in any other
business activity that conflicts with or detracts from his duty to
the Company or with the business of the Company, whether or not
such business activity is pursued for gain, profit or other
pecuniary advantage. Notwithstanding the foregoing, Executive
may, at his option, devote reasonable time and attention to
personal investments and to civic, charitable or social
organizations as he deems appropriate. With the Board’s
prior written consent, Executive may devote a reasonable amount of
his time to serve on the board of directors of one or more public
or private corporations, provided that such service will not
interfere with the performance of Executive’s duties
hereunder and, provided further, that the business activities of
any such corporation are not competitive with those of the
Company.
(b)
For the avoidance of doubt, neither
the existence nor terms of this Agreement shall be deemed to
preclude Executive from performing such duties to the Company as
may be required for the Company to satisfy its obligations under
the Merger Agreement.
5.
Location. The permanent place of employment of
Executive shall be the corporate headquarters of the Company
located in Nashville, Tennessee. Executive shall not be
required to relocate his place of employment more than 35 miles
from such location at any time during the Employment Term without
his prior consent, which consent may be withheld by Executive for
any reason he deems appropriate. Executive may be required to
conduct reasonable travel in the course of the performance of his
duties on behalf of the Company.
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6.
Compensation.
(a)
For all services rendered by
Executive under this Agreement, the Company shall compensate
Executive at Executive’s current annual base rate as in
effect on the date hereof; provided, however, that effective
January 1, 2008, Executive’s annual base rate shall be
increased to $375,000.
(b)
The annual rate of compensation
provided in Section 6(a) may be adjusted upward effective
on January 1 for each year beginning after January 1,
2008 during the Employment Term by an amount determined by the
Compensation Committee of Parent’s Board of Directors (the
“ Board ”) in its sole discretion.
Executive is not entitled to any guaranteed annual increase in his
rate of compensation.
(c)
During the Employment Term,
Executive shall be eligible to receive a bonus payment each year
that is equal to a percentage of the amount of compensation that is
in effect under Section 6(a). The percentage shall be
determined by reference to the level of achievement by Executive of
the annual performance goals that are established by the
compensation committee of the Board so that the target bonus
opportunity is 100% of the amount specified in
Section 6(a) if Executive achieves at least 100% of the
performance goals. The percentage shall be reduced to
correspond to achievement that is less than 100%, provided that no
bonus shall be payable under this provision if achievement is at a
level of less than 80% of the performance goals. The
Executive shall be eligible for additional bonus payments upon
achievement of such other performance targets that are specified by
the compensation committee of the Board.
(d)
The Company shall be entitled to
withhold such amounts on account of employment and payroll taxes
and similar matters required by applicable law, rule or
regulation of any appropriate governmental authority.
(e)
The Company shall continue to pay
Executive his compensation during any period of physical or mental
incapacity or disability, but shall not be obligated to pay
Executive any compensation for any continuous period of physical or
mental incapacity or disability after Executive is determined to be
disabled by the Board, as provided in Section 8(g).
(f)
During the Employment Term, the
Company shall pay the reasonable expenses incurred by Executive
(based on business development objectives and within limits that
may be established by the Board) 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 promptly upon the
submission to the Company by Executive of documentation reasonably
satisfactory to the Company.
7.
Other Benefits.
(a)
Executive shall be entitled to and
eligible for group health, life and disability insurance coverage,
vacation, and any other fringe benefits that
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may from time to time be available to other
salaried employees of the Company. Executive may participate in any
other pension, profit sharing or other employee benefit plan of the
Company or in which the Company participates. Any and all
such benefits provided in this Section 7(a) shall
terminate on the expiration or earlier termination of this
Agreement, except as otherwise required by law or as otherwise
provided herein.
(b)
(i)
The Company shall recommend to the
Board that, and shall use its best efforts to cause, the grant to
Executive at the Effective Date, of non-qualified options to
purchase Parent common stock under a Parent plan, with customary
terms and conditions, the material terms of which such grant are
set forth on Schedule A hereto.
(ii)
All shares of common stock of the
Parent and all awards convertible or exercisable into such shares,
whether acquired pursuant to Section 7(b)(i) or
otherwise, shall be subject to the terms and conditions set forth
in the Shareholders Agreement.
7.A.
Purchased Equity
. Executive shall invest
at the Effective Time $2,750,000 in Parent in connection with the
Merger.
8.
Termination.
(a)
Termination for Cause. Prior
to the end of the Employment Term, the Company may terminate this
Agreement for Cause, without any further liability hereunder to
Executive; provided that the Company shall pay all accrued
but unpaid compensation earned to the date of
termination.
(b)
Termination Without Cause.
Prior to the end of the Employment Term, the Company may terminate
this Agreement other than as provided in Section 8(a), upon
thirty (30) days prior written notice to Executive. In such
event, the Company shall pay to Executive the amounts required
under Section 8(h).
(c)
Death of Executive. In the
event Executive’s death occurs during the Employment Term,
the Company shall pay to the estate of Executive all accrued but
unpaid compensation earned to the date of death. This
Agreement otherwise shall terminate in all respects upon
Executive’s death.
(d)
Voluntary Resignation.
Executive may, upon thirty (30) days prior written notice to the
Company, voluntarily resign and thereby terminate this Agreement at
any time prior to the expiration of the Employment Term. In
such event, the Company shall pay to Executive all accrued but
unpaid compensation earned to the effective date of
resignation. Executive shall not be entitled to any benefits
under this Agreement after the effective date of
resignation.
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(e)
Good Reason. Executive may
resign and thereby terminate this Agreement for Good Reason upon
prior written notice from Executive (as provided in the definition
of Good Reason). In such event, the Company shall pay to
Executive the amounts required under Section 8(h).
(f)
[RESERVED]
(g)
Disability. In the event that
Executive is unable to perform his services under this Agreement
for a continuous period of one hundred eighty (180) days during the
term of this Agreement and Executive is determined to be disabled
under the Company’s long-term disability plan, the Company
may terminate Executive’s employment and the Board may remove
Executive from his position on the Board without further liability
to Executive, except as specified in Section 8(h).
(h)
Severance Benefits. Except for
a termination of employment as provided in Sections 8(a), (c),
(d) or (g), if (i) the Company terminates the employment
of Executive without Cause or (ii) Executive elects to resign
and terminate this Agreement for Good Reason, then, in addition to
all accrued but unpaid compensation earned to the effective date of
such termination, subject to Executive’s and the
Company’s execution and delivery of mutual releases of claims
reasonably satisfactory to the Company and Executive, the Company
shall pay to Executive a severance benefit in an amount equal to
(1) three times the Executive’s rate of annual base
compensation determined by reference to the highest base salary
rate in effect at any time during the 12-month period prior to the
effective date of such termination; (2) three times an amount
equal to the 100% target bonus opportunity provided under
Section 6 (c) in respect of the year in which such
termination occurs, as if the performance goals set by the Board
had been fully achieved without regard to actual achievement; and
(3) continuation of benefits at no cost under the benefit
programs specified in Section 7(a) for the period of time
that he is eligible for continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”). Upon a termination of employment due
to Executive’s disability pursuant to Section 8(g),
Company shall pay Executive 75% of the base salary then in effect
as set forth in Section 6(a) (reduced by any
Company-provided disability insurance benefits), commencing upon
the determination of Employee’s disability by the Board and
continuing until the first to occur of (i) 36 months or
(ii) the death of Executive, and Executive shall receive
benefits at no cost under the benefit programs specified in
Section 7(a) for the period of time that he is eligible
for continuation coverage under COBRA. Nothing in this
Section 8(h) is intended to affect any vesting provisions
applicable to any stock option or stock award of Executive in
effect as of the date his employment is terminated.
9.
Gross-Up Payment.
(a)
Gross Up Payment. Anything in
this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or
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distribution by or on behalf of the Company to
or for the benefit of Executive as a result of a change in control
of the Company (within the meaning of section 280G of the Code
(whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this
Section 9 (a “ Payment ”)) would be subject
to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
“ Excise Tax ”), then Executive shall be
entitled to receive an additional payment (a “ Gross-Up
Payment ”) in an amount such that after payment by
Executive of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(i)
Tax Opinion. Subject to the
provisions of Sections 9(a) and (b), all determinations
required to be made under this Section 9, including whether
and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized
accounting firm or law firm selected by the Executive (subject to
the reasonable consent of the Company) (the “ Tax Firm
”) provided, however, that the Tax Firm shall not determine
that no Excise Tax is payable by Executive unless it delivers to
Executive a written opinion (the “ Tax Opinion
”) that failure to pay the Excise Tax and to report the
Excise Tax and the payments potentially subject thereto on or with
Executive’s applicable federal income tax return will not
result in the imposition of an accuracy-related or other penalty on
Executive. All fees and expenses of the Tax Firm shall be
borne solely by the Company. Within 15 business days of the
receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by the Executive or the Company,
the Tax Firm shall make all determinations required under this
Section 9, shall provide to the Company and Executive a
written report setting forth such determinations, together with
detailed supporting calculations, and, if the Tax Firm determines
that no Excise Tax is payable, shall deliver the Tax Opinion to
Executive. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to Executive
within fifteen days of the receipt of the Tax Firm’s
determination. Subject to the remainder of this
Section 9, any determination by the Tax Firm shall be binding
upon the Company and Executive; provided, however, that Executive
shall only be bound to the extent that the determinations of the
Tax Firm hereunder, including the determinations made in the Tax
Opinion, are reasonable and reasonably supported by applicable
law. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial
determination by the Tax Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company
should have been made (“ Underpayment ”),
consistent with the calculations required to be made
hereunder. In the event that
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it is ultimately determined in accordance with
the procedures set forth in Section 9(c)(ii) that
Executive is required to make a payment of any Excise Tax, the Tax
Firm shall reasonably determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit, of Executive. In
determining the reasonableness of Tax Firm’s determinations
hereunder, and the effect thereof, Executive shall be provided a
reasonable opportunity to review such determinations with Tax Firm
and Executive’s tax counsel. Tax Firm’s
determinations hereunder, and th
