UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 4, 2014 (January 30, 2014)

 

 

AMSURG CORP.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Tennessee   000-22217   62-1493316

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

20 Burton Hills Boulevard

Nashville, Tennessee

  37215
(Address of Principal Executive Offices)   (Zip Code)

(615) 665-1283

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

Director Indemnification Agreements

Effective January 30, 2014, each of the current directors of AmSurg Corp., a Tennessee corporation (the “Company”) entered into an Indemnification Agreement (the “Indemnification Agreement”) with the Company. The Indemnification Agreement provides that the Company will indemnify the director (the “Indemnitee”) against all expenses (as defined in the Indemnification Agreement), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee and arising out of the Indemnitee’s service as a director to the fullest extent permitted by the Company’s charter, bylaws and the Tennessee Business Corporation Act or other applicable law and to any greater extent that applicable law may in the future permit. The Indemnification Agreement further provides procedures for the determination of an Indemnitee’s right to receive indemnification and the advancement of expenses.

The foregoing description of the Indemnification Agreement is qualified in its entirety by reference to the text of the Indemnification Agreement, the form of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Employment Agreements

Effective January 30, 2014, the Company entered into amended and restated employment agreements with each of Claire M. Gulmi, the Company’s Executive Vice President and Chief Financial Officer, David L. Manning, the Company’s Executive Vice President and Chief Development Officer, Phillip A. Clendenin, the Company’s Executive Vice President – Operations and Kevin D. Eastridge, the Company’s Senior Vice President, Finance and Chief Accounting Officer. The employment agreements provide for a minimum base salary and have an initial term expiring December 31, 2014. The employment agreements may be extended thereafter for one-year terms on each December 31 during the term of the Agreement. The employment agreements provide that if the Company elects not to extend the executive’s employment, the executive will be considered to have been terminated without cause.

In the event the executive’s employment with the Company is terminated as a result of his or her disability, the executive is entitled to receive a pro rata portion of his or her annual bonus, his or her base salary and benefits for a period of 12 months, and thereafter shall receive benefits in accordance with Company policy as in effect from time to time. Additionally, the employment agreements provide for acceleration of all time-based equity awards held by the executive at the time of his or her termination due to disability.

In the event the executive’s employment with the Company is terminated by the Company for “cause” (as defined in the employment agreements), the Company shall have no further obligations under the employment agreements.


In the event the Company terminates the executive’s employment with the Company without cause or the executive terminates his or her employment with the Company for “good reason” (as defined in the employment agreements), the executive is entitled to receive a severance payment equal to two times his or her base salary, two times his or her target annual bonus, a pro rata portion of his or her annual bonus and shall continue to be covered by the Company’s health and life insurance plans for a period of two years. Additionally, the employment agreements provide for the acceleration of all time-based equity awards held by the executive at the time of his or termination without cause or for good reason, unless his or her employment is terminated without cause following the failure of the Company to achieve at least 85% of the budgeted level of earnings from continuing operations before income taxes during any two years during the consecutive three fiscal year period prior to termination.

In the event the Company terminates the executive without cause or the executive terminates his or her employment with the Company for good reason within 12 months following a “change of control” (as defined in the employment agreements) of the Company, the executive is entitled to receive a severance payment equal to two times his or her base salary, two times his or her target annual bonus, a pro rata portion of his or her annual bonus and shall continue to be covered by the Company’s health and life insurance plans for a period of two years.

The employment agreements contain restrictive covenants pursuant to which the executives have agreed not to compete with the Company during the two years following the date of termination of his or her employment with the Company. This summary of the employment agreements are qualified in their entirety by reference to the text of the employment agreements, which are included as Exhibits 10.2, 10.3, 10.4 and 10.5 hereto and incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)    Exhibits.
10.1    Form of Indemnification Agreement
10.2    Third Amended and Restated Employment Agreement between the Company and Claire M. Gulmi
10.3    Third Amended and Restated Employment Agreement between the Company and David L. Manning
10.4    Amended and Restated Employment Agreement between the Company and Phillip A. Clendenin
10.5    Amended and Restated Employment Agreement between the Company and Kevin D. Eastridge


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AMSURG CORP.
By:  

/s/ Claire M. Gulmi

  Claire M. Gulmi
 

Executive Vice President, Chief

Financial Officer and Secretary

 

(Principal Financial and Duly

Authorized Officer)

Date: February 4, 2014


EXHIBIT INDEX

 

No.

  

Exhibit

10.1    Form of Indemnification Agreement
10.2    Third Amended and Restated Employment Agreement between the Company and Claire M. Gulmi
10.3    Third Amended and Restated Employment Agreement between the Company and David L. Manning
10.4    Amended and Restated Employment Agreement between the Company and Phillip A. Clendenin
10.5    Amended and Restated Employment Agreement between the Company and Kevin D. Eastridge

Exhibit 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “ Agreement ”) is made and entered into as of [            ], 2014, between AmSurg Corp., a Tennessee corporation (the “ Company ”), and [                    ] (“ Indemnitee ”).

WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “ Board ”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself. The Second Amended and Restated Charter of the Company (as amended, from time to time, the “ Charter ”) and the Second Amended and Restated Bylaws of the Company (as amended, from time to time, the “ Bylaws ”) require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the Tennessee Business Corporation Act (“ TBCA ”). The Charter, the Bylaws and the TBCA expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers of the Company and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s shareholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the Charter and the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;

WHEREAS, Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity; Indemnitee is willing to serve, continue to serve and take on additional service for or on behalf of the Company on the condition that he be so indemnified.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director or officer from and after the date hereof, the parties hereto agree as follows:

1. Indemnity of Indemnitee . The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings other than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a) ,


Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if (1) Indemnitee’s conduct was in good faith; (2) Indemnitee reasonably believed: (a) in the case of conduct in Indemnitee’s official capacity with the Company, that Indemnitee’s conduct was in the Company’s best interest and (b) in all other cases, that Indemnitee’s conduct was at least not opposed to the Company’s best interest; and (3) in the case of any criminal Proceeding, Indemnitee had no reasonable cause to believe Indemnitee’s conduct was unlawful; provided , however , if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company on the basis that personal benefit was improperly received by Indemnitee.

(b) Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, in connection with such Proceeding if (1) Indemnitee’s conduct was in good faith; (2) Indemnitee reasonably believed: (a) in the case of conduct in Indemnitee’s official capacity with the Company, that Indemnitee’s conduct was in the Company’s best interest and (b) in all other cases, that Indemnitee’s conduct was at least not opposed to the Company’s best interest; and (3) in the case of any criminal Proceeding, Indemnitee had no reasonable cause to believe Indemnitee’s conduct was unlawful; provided , however , if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 1(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity . In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee if a judgment or other final adjudication adverse to Indemnitee establishes Indemnitee’s liability for: (a) any breach of the duty of loyalty to the Company or its shareholders; (b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (c) unlawful distributions.

3. Contribution .

(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not, without the Indemnitee’s prior written consent, enter into any such settlement of any Proceeding (in whole or in part) unless such settlement (i) provides for a full and final release of all claims asserted against Indemnitee and (ii) does not impose any Expense, judgment, fine, penalty or limitation on Indemnitee.

 

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(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided , however , that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding, and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after: (a) the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding and (i) Indemnitee’s affirmation of his good faith belief that he has met the standard of conduct described in § 48-18-502 of the TBCA and (ii) an undertaking by Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses and (b) a determination is made as described in Section 6 that the facts then known to those making the determination would not preclude indemnification under the TBCA. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.

6. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the TBCA and the public policy of the State of Tennessee. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

 

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(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods: (1) by majority vote of a quorum consisting of Disinterested Directors, (2) if a quorum cannot be obtained under subsection (b)(1), by majority vote of a committee duly designated by Disinterested Directors; (3) by Independent Counsel; or (4) by the shareholders, but shares owned by or voted under the control of Indemnitee may not be voted on the determination; provided , however , that if a Change in Control has occurred, the determination with respect to Indemnitee’s entitlement to indemnification shall be made by Independent Counsel.

(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel, the Independent Counsel shall be selected as provided in this Section 6(c) . If a Change in Control has not occurred, the Independent Counsel shall be selected by the majority vote of a quorum of Disinterested Directors (or if a quorum cannot be obtained, majority vote of a committee of Disinterested Directors, even though less than a quorum, or if a quorum of the Disinterested Directors and a committee of Disinterested Directors cannot be obtained, by a majority vote of the full Board), and the Company shall give written notice to the Indemnitee advising him of the identity of the Independent Counsel so selected. Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided , however , that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the Person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If a Change in Control has occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and approved by the Board (which approval shall not be unreasonably withheld). If (i) an Independent Counsel is to make the determination of entitlement pursuant to this Section 6 , and (ii) within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the courts of the State of Tennessee or other court of competent jurisdiction for resolution of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a Person selected by the court or by such other Person as the court shall designate, and the Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.

(d) In making a determination with respect to entitlement to indemnification hereunder, the Person making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this

 

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Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(f) If the Person empowered or selected under this Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided , however , that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the Person making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided , further , that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the shareholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the shareholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of shareholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

(g) Indemnitee shall cooperate with the Person making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such Person upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or shareholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Person making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

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(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Remedies of Indemnitee .

(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Tennessee, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification, contribution or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except as set forth herein, the provisions of Tennessee law (without regard to its conflict-of-law rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial Proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) . In any judicial Proceeding or arbitration commenced pursuant to this Section 7 , Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 6(b) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial Proceeding or arbitration pursuant to this Section 7 , Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 5 until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial Proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading, in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 7 , seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

(e) The Company shall be precluded from asserting in any judicial Proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

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(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation .

(a) The rights of indemnification and to receive advancement of expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of shareholders, a resolution of directors or otherwise, of the Company. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the TBCA, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) The Company shall obtain and maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the directors and officers of the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement. Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such officer or director under such policy or policies. In all such insurance policies, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s directors and officers. At the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

9. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

 

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(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as hereinafter defined), or similar provisions of state statutory law or common law;

(c) for reimbursement to the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company in each case as required under the Exchange Act; or

(d) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Company has joined in or the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iii) the Proceeding is one to enforce Indemnitee’s rights under this Agreement.

10. Non–Disclosure of Payments . Except as expressly required by the securities laws of the United States of America, neither party shall disclose any payments under this Agreement unless prior approval of the other party is obtained. If any payment information must be disclosed, the Company shall afford the Indemnitee an opportunity to review all such disclosures and, if requested, to explain in such statement any mitigating circumstances regarding the events to be reported.

11. Duration of Agreement . All agreements and obligations of the Company contained herein shall continue upon the later of (i) fifteen (15) years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company, and (ii) one (1) year after the final termination of any Proceeding (including any rights of appeal thereto) in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 7 of this Agreement relating thereto (including any rights of appeal of any Section 7 Proceeding). This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

12. Security . To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.

13. Definitions . For purposes of this Agreement:

(a) “ Beneficial Owner ” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided , however , that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the shareholders of the Company approving a merger of the Company with another entity.

(b) “ Board ” means the board of directors of the Company.

(c) “ Change in Control ” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

 

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(i) Acquisition of Stock by Third Party . Any Person (as defined below) is or becomes the Beneficial Owner (as defined above) directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;

(ii) Change in Board of Directors . During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Section 13(b)(i) , 13(b)(iii) or 13(b)(iv) ) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

(iii) Corporate Transactions . The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the Board or other governing body of such surviving entity; and

(iv) Liquidation . The approval by the shareholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, or, if such approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions.

(d) “ Corporate Status ” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company, any direct or indirect subsidiary of the Company, or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

(e) “ Disinterested Director ” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(f) “ Enterprise ” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.

(g) “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

(h) “ Expenses ” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(i) “ Independent Counsel ” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or

 

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Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(j) “ Person ” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided , however , that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(k) “ Proceeding ” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

14. Severability . If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality, and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the fullest extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.

15. Enforcement and Binding Effect .

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.

(b) Without limiting any of the rights of Indemnitee under the Charter or Bylaws, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

(c) The indemnification and advancement of expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

 

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(d) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

(e) The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the court, and the Company hereby waives any such requirement of such a bond or undertaking.

16. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17. Notice By Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

18. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:

(a) To Indemnitee at the address set forth below Indemnitee’s signature hereto.

(b) To the Company at:

AmSurg Corp.

20 Burton Hills Boulevard

Nashville, Tennessee

Attention: General Counsel

Fax: (615) 665-0755

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

19. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

20. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

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21. Usage of Pronouns . Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

22. Governing Law and Consent to Jurisdiction . This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Tennessee, without regard to its conflict-of-laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any Proceeding arising out of or in connection with this Agreement shall be brought only in the courts of the State of Tennessee (the “ Tennessee Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) generally and unconditionally consent to submit to the exclusive jurisdiction of the Tennessee Court for purposes of any Proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such Proceeding in the Tennessee Court, and (iv) waive, and agree not to plead or to make, any claim that any such Proceeding brought in the Tennessee Court has been brought in an improper or inconvenient forum. The foregoing consent to jurisdiction shall not constitute general consent to service of process in the state for any purpose except as provided above, and shall not be deemed to confer rights on any Person other than the parties to this Agreement.

23. MUTUAL WAIVER OF JURY TRIAL . BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH PARTY TO THIS AGREEMENT (INCLUDING THE COMPANY) HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES TO THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES HEREUNDER.

24. Further Action . The parties shall execute and deliver all documents, provide all information, and take or refrain from taking such actions as may be necessary or appropriate to achieve the purposes of this Agreement.

[T HE R EMAINDER OF T HIS P AGE I S I NTENTIONALLY L EFT B LANK .]

 

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IN WITNESS WHEREOF , the parties hereto have executed this Agreement on and as of the day and year first written above.

 

AMSURG CORP.
By:    
Name: Christopher A. Holden
Title: Chief Executive Officer
INDEMNITEE
By:    
Name:                                                                                             
Address:                                                                                         
 

 

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Exhibit 10.2

THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), entered into this 30th day of January, 2014, by and between AmSurg Corp., a Tennessee corporation with its principal place of business at 20 Burton Hills Boulevard, Nashville, Tennessee 37215 (“Company”), and Claire M. Gulmi (“Officer”), hereby amends and replaces in its entirety that certain Second Amended and Restated Employment Agreement, dated January 30, 2009, between the Company and Officer.

W I T N E S S E T H :

1. EMPLOYMENT . The Company employs Officer and Officer hereby accepts employment under the terms and conditions hereinafter set forth.

2. DUTIES . Officer is engaged as Executive Vice President and Chief Financial Officer of the Company. Her powers and duties in that capacity shall be those normally associated with the position of Executive Vice President and Chief Financial Officer. During the term of this Agreement, Officer shall also serve without additional compensation in such other offices of the Company and its subsidiaries to which she may be elected or appointed by the Board of Directors.

3. TERM . Subject to provisions of termination as hereinafter provided, the initial term of Officer’s employment under this Agreement shall terminate on December 31, 2014. On each December 31 during the term of this Agreement, commencing on December 31, 2014, unless the Company notifies Officer, pursuant to the following paragraph, that her employment under this Agreement will not be extended, her employment under this Agreement shall automatically be extended for a one (1) year period on the same terms and conditions as are set forth herein.

If the Company elects not to extend Officer’s employment under this Agreement, it shall do so by notifying Officer in writing not less than sixty (60) days prior to the applicable December 31 of this Agreement. If the Company does not elect to extend Officer’s employment under this Agreement other than for Cause (as hereinafter defined), Officer shall be considered to have been terminated without Cause upon the expiration of her employment, and Officer will receive the payments and benefits set forth in Section 8 hereof.

4. COMPENSATION .

 

  a. For all duties rendered by Officer, the Company shall pay Officer a minimum salary of $459,680 per year, payable in equal semi-monthly installments. In addition thereto, each year, beginning January 1, 2014, Officer’s compensation will be reviewed by the Board of Directors of the Company, or the Compensation Committee thereof, and after taking into consideration performance and any other factors deemed relevant, the Committee may increase Officer’s salary. Officer will be eligible to receive an annual bonus on the terms and conditions approved by the Compensation Committee of the Company’s Board of Directors. Officer shall also be eligible to receive equity incentive awards as approved from time to time by the Compensation Committee of the Company’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 Officer in the performance of her duties under this Agreement (or shall reimburse Officer on account of such expenses paid directly by Officer) 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 Officer’s taxable year following the taxable year in which the expense is incurred by Officer); provided, however, that upon Officer’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 Officer for such expenses after the later of a. the first anniversary of the date of Officer’s death or b. December 31 of the calendar year following the year of the Officer’s termination of employment with the Company (other than by reason of Officer’s death).

 

  d. Officer shall be eligible to receive such equity incentive awards under the Company’s equity incentive plans as may be approved from time to time by the Compensation Committee of the Board of Directors of the Company. Any such awards shall be subject to such vesting and other terms and conditions as shall be approved by the Compensation Committee of the Board of Directors of the Company. Any such awards that are subject solely to time-based vesting restrictions (including any such awards outstanding as of the date of this Agreement) shall automatically vest upon the termination of employment of Officer as a result of (i) the death of Officer, (ii) the Disability of Officer (as defined in Section 6), (iii) the termination of employment by Officer for Good Reason (as defined in Section 21), and (iv) the termination of employment by the Company without Cause (as defined in Section 7); provided, that the vesting of such awards shall not accelerate upon the termination of Officer as a result of the termination of employment by the Company without Cause (as defined in Section 7) if such termination without Cause by the Company is a Performance Termination (as defined in Section 21).

5. EXTENT OF SERVICE . Officer shall devote substantially her entire time, attention and energies to the business of the Company and shall not during the term of this Agreement take an active role in any other business activity without the prior written consent of the Company; but this shall not prevent Officer from making real estate or other investments of a

 

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passive nature or devoting time to charitable and non-profit activities and service as a director on the board(s) of directors of companies (whether public or private) other than the Company, in each case, in accordance with the Company’s Corporate Governance Guidelines and in a manner that does not interfere with the performance of her duties to the Company.

6. DISABILITY . In the event Officer shall become disabled as defined in Treasury Regulation 1.409(A)-3(i)(4) (“Disability”), the Company shall provide the following payments and benefits:

 

  a. The Accrued Rights (as defined in Section 7(a) below);

 

  b. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the Disability Payment Date (as defined below) occurs, based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the Disability Payment Date, payable to Officer pursuant to Section 4(a) had Officer’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 adopted by the Company; and

 

  c. Through insurance or on its own account coverage for Officer that will provide payment of Officer’s full salary and benefits for twelve (12) months, with (i) the payment of Officer’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 Officer’s salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the Company shall provide such coverage to Officer as is then available to Officer 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.

The date on which it is determined that Officer is Disabled is referred to herein as the “Disability Payment Date.”

 

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7. TERMINATION FOR CAUSE .

 

  a. The Company may terminate Officer’s employment for Cause, without any further liability hereunder to Officer, except that Officer 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 Officer is entitled to reimbursement in accordance with Section 4(g) , and (iii) benefits to which the Officer 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 Officer’s employment based upon the following grounds (i) a felony conviction of Officer or the failure of Officer to contest prosecution for a felony, (ii) conviction of a crime involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Officer in the performance of her duties as an officer after written notice from the Company that reasonably identifies the manner in which the Company believes that she has committed gross negligence or willful misconduct and the failure by Officer 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 the Company. In making such determination, the Board of Directors of the Company shall not act unreasonably or arbitrarily and no act or omission by Officer shall be deemed willful if taken by Officer 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 Officer’s employment for Cause, Officer shall have the opportunity, together with her counsel, to be heard before the Board of Directors.

8. TERMINATION WITHOUT CAUSE OR FOR GOOD REASON . Officer’s employment under this Agreement may be terminated by the Company at any time without Cause or by the Officer for Good Reason (as defined in Section 21 ). Except as provided in Section 9 below, in the event Officer’s employment under this Agreement is terminated by the Company without Cause or by the Officer for Good Reason, the Company shall pay Officer the following payments and benefits:

 

  a. The Accrued Rights;

 

  b. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  c. Officer shall also continue to be covered under health and life insurance plans of the Company for twenty-four (24) 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;

 

4


  d. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company;

Benefits due under Section 8(a)-(c)  shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of the payment and other benefits under this Section 8 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

9. TERMINATION FOLLOWING A CHANGE IN CONTROL . In the event Officer’s employment under this Agreement is terminated by the Company without Cause within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein) or by Officer for Good Reason within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein), the Company shall pay Officer the following payments and benefits:

 

  a. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  b. Officer shall also continue to be covered under health and life insurance plans of the Company for two years (2) years, 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

 

5


  c. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company.

Benefits due under this Section 9 shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of any payment or other benefits under this Section 9 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

10. TERMINATION BY OFFICER WITHOUT GOOD REASON . Officer may terminate her employment under this Agreement at any time other than for Good Reason (as defined in Section 21 herein) upon the provision of sixty (60) days prior written notice to the Company. In such event, the Company shall pay Officer the Accrued Rights, and officer shall not be entitled to any other benefits under this Agreement following the date of termination of this employment with the Company. In the event Officer gives notice of her intent to terminate her employment other than for Good Reason, the Company may elect to waive the period of notice or any portion thereof and accept Officer’s resignation prior to the end of the notice period.

11. COORDINATION WITH RELEASE . Notwithstanding any provision herein to the contrary, the provisions of this Section 11 shall apply to the payment of benefits under Sections 8 and 9 (the “Severance Payments”). The Severance Payments shall be made only if Officer shall have executed, on or prior to the Release Expiration Date (as defined below), a General Release in form and substance reasonably acceptable to the Company and Officer (the “Release”) and any waiting periods contained in the Release shall have expired. In any instance where the execution of a Release is required, the Company shall deliver the Release to the Officer within eight (8) days following the date of the Officer’s Separation from Service. If Officer fails to execute and deliver the Release on or prior to the Release Expiration Date or timely revokes Officer’s acceptance of the Release thereafter, Officer shall not be entitled to any Severance Payments. The Severance Payments shall be made immediately upon the expiration of any waiting periods contained in the Release, or if no waiting periods are applicable, within

 

6


two (2) business days following Officer’s execution and delivery of the Release to the Company; provided, however, notwithstanding anything herein to the contrary, in any case where the date the Separation from Service and the Release Expiration Date fall in two separate taxable years, any Severance Payments that are treated as deferred compensation for purposes of Section 409A of the Code shall be made in the later taxable year. For purposes of this Section 11 , the “Release Expiration Date” shall mean the later of (i) the date of the Officer’s Separation from Service, and (ii) the date that is twenty-one (21) days following the date on which the Company timely delivers a Release to the Officer for the Officer’s execution, or in the event that the Officer’s Separation from Service is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date.

12. RESTRICTIVE COVENANTS .

 

  a. Confidential Information . Officer agrees not to disclose, either during the time he is employed by the Company or following the termination of her employment at the Company, any confidential information concerning the Company, 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 two (2) years following the date of the termination of Officer’s employment with the Company other than in the event of a termination by the Officer for Good Reason, Officer agrees that he will not, either as an individual for her own account, as a partner or joint venturer, or as an employee, agent, officer, 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, or

 

  (ii) any other line of business in which the Company is engaged on the date of termination of Officer’s employment with the Company (for purposes of clarification, 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),

in the case of each of (i) and (ii) above in any state within the United States or in any foreign country or territory in which the Company or any of its subsidiaries conducts business as of the date of termination of Officer’s employment with the Company. The Company and Officer acknowledge and agree that the provisions of this Section 12(b) shall not restrict Officer from accepting employment or otherwise being involved with a business (such as a company that owns or operates hospitals or

 

7


health systems) other than United Surgical Partners International, Inc. and Surgical Care Affiliates, Inc. and their respective affiliates that has a unit, division, segment or subsidiary that competes with the Company as described above in this Section 12(b) so long as Officer does not directly participate in the management of the unit, division, segment or subsidiary that competes with the business of the Company as described in subsections (i) and (ii) above.

 

  c. Non-Solicitation . Upon termination or expiration of her employment, whether voluntary or involuntary, Officer agrees not to directly or indirectly solicit business of the type described in Sections 12(b)(i) and 12(b)(ii) 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 Officer knew or had reason to know that the Company was soliciting or going to solicit business at the time of Officer’s termination, for a two-year-year period from the date of Officer’s termination of her employment with the Company.

 

  d. Enforcement . Officer 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.

 

  e. Termination . Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this Section 12 shall not terminate upon Officer’s termination of her employment with the Company or upon the termination of this Agreement under any other provision of this Agreement.

13. VACATION . During each year of this Agreement, Officer shall be entitled to not less than twenty five (25) paid vacation days per year, which shall accrue monthly.

14. BENEFITS . In addition to the benefits specifically provided for herein, Officer shall be entitled to participate in all benefit plans maintained by the Company for employees generally according to the terms of such plans.

15. NOTICES . Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, and if sent by registered or certified mail to her residence in the case of Officer, or to its principal office in the case of the Company.

16. WAIVER OF BREACH . The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

17. ATTORNEYS’ FEES . In the event that either party initiates legal proceedings to enforce any provision of this Agreement or resolve any dispute hereunder, and Officer is the prevailing party, then the Company shall be responsible for payment of the Officer’s reasonable attorneys’ fees incurred in connection therewith.

 

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18. ASSIGNMENT . The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. The Officer acknowledges that the services to be rendered by her are unique and personal, and the Officer may not assign any of her rights or delegate any of her duties or obligations under this Agreement.

19. ENTIRE AGREEMENT . This instrument contains the entire agreement of the parties with respect to the matters addressed herein. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. This Agreement shall be governed by the laws of the State of Tennessee.

20. HEADINGS . The sections, subjects and headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

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 the Company by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act);

 

  (ii) the merger or consolidation of the Company with or into another corporation or other entity, or any share exchange or similar transaction involving the Company 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 the Company 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 the Company; or

 

  (iv) any change in the composition of the Board of Directors of the Company, 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 the Company, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of the Company at the end of such period.

 

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  b. “Company” shall mean AmSurg Corp., 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 Officer’s authority and responsibilities;

(ii) there is a material diminution in Officer’s rate of base salary or overall compensation (for reasons other than Company performance or stock price);

(iii) the Company changes the principal location in which Officer is required to perform services outside a twenty (20) mile radius of such location without Officer’s consent; or

(iv) the Company engages in any other action or inaction that constitutes a material breach of this Agreement by the Company.

A termination under the circumstances listed above shall be for “Good Reason” only if (A) Officer notifies the Company of the existence of the condition that otherwise constitutes Good Reason within ninety (90) days of the initial existence of the condition, (B) the Company fails to remedy the condition within forty-five (45) days following its receipt of Officer’s notice of Good Reason and (C) the Officer Separates from Service from the Company due to the condition within twelve (12) months of the initial existence of such condition.

 

  d. “Separation from Service” shall mean the date on which the Company and Officer reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Officer 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-1(h) of the U.S. Treasury Regulations.

 

  e.

“Performance Termination” shall mean the termination of Officer’s employment by the Company without Cause (as defined in Section 7) following the failure of 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 the Company (as such measure may

 

10


  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 the Company has failed to achieve any such budget measure for a fiscal year shall be based upon the Company’s audited financial statements for such fiscal year. In making a determination whether 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 the Company operates, and adverse weather incidents or other acts of God that are not within the control of the Company. In the event the Board of Directors determines that the Company has failed to achieve such budget measure in any fiscal year, the Board will give the Officer written notice of such fact within five (5) business days following the filing of the Annual Report on Form 10-K for the Company for such fiscal year. In the event the Board of Directors determines to terminate Officer’s employment without Cause pursuant to a Performance Termination, the Board must give Officer notice of such termination before the later of (i) 180 days after the end of the second fiscal year end of the Company in which the Company failed to meet such budget measures and (ii) the date of the annual meeting of the Company’s shareholders following the end of the second fiscal year of the Company in which the Company failed to meet such budget measures

22. DELAY OF PAYMENTS . It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Officer’s employment with the Company terminates or at such other time that the Company determines to be relevant, Officer is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Officer pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of Officer’s Separation from Service with the Company, or, if earlier, the date of the Officer’s death. Any payments delayed pursuant to this Section 22 shall be made in a lump sum on the first day of the seventh month following Officer’s Separation from Service, or, if earlier, the date of the Officer’s death (the “Section 409A Payment Date”). In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Officer participates during the term of the Officer’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other

 

11


calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) such right to reimbursement or payment shall not be subject to liquidation or exchange for another benefit.

23. HEALTH BENEFITS . The costs of the Company’s portion of any post termination health or life insurance premiums due under this Agreement shall be included in the Officer’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Code.

24. DEEMED RESIGNATION . In the event Officer’s employment under this Agreement is terminated for any reason, unless otherwise determined by the Board of Directors of the Company, Officer shall be deemed, without any further action on the part of Officer, to have automatically resigned as a director of the Company and as an officer and director, if applicable, of all subsidiaries of the Company.

25. SECTION 280G 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 280G 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

 

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  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 Officer is liable for the Excise Tax as a result of the receipt of such Payments or Reduced Amount, as applicable, then Officer 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 Officer’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, Officer shall pay the Excise Tax.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.

 

/s/ Claire M. Gulmi
Claire M. Gulmi
AMSURG CORP.
/s/ Christopher A. Holden
Name: Christopher A. Holden
Title: Chief Executive Officer

 

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Exhibit 10.3

THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), entered into this 30 th day of January, 2014, by and between AmSurg Corp., a Tennessee corporation with its principal place of business at 20 Burton Hills Boulevard, Nashville, Tennessee 37215 (“Company”), and David L. Manning (“Officer”), hereby amends and replaces in its entirety that certain Second Amended and Restated Employment Agreement, dated January 30, 2009, between the Company and Officer.

W I T N E S S E T H :

1. EMPLOYMENT . The Company employs Officer and Officer hereby accepts employment under the terms and conditions hereinafter set forth.

2. DUTIES . Officer is engaged as Executive Vice President and Chief Development Officer of the Company. His powers and duties in that capacity shall be those normally associated with the position of Executive Vice President and Chief Development Officer. During the term of this Agreement, Officer shall also serve without additional compensation in such other offices of the Company and its subsidiaries to which he may be elected or appointed by the Board of Directors.

3. TERM . Subject to provisions of termination as hereinafter provided, the initial term of Officer’s employment under this Agreement shall terminate on December 31, 2014. On each December 31 during the term of this Agreement, commencing on December 31, 2014, unless the Company notifies Officer, pursuant to the following paragraph, that his employment under this Agreement will not be extended, his employment under this Agreement shall automatically be extended for a one (1) year period on the same terms and conditions as are set forth herein.

If the Company elects not to extend Officer’s employment under this Agreement, it shall do so by notifying Officer in writing not less than sixty (60) days prior to the applicable December 31 of this Agreement. If the Company does not elect to extend Officer’s employment under this Agreement other than for Cause (as hereinafter defined), Officer shall be considered to have been terminated without Cause upon the expiration of his employment, and Officer will receive the payments and benefits set forth in Section 8 hereof.

4. COMPENSATION .

 

  a. For all duties rendered by Officer, the Company shall pay Officer a minimum salary of $457,470 per year, payable in equal semi-monthly installments. In addition thereto, each year, beginning January 1, 2014, Officer’s compensation will be reviewed by the Board of Directors of the Company, or the Compensation Committee thereof, and after taking into consideration performance and any other factors deemed relevant, the Committee may increase Officer’s salary. Officer will be eligible to receive an annual bonus on the terms and conditions approved by the Compensation Committee of the Company’s Board of Directors. Officer shall also be eligible to receive equity incentive awards as approved from time to time by the Compensation Committee of the Company’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 Officer in the performance of his duties under this Agreement (or shall reimburse Officer on account of such expenses paid directly by Officer) 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 Officer’s taxable year following the taxable year in which the expense is incurred by Officer); provided, however, that upon Officer’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 Officer for such expenses after the later of a. the first anniversary of the date of Officer’s death or b. December 31 of the calendar year following the year of the Officer’s termination of employment with the Company (other than by reason of Officer’s death).

 

  d. Officer shall be eligible to receive such equity incentive awards under the Company’s equity incentive plans as may be approved from time to time by the Compensation Committee of the Board of Directors of the Company. Any such awards shall be subject to such vesting and other terms and conditions as shall be approved by the Compensation Committee of the Board of Directors of the Company. Any such awards that are subject solely to time-based vesting restrictions (including any such awards outstanding as of the date of this Agreement) shall automatically vest upon the termination of employment of Officer as a result of (i) the death of Officer, (ii) the Disability of Officer (as defined in Section 6), (iii) the termination of employment by Officer for Good Reason (as defined in Section 21), and (iv) the termination of employment by the Company without Cause (as defined in Section 7); provided, that the vesting of such awards shall not accelerate upon the termination of Officer as a result of the termination of employment by the Company without Cause (as defined in Section 7) if such termination without Cause by the Company is a Performance Termination (as defined in Section 21).

5. EXTENT OF SERVICE . Officer shall devote substantially his entire time, attention and energies to the business of the Company and shall not during the term of this Agreement take an active role in any other business activity without the prior written consent of the Company; but this shall not prevent Officer from making real estate or other investments of a

 

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passive nature or devoting time to charitable and non-profit activities and service as a director on the board(s) of directors of companies (whether public or private) other than the Company, in each case, in accordance with the Company’s Corporate Governance Guidelines and in a manner that does not interfere with the performance of his duties to the Company.

6. DISABILITY . In the event Officer shall become disabled as defined in Treasury Regulation 1.409(A)-3(i)(4) (“Disability”), the Company shall provide the following payments and benefits:

 

  a. The Accrued Rights (as defined in Section 7(a) below);

 

  b. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the Disability Payment Date (as defined below) occurs, based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the Disability Payment Date, payable to Officer pursuant to Section 4(a) had Officer’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 adopted by the Company; and

 

  c. Through insurance or on its own account coverage for Officer that will provide payment of Officer’s full salary and benefits for twelve (12) months, with (i) the payment of Officer’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 Officer’s salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the Company shall provide such coverage to Officer as is then available to Officer 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.

The date on which it is determined that Officer is Disabled is referred to herein as the “Disability Payment Date.”

 

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7. TERMINATION FOR CAUSE .

 

  a. The Company may terminate Officer’s employment for Cause, without any further liability hereunder to Officer, except that Officer 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 Officer is entitled to reimbursement in accordance with Section 4(g) , and (iii) benefits to which the Officer 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 Officer’s employment based upon the following grounds (i) a felony conviction of Officer or the failure of Officer to contest prosecution for a felony, (ii) conviction of a crime involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Officer in the performance of his duties as an officer 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 Officer 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 the Company. In making such determination, the Board of Directors of the Company shall not act unreasonably or arbitrarily and no act or omission by Officer shall be deemed willful if taken by Officer 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 Officer’s employment for Cause, Officer shall have the opportunity, together with his counsel, to be heard before the Board of Directors.

8. TERMINATION WITHOUT CAUSE OR FOR GOOD REASON . Officer’s employment under this Agreement may be terminated by the Company at any time without Cause or by the Officer for Good Reason (as defined in Section 21 ). Except as provided in Section 9 below, in the event Officer’s employment under this Agreement is terminated by the Company without Cause or by the Officer for Good Reason, the Company shall pay Officer the following payments and benefits:

 

  a. The Accrued Rights;

 

  b. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  c. Officer shall also continue to be covered under health and life insurance plans of the Company for twenty-four (24) 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;

 

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  d. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company;

Benefits due under Section 8(a)-(c)  shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of the payment and other benefits under this Section 8 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

9. TERMINATION FOLLOWING A CHANGE IN CONTROL . In the event Officer’s employment under this Agreement is terminated by the Company without Cause within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein) or by Officer for Good Reason within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein), the Company shall pay Officer the following payments and benefits:

 

  a. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  b. Officer shall also continue to be covered under health and life insurance plans of the Company for two years (2) years, 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

 

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  c. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company.

Benefits due under this Section 9 shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of any payment or other benefits under this Section 9 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

10. TERMINATION BY OFFICER WITHOUT GOOD REASON . Officer may terminate his employment under this Agreement at any time other than for Good Reason (as defined in Section 21 herein) upon the provision of sixty (60) days prior written notice to the Company. In such event, the Company shall pay Officer the Accrued Rights, and officer shall not be entitled to any other benefits under this Agreement following the date of termination of this employment with the Company. In the event Officer gives notice of his intent to terminate his employment other than for Good Reason, the Company may elect to waive the period of notice or any portion thereof and accept Officer’s resignation prior to the end of the notice period.

11. COORDINATION WITH RELEASE . Notwithstanding any provision herein to the contrary, the provisions of this Section 11 shall apply to the payment of benefits under Sections 8 and 9 (the “Severance Payments”). The Severance Payments shall be made only if Officer shall have executed, on or prior to the Release Expiration Date (as defined below), a General Release in form and substance reasonably acceptable to the Company and Officer (the “Release”) and any waiting periods contained in the Release shall have expired. In any instance where the execution of a Release is required, the Company shall deliver the Release to the Officer within eight (8) days following the date of the Officer’s Separation from Service. If Officer fails to execute and deliver the Release on or prior to the Release Expiration Date or timely revokes Officer’s acceptance of the Release thereafter, Officer shall not be entitled to any Severance Payments. The Severance Payments shall be made immediately upon the expiration of any waiting periods contained in the Release, or if no waiting periods are applicable, within

 

6


two (2) business days following Officer’s execution and delivery of the Release to the Company; provided, however, notwithstanding anything herein to the contrary, in any case where the date the Separation from Service and the Release Expiration Date fall in two separate taxable years, any Severance Payments that are treated as deferred compensation for purposes of Section 409A of the Code shall be made in the later taxable year. For purposes of this Section 11 , the “Release Expiration Date” shall mean the later of (i) the date of the Officer’s Separation from Service, and (ii) the date that is twenty-one (21) days following the date on which the Company timely delivers a Release to the Officer for the Officer’s execution, or in the event that the Officer’s Separation from Service is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date.

12. RESTRICTIVE COVENANTS .

 

  a. Confidential Information . Officer 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, 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 two (2) years following the date of the termination of Officer’s employment with the Company other than in the event of a termination by the Officer for Good Reason, Officer agrees that he will not, either as an individual for his own account, as a partner or joint venturer, or as an employee, agent, officer, 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, or

 

  (ii) any other line of business in which the Company is engaged on the date of termination of Officer’s employment with the Company (for purposes of clarification, 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),

in the case of each of (i) and (ii) above in any state within the United States or in any foreign country or territory in which the Company or any of its subsidiaries conducts business as of the date of termination of Officer’s employment with the Company. The Company and Officer acknowledge and agree that the provisions of this Section 12(b) shall not restrict Officer from accepting employment or otherwise being involved with a business (such as a company that owns or operates hospitals or

 

7


health systems) other than United Surgical Partners International, Inc. and Surgical Care Affiliates, Inc. and their respective affiliates that has a unit, division, segment or subsidiary that competes with the Company as described above in this Section 12(b) so long as Officer does not directly participate in the management of the unit, division, segment or subsidiary that competes with the business of the Company as described in subsections (i) and (ii) above.

 

  c. Non-Solicitation . Upon termination or expiration of his employment, whether voluntary or involuntary, Officer agrees not to directly or indirectly solicit business of the type described in Sections 12(b)(i) and 12(b)(ii) 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 Officer knew or had reason to know that the Company was soliciting or going to solicit business at the time of Officer’s termination, for a two-year-year period from the date of Officer’s termination of his employment with the Company.

 

  d. Enforcement . Officer 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.

 

  e. Termination . Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this Section 12 shall not terminate upon Officer’s termination of his employment with the Company or upon the termination of this Agreement under any other provision of this Agreement.

13. VACATION . During each year of this Agreement, Officer shall be entitled to not less than twenty five (25) paid vacation days per year, which shall accrue monthly.

14. BENEFITS . In addition to the benefits specifically provided for herein, Officer shall be entitled to participate in all benefit plans maintained by the Company for employees generally according to the terms of such plans.

15. NOTICES . Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, and if sent by registered or certified mail to his residence in the case of Officer, or to its principal office in the case of the Company.

16. WAIVER OF BREACH . The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

17. ATTORNEYS’ FEES . In the event that either party initiates legal proceedings to enforce any provision of this Agreement or resolve any dispute hereunder, and Officer is the prevailing party, then the Company shall be responsible for payment of the Officer’s reasonable attorneys’ fees incurred in connection therewith.

 

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18. ASSIGNMENT . The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. The Officer acknowledges that the services to be rendered by him are unique and personal, and the Officer may not assign any of his rights or delegate any of his duties or obligations under this Agreement.

19. ENTIRE AGREEMENT . This instrument contains the entire agreement of the parties with respect to the matters addressed herein. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. This Agreement shall be governed by the laws of the State of Tennessee.

20. HEADINGS . The sections, subjects and headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

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 the Company by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act);

 

  (ii) the merger or consolidation of the Company with or into another corporation or other entity, or any share exchange or similar transaction involving the Company 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 the Company 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 the Company; or

 

  (iv) any change in the composition of the Board of Directors of the Company, 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 the Company, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of the Company at the end of such period.

 

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  b. “Company” shall mean AmSurg Corp., 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 Officer’s authority and responsibilities;

(ii) there is a material diminution in Officer’s rate of base salary or overall compensation (for reasons other than Company performance or stock price);

(iii) the Company changes the principal location in which Officer is required to perform services outside a twenty (20) mile radius of such location without Officer’s consent; or

(iv) the Company engages in any other action or inaction that constitutes a material breach of this Agreement by the Company.

A termination under the circumstances listed above shall be for “Good Reason” only if (A) Officer notifies the Company of the existence of the condition that otherwise constitutes Good Reason within ninety (90) days of the initial existence of the condition, (B) the Company fails to remedy the condition within forty-five (45) days following its receipt of Officer’s notice of Good Reason and (C) the Officer Separates from Service from the Company due to the condition within twelve (12) months of the initial existence of such condition.

 

  d. “Separation from Service” shall mean the date on which the Company and Officer reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Officer 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-1(h) of the U.S. Treasury Regulations.

 

  e.

“Performance Termination” shall mean the termination of Officer’s employment by the Company without Cause (as defined in Section 7) following the failure of 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 the Company (as such measure may

 

10


  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 the Company has failed to achieve any such budget measure for a fiscal year shall be based upon the Company’s audited financial statements for such fiscal year. In making a determination whether 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 the Company operates, and adverse weather incidents or other acts of God that are not within the control of the Company. In the event the Board of Directors determines that the Company has failed to achieve such budget measure in any fiscal year, the Board will give the Officer written notice of such fact within five (5) business days following the filing of the Annual Report on Form 10-K for the Company for such fiscal year. In the event the Board of Directors determines to terminate Officer’s employment without Cause pursuant to a Performance Termination, the Board must give Officer notice of such termination before the later of (i) 180 days after the end of the second fiscal year end of the Company in which the Company failed to meet such budget measures and (ii) the date of the annual meeting of the Company’s shareholders following the end of the second fiscal year of the Company in which the Company failed to meet such budget measures.

22. DELAY OF PAYMENTS . It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Officer’s employment with the Company terminates or at such other time that the Company determines to be relevant, Officer is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Officer pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of Officer’s Separation from Service with the Company, or, if earlier, the date of the Officer’s death. Any payments delayed pursuant to this Section 22 shall be made in a lump sum on the first day of the seventh month following Officer’s Separation from Service, or, if earlier, the date of the Officer’s death (the “Section 409A Payment Date”). In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Officer participates during the term of the Officer’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other

 

11


calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) such right to reimbursement or payment shall not be subject to liquidation or exchange for another benefit.

23. HEALTH BENEFITS . The costs of the Company’s portion of any post termination health or life insurance premiums due under this Agreement shall be included in the Officer’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Code.

24. DEEMED RESIGNATION . In the event Officer’s employment under this Agreement is terminated for any reason, unless otherwise determined by the Board of Directors of the Company, Officer shall be deemed, without any further action on the part of Officer, to have automatically resigned as a director of the Company and as an officer and director, if applicable, of all subsidiaries of the Company.

25. SECTION 280G 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 280G 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

 

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  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 Officer is liable for the Excise Tax as a result of the receipt of such Payments or Reduced Amount, as applicable, then Officer 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 Officer’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, Officer shall pay the Excise Tax.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.

 

/s/ David L. Manning
David L. Manning
AMSURG CORP.
/s/ Christopher A. Holden
Name: Christopher A. Holden
Title: Chief Executive Officer

 

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Exhibit 10.4

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), entered into this 30 th day of January, 2014, by and between AmSurg Corp., a Tennessee corporation with its principal place of business at 20 Burton Hills Boulevard, Nashville, Tennessee 37215 (“Company”), and Phillip A. Clendenin (“Officer”), hereby amends and replaces in its entirety that certain Employment Agreement, dated March 23, 2009, between the Company and Officer.

W I T N E S S E T H :

1. EMPLOYMENT . The Company employs Officer and Officer hereby accepts employment under the terms and conditions hereinafter set forth.

2. DUTIES . Officer is engaged as Executive Vice President—Operations of the Company. His powers and duties in that capacity shall be those normally associated with the position of Executive Vice President—Operations. During the term of this Agreement, Officer shall also serve without additional compensation in such other offices of the Company and its subsidiaries to which he may be elected or appointed by the Board of Directors.

3. TERM . Subject to provisions of termination as hereinafter provided, the initial term of Officer’s employment under this Agreement shall terminate on December 31, 2014. On each December 31 during the term of this Agreement, commencing on December 31, 2014, unless the Company notifies Officer, pursuant to the following paragraph, that his employment under this Agreement will not be extended, his employment under this Agreement shall automatically be extended for a one (1) year period on the same terms and conditions as are set forth herein.

If the Company elects not to extend Officer’s employment under this Agreement, it shall do so by notifying Officer in writing not less than sixty (60) days prior to the applicable December 31 of this Agreement. If the Company does not elect to extend Officer’s employment under this Agreement other than for Cause (as hereinafter defined), Officer shall be considered to have been terminated without Cause upon the expiration of his employment, and Officer will receive the payments and benefits set forth in Section 8 hereof.

4. COMPENSATION .

 

  a. For all duties rendered by Officer, the Company shall pay Officer a minimum salary of $362,250 per year, payable in equal semi-monthly installments. In addition thereto, each year, beginning January 1, 2014, Officer’s compensation will be reviewed by the Board of Directors of the Company, or the Compensation Committee thereof, and after taking into consideration performance and any other factors deemed relevant, the Committee may increase Officer’s salary. Officer will be eligible to receive an annual bonus on the terms and conditions approved by the Compensation Committee of the Company’s Board of Directors. Officer shall also be eligible to receive equity incentive awards as approved from time to time by the Compensation Committee of the Company’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 Officer in the performance of his duties under this Agreement (or shall reimburse Officer on account of such expenses paid directly by Officer) 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 Officer’s taxable year following the taxable year in which the expense is incurred by Officer); provided, however, that upon Officer’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 Officer for such expenses after the later of a. the first anniversary of the date of Officer’s death or b. December 31 of the calendar year following the year of the Officer’s termination of employment with the Company (other than by reason of Officer’s death).

 

  d. Officer shall be eligible to receive such equity incentive awards under the Company’s equity incentive plans as may be approved from time to time by the Compensation Committee of the Board of Directors of the Company. Any such awards shall be subject to such vesting and other terms and conditions as shall be approved by the Compensation Committee of the Board of Directors of the Company. Any such awards that are subject solely to time-based vesting restrictions (including any such awards outstanding as of the date of this Agreement) shall automatically vest upon the termination of employment of Officer as a result of (i) the death of Officer, (ii) the Disability of Officer (as defined in Section 6), (iii) the termination of employment by Officer for Good Reason (as defined in Section 21), and (iv) the termination of employment by the Company without Cause (as defined in Section 7); provided, that the vesting of such awards shall not accelerate upon the termination of Officer as a result of the termination of employment by the Company without Cause (as defined in Section 7) if such termination without Cause by the Company is a Performance Termination (as defined in Section 21).

5. EXTENT OF SERVICE . Officer shall devote substantially his entire time, attention and energies to the business of the Company and shall not during the term of this Agreement take an active role in any other business activity without the prior written consent of the Company; but this shall not prevent Officer from making real estate or other investments of a

 

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passive nature or devoting time to charitable and non-profit activities and service as a director on the board(s) of directors of companies (whether public or private) other than the Company, in each case, in accordance with the Company’s Corporate Governance Guidelines and in a manner that does not interfere with the performance of his duties to the Company.

6. DISABILITY . In the event Officer shall become disabled as defined in Treasury Regulation 1.409(A)-3(i)(4) (“Disability”), the Company shall provide the following payments and benefits:

 

  a. The Accrued Rights (as defined in Section 7(a) below);

 

  b. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the Disability Payment Date (as defined below) occurs, based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the Disability Payment Date, payable to Officer pursuant to Section 4(a) had Officer’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 adopted by the Company; and

 

  c. Through insurance or on its own account coverage for Officer that will provide payment of Officer’s full salary and benefits for twelve (12) months, with (i) the payment of Officer’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 Officer’s salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the Company shall provide such coverage to Officer as is then available to Officer 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.

The date on which it is determined that Officer is Disabled is referred to herein as the “Disability Payment Date.”

 

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7. TERMINATION FOR CAUSE .

 

  a. The Company may terminate Officer’s employment for Cause, without any further liability hereunder to Officer, except that Officer 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 Officer is entitled to reimbursement in accordance with Section 4(g) , and (iii) benefits to which the Officer 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 Officer’s employment based upon the following grounds (i) a felony conviction of Officer or the failure of Officer to contest prosecution for a felony, (ii) conviction of a crime involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Officer in the performance of his duties as an officer 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 Officer 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 the Company. In making such determination, the Board of Directors of the Company shall not act unreasonably or arbitrarily and no act or omission by Officer shall be deemed willful if taken by Officer 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 Officer’s employment for Cause, Officer shall have the opportunity, together with his counsel, to be heard before the Board of Directors.

8. TERMINATION WITHOUT CAUSE OR FOR GOOD REASON . Officer’s employment under this Agreement may be terminated by the Company at any time without Cause or by the Officer for Good Reason (as defined in Section 21 ). Except as provided in Section 9 below, in the event Officer’s employment under this Agreement is terminated by the Company without Cause or by the Officer for Good Reason, the Company shall pay Officer the following payments and benefits:

 

  a. The Accrued Rights;

 

  b. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  c. Officer shall also continue to be covered under health and life insurance plans of the Company for twenty-four (24) 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;

 

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  d. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company;

Benefits due under Section 8(a)-(c)  shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of the payment and other benefits under this Section 8 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

9. TERMINATION FOLLOWING A CHANGE IN CONTROL . In the event Officer’s employment under this Agreement is terminated by the Company without Cause within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein) or by Officer for Good Reason within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein), the Company shall pay Officer the following payments and benefits:

 

  a. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

  b. Officer shall also continue to be covered under health and life insurance plans of the Company for two years (2) years, 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

 

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  c. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company.

Benefits due under this Section 9 shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of any payment or other benefits under this Section 9 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

10. TERMINATION BY OFFICER WITHOUT GOOD REASON . Officer may terminate his employment under this Agreement at any time other than for Good Reason (as defined in Section 21 herein) upon the provision of sixty (60) days prior written notice to the Company. In such event, the Company shall pay Officer the Accrued Rights, and officer shall not be entitled to any other benefits under this Agreement following the date of termination of this employment with the Company. In the event Officer gives notice of his intent to terminate his employment other than for Good Reason, the Company may elect to waive the period of notice or any portion thereof and accept Officer’s resignation prior to the end of the notice period.

11. COORDINATION WITH RELEASE . Notwithstanding any provision herein to the contrary, the provisions of this Section 11 shall apply to the payment of benefits under Sections 8 and 9 (the “Severance Payments”). The Severance Payments shall be made only if Officer shall have executed, on or prior to the Release Expiration Date (as defined below), a General Release in form and substance reasonably acceptable to the Company and Officer (the “Release”) and any waiting periods contained in the Release shall have expired. In any instance where the execution of a Release is required, the Company shall deliver the Release to the Officer within eight (8) days following the date of the Officer’s Separation from Service. If Officer fails to execute and deliver the Release on or prior to the Release Expiration Date or timely revokes Officer’s acceptance of the Release thereafter, Officer shall not be entitled to any Severance Payments. The Severance Payments shall be made immediately upon the expiration of any waiting periods contained in the Release, or if no waiting periods are applicable, within

 

6


two (2) business days following Officer’s execution and delivery of the Release to the Company; provided, however, notwithstanding anything herein to the contrary, in any case where the date the Separation from Service and the Release Expiration Date fall in two separate taxable years, any Severance Payments that are treated as deferred compensation for purposes of Section 409A of the Code shall be made in the later taxable year. For purposes of this Section 11 , the “Release Expiration Date” shall mean the later of (i) the date of the Officer’s Separation from Service, and (ii) the date that is twenty-one (21) days following the date on which the Company timely delivers a Release to the Officer for the Officer’s execution, or in the event that the Officer’s Separation from Service is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date.

12. RESTRICTIVE COVENANTS .

 

  a. Confidential Information . Officer 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, 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 two (2) years following the date of the termination of Officer’s employment with the Company other than in the event of a termination by the Officer for Good Reason, Officer agrees that he will not, either as an individual for his own account, as a partner or joint venturer, or as an employee, agent, officer, 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, or

 

  (ii) any other line of business in which the Company is engaged on the date of termination of Officer’s employment with the Company (for purposes of clarification, 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),

in the case of each of (i) and (ii) above in any state within the United States or in any foreign country or territory in which the Company or any of its subsidiaries conducts business as of the date of termination of Officer’s employment with the Company. The Company and Officer acknowledge and agree that the provisions of this Section 12(b) shall not restrict Officer from accepting employment or otherwise being involved with a business (such as a company that owns or operates hospitals or

 

7


health systems) other than United Surgical Partners International, Inc. and Surgical Care Affiliates, Inc. and their respective affiliates that has a unit, division, segment or subsidiary that competes with the Company as described above in this Section 12(b) so long as Officer does not directly participate in the management of the unit, division, segment or subsidiary that competes with the business of the Company as described in subsections (i) and (ii) above.

 

  c. Non-Solicitation . Upon termination or expiration of his employment, whether voluntary or involuntary, Officer agrees not to directly or indirectly solicit business of the type described in Sections 12(b)(i) and 12(b)(ii) 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 Officer knew or had reason to know that the Company was soliciting or going to solicit business at the time of Officer’s termination, for a two-year-year period from the date of Officer’s termination of his employment with the Company.

 

  d. Enforcement . Officer 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.

 

  e. Termination . Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this Section 12 shall not terminate upon Officer’s termination of his employment with the Company or upon the termination of this Agreement under any other provision of this Agreement.

13. VACATION . During each year of this Agreement, Officer shall be entitled to not less than twenty five (25) paid vacation days per year, which shall accrue monthly.

14. BENEFITS . In addition to the benefits specifically provided for herein, Officer shall be entitled to participate in all benefit plans maintained by the Company for employees generally according to the terms of such plans.

15. NOTICES . Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, and if sent by registered or certified mail to his residence in the case of Officer, or to its principal office in the case of the Company.

16. WAIVER OF BREACH . The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

17. ATTORNEYS’ FEES . In the event that either party initiates legal proceedings to enforce any provision of this Agreement or resolve any dispute hereunder, and Officer is the prevailing party, then the Company shall be responsible for payment of the Officer’s reasonable attorneys’ fees incurred in connection therewith.

 

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18. ASSIGNMENT . The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. The Officer acknowledges that the services to be rendered by him are unique and personal, and the Officer may not assign any of his rights or delegate any of his duties or obligations under this Agreement.

19. ENTIRE AGREEMENT . This instrument contains the entire agreement of the parties with respect to the matters addressed herein. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. This Agreement shall be governed by the laws of the State of Tennessee.

20. HEADINGS . The sections, subjects and headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

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 the Company by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act);

 

  (ii) the merger or consolidation of the Company with or into another corporation or other entity, or any share exchange or similar transaction involving the Company 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 the Company 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 the Company; or

 

  (iv) any change in the composition of the Board of Directors of the Company, 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 the Company, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of the Company at the end of such period.

 

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  b. “Company” shall mean AmSurg Corp., 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 Officer’s authority and responsibilities;

(ii) there is a material diminution in Officer’s rate of base salary or overall compensation (for reasons other than Company performance or stock price);

(iii) the Company changes the principal location in which Officer is required to perform services outside a twenty (20) mile radius of such location without Officer’s consent; or

(iv) the Company engages in any other action or inaction that constitutes a material breach of this Agreement by the Company.

A termination under the circumstances listed above shall be for “Good Reason” only if (A) Officer notifies the Company of the existence of the condition that otherwise constitutes Good Reason within ninety (90) days of the initial existence of the condition, (B) the Company fails to remedy the condition within forty-five (45) days following its receipt of Officer’s notice of Good Reason and (C) the Officer Separates from Service from the Company due to the condition within twelve (12) months of the initial existence of such condition.

 

  d. “Separation from Service” shall mean the date on which the Company and Officer reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Officer 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-1(h) of the U.S. Treasury Regulations.

 

  e.

“Performance Termination” shall mean the termination of Officer’s employment by the Company without Cause (as defined in Section 7) following the failure of 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 the Company (as such measure may

 

10


  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 the Company has failed to achieve any such budget measure for a fiscal year shall be based upon the Company’s audited financial statements for such fiscal year. In making a determination whether 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 the Company operates, and adverse weather incidents or other acts of God that are not within the control of the Company. In the event the Board of Directors determines that the Company has failed to achieve such budget measure in any fiscal year, the Board will give the Officer written notice of such fact within five (5) business days following the filing of the Annual Report on Form 10-K for the Company for such fiscal year. In the event the Board of Directors determines to terminate Officer’s employment without Cause pursuant to a Performance Termination, the Board must give Officer notice of such termination before the later of (i) 180 days after the end of the second fiscal year end of the Company in which the Company failed to meet such budget measures and (ii) the date of the annual meeting of the Company’s shareholders following the end of the second fiscal year of the Company in which the Company failed to meet such budget measures.

22. DELAY OF PAYMENTS . It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Officer’s employment with the Company terminates or at such other time that the Company determines to be relevant, Officer is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Officer pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of Officer’s Separation from Service with the Company, or, if earlier, the date of the Officer’s death. Any payments delayed pursuant to this Section 22 shall be made in a lump sum on the first day of the seventh month following Officer’s Separation from Service, or, if earlier, the date of the Officer’s death (the “Section 409A Payment Date”). In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Officer participates during the term of the Officer’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other

 

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calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) such right to reimbursement or payment shall not be subject to liquidation or exchange for another benefit.

23. HEALTH BENEFITS . The costs of the Company’s portion of any post termination health or life insurance premiums due under this Agreement shall be included in the Officer’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Code.

24. DEEMED RESIGNATION . In the event Officer’s employment under this Agreement is terminated for any reason, unless otherwise determined by the Board of Directors of the Company, Officer shall be deemed, without any further action on the part of Officer, to have automatically resigned as a director of the Company and as an officer and director, if applicable, of all subsidiaries of the Company.

25. SECTION 280G 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 280G 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

 

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  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 Officer is liable for the Excise Tax as a result of the receipt of such Payments or Reduced Amount, as applicable, then Officer 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 Officer’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, Officer shall pay the Excise Tax.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.

 

/s/ Phillip A. Clendenin
Phillip A. Clendenin
AMSURG CORP.
/s/ Christopher A. Holden
Name: Christopher A. Holden
Title: Chief Executive Officer

 

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Exhibit 10.5

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), entered into this 30 th day of January, 2014, by and between AmSurg Corp., a Tennessee corporation with its principal place of business at 20 Burton Hills Boulevard, Nashville, Tennessee 37215 (“Company”), and Kevin D. Eastridge (“Officer”), hereby amends and replaces in its entirety that certain Employment Agreement, dated January 30, 2009, between the Company and Officer.

W I T N E S S E T H :

1. EMPLOYMENT . The Company employs Officer and Officer hereby accepts employment under the terms and conditions hereinafter set forth.

2. DUTIES . Officer is engaged as Senior Vice President, Finance and Chief Accounting Officer of the Company. His powers and duties in that capacity shall be those normally associated with the position of Senior Vice President, Finance and Chief Accounting Officer. During the term of this Agreement, Officer shall also serve without additional compensation in such other offices of the Company and its subsidiaries to which he may be elected or appointed by the Board of Directors.

3. TERM . Subject to provisions of termination as hereinafter provided, the initial term of Officer’s employment under this Agreement shall terminate on December 31, 2014. On each December 31 during the term of this Agreement, commencing on December 31, 2014, unless the Company notifies Officer, pursuant to the following paragraph, that his employment under this Agreement will not be extended, his employment under this Agreement shall automatically be extended for a one (1) year period on the same terms and conditions as are set forth herein.

If the Company elects not to extend Officer’s employment under this Agreement, it shall do so by notifying Officer in writing not less than sixty (60) days prior to the applicable December 31 of this Agreement. If the Company does not elect to extend Officer’s employment under this Agreement other than for Cause (as hereinafter defined), Officer shall be considered to have been terminated without Cause upon the expiration of his employment, and Officer will receive the payments and benefits set forth in Section 8 hereof.

4. COMPENSATION .

 

  a. For all duties rendered by Officer, the Company shall pay Officer a minimum salary of $312,000 per year, payable in equal semi-monthly installments. In addition thereto, each year, beginning January 1, 2014, Officer’s compensation will be reviewed by the Board of Directors of the Company, or the Compensation Committee thereof, and after taking into consideration performance and any other factors deemed relevant, the Committee may increase Officer’s salary. Officer will be eligible to receive an annual bonus on the terms and conditions approved by the Compensation Committee of the Company’s Board of Directors. Officer shall also be eligible to receive equity incentive awards as approved from time to time by the Compensation Committee of the Company’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 Officer in the performance of his duties under this Agreement (or shall reimburse Officer on account of such expenses paid directly by Officer) 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 Officer’s taxable year following the taxable year in which the expense is incurred by Officer); provided, however, that upon Officer’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 Officer for such expenses after the later of (i) the first anniversary of the date of Officer’s death or (ii) December 31 of the calendar year following the year of the Officer’s termination of employment with the Company (other than by reason of Officer’s death).

 

  d. Officer shall be eligible to receive such equity incentive awards under the Company’s equity incentive plans as may be approved from time to time by the Compensation Committee of the Board of Directors of the Company. Any such awards shall be subject to such vesting and other terms and conditions as shall be approved by the Compensation Committee of the Board of Directors of the Company. Any such awards that are subject solely to time-based vesting restrictions (including any such awards outstanding as of the date of this Agreement) shall automatically vest upon the termination of employment of Officer as a result of (i) the death of Officer, (ii) the Disability of Officer (as defined in Section 6), (iii) the termination of employment by Officer for Good Reason (as defined in Section 21), and (iv) the termination of employment by the Company without Cause (as defined in Section 7); provided, that the vesting of such awards shall not accelerate upon the termination of Officer as a result of the termination of employment by the Company without Cause (as defined in Section 7) if such termination without Cause by the Company is a Performance Termination (as defined in Section 21).

5. EXTENT OF SERVICE . Officer shall devote substantially his entire time, attention and energies to the business of the Company and shall not during the term of this Agreement take an active role in any other business activity without the prior written consent of the Company; but this

 

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shall not prevent Officer from making real estate or other investments of a passive nature or devoting time to charitable and non-profit activities and service as a director on the board(s) of directors of companies (whether public or private) other than the Company, in each case, in accordance with the Company’s Corporate Governance Guidelines and in a manner that does not interfere with the performance of his duties to the Company.

6. DISABILITY . In the event Officer shall become disabled as defined in Treasury Regulation 1.409(A)-3(i)(4) (“Disability”), the Company shall provide the following payments and benefits:

 

  a. The Accrued Rights (as defined in Section 7(a) below);

 

  b. If Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the Disability Payment Date (as defined below) occurs, based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the Disability Payment Date, payable to Officer pursuant to Section 4(a) had Officer’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 adopted by the Company; and

 

  c. Through insurance or on its own account coverage for Officer that will provide payment of Officer’s full salary and benefits for twelve (12) months, with (i) the payment of Officer’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 Officer’s salary was paid prior to such incapacity or illness. For the period beyond twelve (12) months, the Company shall provide such coverage to Officer as is then available to Officer 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.

The date on which it is determined that Officer is Disabled is referred to herein as the “Disability Payment Date.”

 

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7. TERMINATION FOR CAUSE .

 

  a. The Company may terminate Officer’s employment for Cause, without any further liability hereunder to Officer, except that Officer 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 Officer is entitled to reimbursement in accordance with Section 4(g) , and (iii) benefits to which the Officer 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 Officer’s employment based upon the following grounds (i) a felony conviction of Officer or the failure of Officer to contest prosecution for a felony, (ii) conviction of a crime involving moral turpitude, or (iii) willful and continued misconduct or gross negligence by Officer in the performance of his duties as an officer 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 Officer 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 the Company. In making such determination, the Board of Directors of the Company shall not act unreasonably or arbitrarily and no act or omission by Officer shall be deemed willful if taken by Officer 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 Officer’s employment for Cause, Officer shall have the opportunity, together with his counsel, to be heard before the Board of Directors.

8. TERMINATION WITHOUT CAUSE OR FOR GOOD REASON . Officer’s employment under this Agreement may be terminated by the Company at any time without Cause or by the Officer for Good Reason (as defined in Section 21 ). Except as provided in Section 9 below, in the event Officer’s employment under this Agreement is terminated by the Company without Cause or by the Officer for Good Reason, the Company shall pay Officer the following payments and benefits:

 

  a. The Accrued Rights;

 

  b. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

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  c. Officer shall also continue to be covered under health and life insurance plans of the Company for two (2) years, 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 Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company;

Benefits due under Section 8(a)-(c)  shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of the payment and other benefits under this Section 8 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

9. TERMINATION FOLLOWING A CHANGE IN CONTROL . In the event Officer’s employment under this Agreement is terminated by the Company without Cause within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein) or by Officer for Good Reason within twelve (12) months following the occurrence of a Change in Control (as defined in Section 21 herein), the Company shall pay Officer the following payments and benefits:

 

  a. a lump sum payment equal to two (2) times the sum of (i) the annual base salary payable to Officer as of the date of the Officer’s Separation from Service and (ii) the target bonus established by the Compensation Committee of the Board of Directors for the Officer pursuant to the Company’s annual cash bonus plan for the year in which the Separation of Service occurs;

 

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  b. Officer shall also continue to be covered under health and life insurance plans of the Company for two (2) years, 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 Officer’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 Officer would have been entitled to receive with respect to such completed fiscal year, based upon the Company’s actual results, the Company shall pay to Officer, at the time such bonus is paid to other executives of the Company according to the terms of the applicable bonus program adopted by the Company, the amount of such bonus described in Section 4(a) , if any, that Officer would have been entitled to receive with respect to such completed fiscal year had Officer’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 Officer would have been entitled to receive for the fiscal year in which the termination of employment occurs, based upon the Company’s actual results 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 Officer pursuant to Section 4(a) had Officer’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 adopted by the Company.

Benefits due under this Section 9 shall be payable (or commence) within sixty (60) days of the Officer’s Separation from Service, with the date of such payment determined by the Company in its sole discretion in accordance with Section 11 below. Receipt by Officer of any payment or other benefits under this Section 9 shall be subject to Officer’s execution and delivery, pursuant to the terms of Section 11 below, to the Company of a General Release in form and substance reasonably acceptable to the Company and Officer.

10. TERMINATION BY OFFICER WITHOUT GOOD REASON . Officer may terminate his employment under this Agreement at any time other than for Good Reason (as defined in Section 21 herein) upon the provision of sixty (60) days prior written notice to the Company. In such event, the Company shall pay Officer the Accrued Rights, and officer shall not be entitled to any other benefits under this Agreement following the date of termination of this employment with the Company. In the event Officer gives notice of his intent to terminate his employment other than for Good Reason, the Company may elect to waive the period of notice or any portion thereof and accept Officer’s resignation prior to the end of the notice period.

11. COORDINATION WITH RELEASE . Notwithstanding any provision herein to the contrary, the provisions of this Section 11 shall apply to the payment of benefits under Sections 8 and 9 (the “Severance Payments”). The Severance Payments shall be made only if Officer shall have executed, on or prior to the Release Expiration Date (as defined below), a General Release in form and substance reasonably acceptable to the Company and Officer (the “Release”) and any waiting periods contained in the Release shall have expired. In any instance where the execution of a Release is required, the Company shall deliver the Release to the Officer within eight (8) days following the date of the Officer’s Separation from Service. If Officer fails to execute and deliver

 

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the Release on or prior to the Release Expiration Date or timely revokes Officer’s acceptance of the Release thereafter, Officer shall not be entitled to any Severance Payments. The Severance Payments shall be made immediately upon the expiration of any waiting periods contained in the Release, or if no waiting periods are applicable, within two (2) business days following Officer’s execution and delivery of the Release to the Company; provided, however, notwithstanding anything herein to the contrary, in any case where the date the Separation from Service and the Release Expiration Date fall in two separate taxable years, any Severance Payments that are treated as deferred compensation for purposes of Section 409A of the Code shall be made in the later taxable year. For purposes of this Section 11 , the “Release Expiration Date” shall mean the later of (i) the date of the Officer’s Separation from Service, and (ii) the date that is twenty-one (21) days following the date on which the Company timely delivers a Release to the Officer for the Officer’s execution, or in the event that the Officer’s Separation from Service is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date.

12. RESTRICTIVE COVENANTS .

 

  (a) Confidential Information . Officer 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, 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 two (2) years following the date of the termination of Officer’s employment with the Company other than in the event of a termination by the Officer for Good Reason, Officer agrees that he will not, either as an individual for his own account, as a partner or joint venturer, or as an employee, agent, officer, 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, or

 

  (ii) any other line of business in which the Company is engaged on the date of termination of Officer’s employment with the Company (for purposes of clarification, 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),

 

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     in the case of each of (i) and (ii) above in any state within the United States or in any foreign country or territory in which the Company or any of its subsidiaries conducts business as of the date of termination of Officer’s employment with the Company. The Company and Officer acknowledge and agree that the provisions of this Section 12(b) shall not restrict Officer from accepting employment or otherwise being involved with a business (such as a company that owns or operates hospitals or health systems) other than United Surgical Partners International, Inc. and Surgical Care Affiliates, Inc. and their respective affiliates that has a unit, division, segment or subsidiary that competes with the Company as described above in this Section 12(b) so long as Officer does not directly participate in the management of the unit, division, segment or subsidiary that competes with the business of the Company as described in subsections (i) and (ii) above.

 

  (c) Non-Solicitation . Upon termination or expiration of his employment, whether voluntary or involuntary, Officer agrees not to directly or indirectly solicit business of the type described in Sections 12(b)(i) and 12(b)(ii) 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 Officer knew or had reason to know that the Company was soliciting or going to solicit business at the time of Officer’s termination, for a two-year-year period from the date of Officer’s termination of his employment with the Company.

 

  (d) Enforcement . Officer 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.

 

  (e) Termination . Notwithstanding any provision to the contrary otherwise contained in this Agreement, the agreements and covenants contained in this Section 12 shall not terminate upon Officer’s termination of his employment with the Company or upon the termination of this Agreement under any other provision of this Agreement.

13. VACATION . During each year of this Agreement, Officer shall be entitled to not less than twenty five (25) paid vacation days per year, which shall accrue monthly.

14. BENEFITS . In addition to the benefits specifically provided for herein, Officer shall be entitled to participate in all benefit plans maintained by the Company for employees generally according to the terms of such plans.

 

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15. NOTICES . Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, and if sent by registered or certified mail to his residence in the case of Officer, or to its principal office in the case of the Company.

16. WAIVER OF BREACH . The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party.

17. ATTORNEYS’ FEES . In the event that either party initiates legal proceedings to enforce any provision of this Agreement or resolve any dispute hereunder, and Officer is the prevailing party, then the Company shall be responsible for payment of the Officer’s reasonable attorneys’ fees incurred in connection therewith.

18. ASSIGNMENT . The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. The Officer acknowledges that the services to be rendered by him are unique and personal, and the Officer may not assign any of his rights or delegate any of his duties or obligations under this Agreement.

19. ENTIRE AGREEMENT . This instrument contains the entire agreement of the parties with respect to the matters addressed herein. It may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. This Agreement shall be governed by the laws of the State of Tennessee.

20. HEADINGS . The sections, subjects and headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

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 the Company by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act);

 

  (ii) the merger or consolidation of the Company with or into another corporation or other entity, or any share exchange or similar transaction involving the Company 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 the Company 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;

 

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  (iii) the sale of all, or substantially all, of the assets of the Company; or

 

  (iv) any change in the composition of the Board of Directors of the Company, 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 the Company, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of the Company at the end of such period.

 

  b. “Company” shall mean AmSurg Corp., 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 Officer’s authority and responsibilities;

(ii) there is a material diminution in Officer’s rate of base salary or overall compensation (for reasons other than Company performance or stock price);

(iii) the Company changes the principal location in which Officer is required to perform services outside a twenty (20) mile radius of such location without Officer’s consent; or

(iv) the Company engages in any other action or inaction that constitutes a material breach of this Agreement by the Company.

A termination under the circumstances listed above shall be for “Good Reason” only if (A) Officer notifies the Company of the existence of the condition that otherwise constitutes Good Reason within ninety (90) days of the initial existence of the condition, (B) the Company fails to remedy the condition within forty-five (45) days following its receipt of Officer’s notice of Good Reason and (C) the Officer Separates from Service from the Company due to the condition within twelve (12) months of the initial existence of such condition.

 

  d.

“Separation from Service” shall mean the date on which the Company and Officer reasonably anticipate that no further services will be performed after such date, or that the level of bona fide services Officer will perform after

 

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  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-1(h) of the U.S. Treasury Regulations.

 

  e. “Performance Termination” shall mean the termination of Officer’s employment by the Company without Cause (as defined in Section 7) following the failure of 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 the Company (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 the Company has failed to achieve any such budget measure for a fiscal year shall be based upon the Company’s audited financial statements for such fiscal year. In making a determination whether 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 the Company operates, and adverse weather incidents or other acts of God that are not within the control of the Company. In the event the Board of Directors determines that the Company has failed to achieve such budget measure in any fiscal year, the Board will give the Officer written notice of such fact within five (5) business days following the filing of the Annual Report on Form 10-K for the Company for such fiscal year. In the event the Board of Directors determines to terminate Officer’s employment without Cause pursuant to a Performance Termination, the Board must give Officer notice of such termination before the later of (i) 180 days after the end of the second fiscal year end of the Company in which the Company failed to meet such budget measures and (ii) the date of the annual meeting of the Company’s shareholders following the end of the second fiscal year of the Company in which the Company failed to meet such budget measures.

22. DELAY OF PAYMENTS . It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date Officer’s employment with the Company terminates or at such other time that the Company determines to be relevant, Officer is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Officer pursuant to this Agreement are or may become

 

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subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of Officer’s Separation from Service with the Company, or, if earlier, the date of the Officer’s death. Any payments delayed pursuant to this Section 22 shall be made in a lump sum on the first day of the seventh month following Officer’s Separation from Service, or, if earlier, the date of the Officer’s death (the “Section 409A Payment Date”). In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Officer participates during the term of the Officer’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) such right to reimbursement or payment shall not be subject to liquidation or exchange for another benefit.

23. HEALTH BENEFITS . The costs of the Company’s portion of any post termination health or life insurance premiums due under this Agreement shall be included in the Officer’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Code.

24. DEEMED RESIGNATION . In the event Officer’s employment under this Agreement is terminated for any reason, unless otherwise determined by the Board of Directors of the Company, Officer shall be deemed, without any further action on the part of Officer, to have automatically resigned as a director of the Company and as an officer and director, if applicable, of all subsidiaries of the Company.

25. SECTION 280G 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 280G 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

 

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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 Officer is liable for the Excise Tax as a result of the receipt of such Payments or Reduced Amount, as applicable, then Officer 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 Officer’s

 

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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, Officer shall pay the Excise Tax.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written.

 

/s/ Kevin D. Eastridge

Kevin D. Eastridge

AMSURG CORP.

By:

 

/s/ Christopher A. Holden

Name: Christopher A Holden

Title: Chief Executive Officer

 

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