Attached files
Exhibit 10.1
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January 18, 2016
Mr. Adam S. Winger
c/o Baker, Donelson, Bearman,
Caldwell & Berkowitz, PC
Wells Fargo Tower
420 20th Street North, Suite 1400
Birmingham, Alabama 35203-5202
Dear Adam:
We are very pleased to extend an offer to you to become the President and Chief Executive Officer of American CareSource Holdings, Inc., a Delaware corporation (the "Company"), in the place of your current positions of Vice President of Acquisitions and General Counsel of the Company. Also, we would like you to continue serving as Interim Chief Financial Officer and Secretary until we fill those positions with other qualified persons. The change in positions will be effective on January 19, 2016, and your continued employment will be subject to the terms and conditions of this letter.
Duties
In your capacity as President and Chief Executive Officer, you will perform duties and responsibilities that are commensurate with your position and such other duties as may be assigned to you from time to time. You will report directly to the Board of the Company. You agree to devote your full business time, attention and best efforts to the performance of your duties and to the furtherance of the Company's interests.
Compensation, Benefits and Expenses
In consideration of your services, you will be paid a base salary of $250,000 per year, subject to review from time to time for increase, but not decrease, payable in accordance with the standard payroll practices of the Company and subject to all withholdings and deductions as required by law.
During your employment as President and Chief Executive Officer, you will be eligible to receive a discretionary annual bonus at such times and in such amounts, up to 40% of your base salary, as determined by the Board, but in no event less than $50,000. Actual payments will be determined based on a combination of Company results and individual performance, which will be compared against performance goals established jointly by you, the compensation committee, and the Board. Any annual bonus with respect to a particular calendar year will be payable on the earlier of March 15 following the calendar year with respect to which the bonus was earned or on the next regularly-scheduled payroll date immediately following the issuance of the independent auditors report for such year. You must remain continuously employed through the bonus payment date to be eligible to receive an annual bonus payment for a particular year.
Mr. Adam S. Winger
January 18, 2016
Page 2 of 5
In connection with your acceptance of your new positions, the Board has awarded you a stock option to purchase 300,000 shares of the Company’s common stock and 200,000 restricted stock units ("RSUs"). These awards will be subject to the terms and conditions of the Company’s Amended and Restated 2009 Equity Incentive Plan and Award Agreements, which are enclosed with this letter. The RSUs will vest in equal monthly instalments on the first day of the 36 months immediately following the date of this letter. The option will vest over a five-year period as follows: 20% on the anniversary of the date of this letter, and the remainder in equal, monthly instalments on the first day of the 48 months immediately following the anniversary date. The option is intended, to the extent possible, to be an Incentive Stock Option, although the Company makes no representation or guarantee that the option will qualify as such. To the extent a portion of the option is not eligible for treatment as an Incentive Stock Option, due to the fair market value limitation or otherwise, the ineligible portion shall be treated as a Non-Qualified Stock Option.
The Board will also award you a separate stock option to purchase an additional 300,000 shares of the Company's common stock. Such option will vest in one-third increments upon the attainment of each of the following milestones (as may be described in further detail in the applicable award agreement): (i) the Company’s center-level EBITDA (before reduction for corporate overhead expenses), for any consecutive, 12-month period equals or exceeds $2,000,000; (ii) the Company’s enterprise EBITDA (after reduction for corporate overhead expenses) for any consecutive, 12-month period equals or exceeds zero; and (iii) the Company’s enterprise EBITDA (after reduction for corporate overhead expenses) for any consecutive, 12-month period equals or exceeds $2,000,000. This award will also be subject to the terms and conditions of the Company's Amended and Restated 2009 Equity Incentive Plan and a Stock Option Award Agreement to be provided promptly upon execution of this letter agreement.
All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.
You will be eligible to continue to participate in the employee benefit plans and programs generally available to the Company's executives, including group medical, dental, and other benefits subject to the terms and conditions of such plans and programs. You will be entitled to paid vacation in accordance with the Company's policies in effect from time to time. You will be reimbursed for reasonable professional expenses, including, without limitation, professional license fees, professional association membership fees, publications, and continuing legal education .You will also be entitled to the fringe benefits and perquisites that are made available to other similarly situated executives of the Company, each in accordance with and subject to the eligibility and other provisions of such plans and programs. The Company reserves the right to amend, modify or terminate any of its benefit plans or programs at any time and for any reason. Furthermore, the company will pay the reasonable cost of an executive coach to assist in your transition into and performance of your new role.
Subject to applicable company policy, you will be entitled to reimbursement for all reasonable out-of-pocket expenses incurred in performing your duties and responsibilities. For all incurred expenses, you will submit expense reports and receipts documenting the expenses incurred in accordance with Company policy.
Mr. Adam S. Winger
January 18, 2016
Page 3 of 5
At-Will Employment
Your employment with the Company will be for no specific period of time. Rather, your employment will continue to be at-will, meaning that you or the Company may terminate the employment relationship at any time, with or without cause, and with or without notice and for any reason or no particular reason. Although your compensation and benefits may change from time to time, the at-will nature of your employment may only be changed by an express written agreement signed by an authorized officer of the Company.
Severance/Change in Control Severance
If your employment with the Company is terminated due to a “change of control” or for reasons other than for “cause,” the Company will pay you an amount equal to six months’ salary, plus applicable benefit premiums, on the dates and in such amounts as if you were still employed with the Company and only in the event of a “change of control” all of your unvested equity in the Company will immediately become vested in accordance with the terms of the applicable equity award agreement.
As used herein, "good reason" shall mean (i) a material default by the Company in the performance of any of its obligations hereunder, which default remains uncured by the Company for a period of 30 days following receipt of written notice thereof to the Company from Employee, (ii) the Company's request or demand that you relocate from the Birmingham, Alabama area, or (iii) the occurrence or existence of any other circumstance constituting constructive termination under applicable law.
The term “cause” shall mean (i) fraud, embezzlement, or theft; (ii) willful misconduct damaging to the company, its reputation, products, services, or customers; (iii) intentional violation of any law or regulation; (iv) continued failure to perform duties owed to the Company; and (v) being convicted of a felony or other crime involving moral turpitude.
The term "change of control" means any of the following: (i) the acquisition by any individual, entity or affiliated group in one or a series of transactions (including, without limitation, issuance of shares by the Company or through merger of the Company with another entity) of record or beneficial ownership of 50% or more of the voting power of the Company; (ii) a sale of all or substantially all of the assets of the Company; or (iii) the Board, in its sole and absolute discretion, determines that there has been a sufficient change in the stock ownership of the Company to constitute a change in control of the Company. Notwithstanding the foregoing, the raising of any capital by the Company shall not constitute a “change of control.”
From the date of your separation until the end of the sixth month immediately thereafter, you shall not, directly or indirectly, for your own benefit or for that of others, within 25 miles of any facility owned or managed by the Company, (i) hire, attempt to hire, contact or solicit with respect to hiring, any employee of the Company who has provided service to or for the Company within the 12-month period immediately preceding your separation date; or (ii) provide services as an employee or independent contractor in a capacity comparable to that for which you are hired pursuant to this letter agreement for or on behalf of any business, entity, or organization that engages in a business competitive to that of the Company.
Mr. Adam S. Winger
January 18, 2016
Page 4 of 5
Section 409A
This offer letter is intended to comply with Section 409A of the Internal Revenue Code ("Section 409A") or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this offer letter, payments provided under this offer letter may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this offer letter that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this offer letter shall be treated as a separate payment. Any payments to be made under this offer letter upon a termination of employment shall only be made upon a "separation from service" under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this offer letter comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.
Notwithstanding any other provision of this offer letter, if any payment or benefit provided to you in connection with termination of employment is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and you are determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of your termination date (the "Specified Employee Payment Date") or, if earlier, on the date of your death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
By accepting this offer, you represent that you are able to accept this job and carry out the work that it would involve without breaching any legal restrictions on your activities, such as non-competition, non-solicitation or other work-related restrictions imposed by a current or former employer. You also represent that you will inform the Company about any such restrictions and provide the Company with as much information about them as possible, including any agreements between you and your current or former employer describing such restrictions on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind, electronic or otherwise, with you from your current or former employer to the Company without written authorization from your current or former employer, nor will you use or disclose any such confidential information during the course and scope of your employment with the Company. If you have any questions about the ownership of particular documents or other information, you should discuss such questions with your former employer before removing or copying the documents or information.
Mr. Adam S. Winger
January 18, 2016
Page 5 of 5
This Agreement shall be governed by, construed and enforced in accordance with, the laws of the State of Delaware, and venue and jurisdiction for any disputes hereunder shall be heard in any court of competent jurisdiction in Delaware for all purposes. This letter agreement supersedes are replaces your employment letter dated as of June 19, 2014 and all exhibits thereto.
We are excited about your acceptance of the positions of President and Chief Executive Officer. If you have any questions about the above details, please call me immediately. If you are in agreement with the terms set forth in this letter, please sign below and return this letter to me.
Sincerely,
/s/ John Pappajohn
John Pappajohn, Acting CEO
Acceptance of Offer
I have read, understood and accept all the terms of the offer of employment as set forth in the foregoing letter. I have not relied on any agreements or representations, express or implied, that are not set forth expressly in the foregoing letter, and this letter supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to the subject matter of this letter.
Adam S. Winger
Signed /s/ Adam S. Winger
Date January 18, 2016