Exhibit 10.17

 

Employee Stock Option Agreement
(Rollover Options)

 

This Employee Stock Option Agreement, dated as of May 25, 2011, between CDRT
Holding Corporation, a Delaware corporation, and the Employee whose name appears
on the signature page hereof, is being entered into pursuant to the CDRT Holding
Corporation Stock Incentive Plan.  The meaning of capitalized terms may be found
in Section 7.

 

The Company and the Employee hereby agree as follows:

 

Section 1.              Grant of Options

 

(a)                 Confirmation of Grant.  The Company hereby evidences and
confirms, effective as of the date hereof, its grant to the Employee of Options
to purchase the number of shares of Common Stock specified on the signature
page hereof.  The Options are not intended to be incentive stock options under
the Code.  This Agreement is entered into pursuant to, and the terms of the
Options are subject to, the terms of the Plan and the Rollover Agreement to
which the Employee and the Company are parties.  If there is any inconsistency
between this Agreement and the terms of the Plan and the Rollover Agreement, the
terms of the Plan and the Rollover Agreement shall govern.  As a condition to
the grant of the Options, the Employee agrees that, as of the Effective Time,
the definition of “Good Reason” contained in the Plan shall supersede and
replace the same definition or other provision having similar effect relating to
the constructive discharge of the Employee in all agreements containing such
definition or provision entered into between the Employee, on the one hand, and
the Company or any of its Affiliates, on the other hand, including but not
limited to any employment agreement containing such definition or provision.

 

(b)                Option Price.  Each share covered by an Option shall have the
Option Price specified on the signature page hereof.

 

Section 2.              Vesting and Exercisability

 

(a)                 Vesting.  The Options are fully vested and exercisable as of
the Grant Date.

 

(b)                Exercise. The Options may be exercised at any time and from
time to time prior to the date such Options terminate pursuant to Section 3. 
Options may only be exercised with respect to whole shares of Common Stock and
must be exercised in accordance with Section 4.

 

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Section 3.              Termination of Options

 

(a)                 Normal Termination Date.  Unless earlier terminated pursuant
to Section 3(b) or Section 6, the Options shall terminate on the termination
dates set forth on the signature page of this Agreement (the “Normal Termination
Date”), if not exercised prior to such date.

 

(b)                Early Termination.  All Options held by the Employee
following the effective date of a termination of employment, other than a
termination of employment for Cause, shall remain exercisable until the first to
occur of (i) the 90th day following the effective date of the Employee’s
termination of employment (or the 180th day in the case of a Special Termination
or a Retirement), (ii) the Normal Termination Date or (iii) the cancellation of
the Options pursuant to Section 6, and if not exercised within such period the
Options shall automatically terminate upon the expiration of such period.

 

(c)                 Special Rules Applicable to Certain Terminations of
Employment.

 

(i)         Termination for Cause.  In the event of the Employee’s termination
by the Company for Cause, all Options held by the Employee shall automatically
be cancelled, and, in consideration of such cancellation, the Employee shall be
paid the Notional Cause Repurchase Value (less any required withholding
taxes).(1)

 

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(1)               Example:  Assume that, prior to the closing of the merger,
employee E elected to roll over an option to purchase 10,000 shares of Emergency
Medical Services Corporation common stock with an exercise price of $29.65 per
share.  This option was converted at the closing of the merger into an option to
purchase the same number of shares (i.e., 10,000) of CDRT Holding Corporation
common stock with the same exercise price (i.e., $29.65).  Assume that E is
fired for “Cause” in 2012 at a time when the fair market value of the CDRT
Holding common stock is $100 per share.  Instead of the option being cancelled
for no value, E would receive a payment of $343,500 (less withholding taxes). 
This payment is intended to replicate the payment that E would have received if
(1) E’s 10,000 options had been cashed out at the closing of the merger, (2) E
had reinvested the cash from the cashout in shares of CDRT Holding common stock
at the then-fair market value of $64 per share and (3) those shares of CDRT
Holding common stock had been repurchased at the time of E’s departure at the
lower of cost and fair market value (i.e. $64, as $64 is less than $100).  This
formula is the “Notional Cause Repurchase Value” contained in the definitions to
this Agreement.  If the fair market value at the time of E’s departure was $50,
the deemed repurchase price in step 3 would be $50 and the payment to E would be
$268,359 (less withholding taxes).

 

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(ii)        Termination without Cause, or with Good Reason; Death; Disability. 
In the event that (i) the Employee’s employment is terminated (x) by the Company
without Cause, (y) by the Employee with Good Reason or (z) by reason of the
Employee’s death or Disability, and (ii) one or more of the Options terminates
without being exercised because the Fair Market Value of a Share equals or
exceeds the applicable Option Price (such Options, the “Out-of-the-Money
Options”), then the Employee shall be paid cash in an amount that is not less
than the Notional Cause Repurchase Value determined as if (I) the Employee’s
employment had been terminated by the Company for Cause and (II) the
Out-of-the-Money Options were the only Options subject to this Agreement.  Such
payment shall be made within 30 days following the date that the Options so
terminate.

 

Section 4.              Manner of Exercise

 

(a)                 General.  Subject to such reasonable administrative
regulations as the Board may adopt from time to time, the Employee may exercise
vested Options by giving at least 15 business days prior written notice to the
Secretary of the Company specifying the proposed date on which the Employee
desires to exercise a vested Option (the “Exercise Date”), the number of whole
shares with respect to which the Options are being exercised (the “Exercise
Shares”) and the aggregate Option Price for such Exercise Shares (the “Exercise
Price”); provided that following a Public Offering notice may be given within
such lesser period as the Board may permit.  The Exercise Shares shall be
subject to the Subscription Agreement to which the Employee is then a party, or,
if the Employee is not then a party to a Subscription Agreement, the Company and
the Employee shall enter into the Subscription Agreement attached to this
Agreement as Exhibit A.  Except as provided in Section 4(c) or as otherwise
determined by the Board, and subject to such other terms, representations and
warranties as may be provided for in the Subscription Agreement, (i) on or
before the Exercise Date the Employee shall deliver to the Company full payment
for the Exercise Shares in United States dollars in cash, or cash equivalents
satisfactory to the Company, in an amount equal to the Exercise Price plus any
required withholding taxes or other similar taxes, charges or fees and (ii) the
Company shall register the issuance of the Exercise Shares on its records (or
direct such issuance to be registered by the Company’s transfer agent).  The
Company may require the Employee to furnish or execute such other documents as
the Company shall reasonably deem necessary (i) to evidence such exercise,
(ii) to determine whether registration is then required under the Securities Act
or other applicable law or (iii) to comply with or satisfy the requirements of
the Securities Act, applicable state or non-U.S. securities laws or any other
law.

 

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(b)                Restrictions on Exercise.  Notwithstanding any other
provision of this Agreement, the Options may not be exercised in whole or in
part, and no certificates representing Exercise Shares shall be delivered,
unless (A) all requisite approvals and consents of any governmental authority of
any kind shall have been secured, (B) the purchase of the Exercise Shares shall
be exempt from registration under applicable U.S. federal and state securities
laws, and applicable non-U.S. securities laws, or the Exercise Shares shall have
been registered under such laws, and (C) all applicable U.S. federal, state and
local and non-U.S. tax withholding requirements shall have been satisfied.  The
Company shall use its commercially reasonable efforts to obtain any consents or
approvals referred to in clause (A) of the preceding sentence, but shall
otherwise have no obligations to take any steps to prevent or remove any
impediment to exercise described in such sentence.

 

(c)                 Exercise by Net Issuance.  Except to the extent limited by
any of the Financing Agreements, at the election of the Employee made upon
exercise of the Options, and in lieu of the Employee being required to pay the
Exercise Price plus any required withholding taxes or other similar taxes,
charges or fees in United States dollars in cash or cash equivalents
satisfactory to the Company, the Company shall deliver to the Employee a lesser
number of shares of Common Stock having a Fair Market Value on the date of
exercise equal to the amount by which the Fair Market Value of the Exercise
Shares exceeds the Exercise Price plus any required withholding taxes or other
similar taxes, charges or fees; provided, that the Company may elect not to
permit exercise of the Options in the manner set forth in this
Section 4(c) following a Public Offering if the Company makes available to the
Employee a broker-assisted cashless exercise feature with respect to such
exercise.  In no event shall this Section 4(c) be construed to permit net
issuance in excess of the applicable portion of the exercise price and minimum
required withholding taxes.

 

(d)                Automatic Exercise.  Notwithstanding Section 4(a), vested
Options that have not been exercised prior to the applicable termination date
contained in Section 3(a) or 3(b) and that are not Out-of-the-Money Options
shall be exercised automatically pursuant to the procedure set forth in
Section 4(c) (except to the extent limited by any of the Financing Agreements)
on such termination date; provided, that (i) the Employee shall enter into the
Subscription Agreement not later than five business days following the date of a
request by the Company to do so and (ii) if the Employee fails to enter into the
Subscription Agreement as aforesaid, the exercise of the vested Options shall be
rescinded and the Employee shall be paid the Notional Cause Repurchase Value
(less any required withholding taxes).

 

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Section 5.              Employee’s Representations; Investment Intention.  The
Employee represents and warrants that the Options have been, and any Exercise
Shares will be, acquired by the Employee solely for the Employee’s own account
for investment and not with a view to or for sale in connection with any
distribution thereof.  The Employee represents and warrants that the Employee
understands that none of the Exercise Shares may be transferred, sold, pledged,
hypothecated or otherwise disposed of unless the provisions of the Subscription
Agreement shall have been complied with or have expired.

 

Section 6.              Cancellation upon a Change in Control.  In the event of
a Change in Control, all then-outstanding Options shall be canceled in exchange
for a payment having a value equal to the excess, if any, of (i) the product of
the Change in Control Price multiplied by the aggregate number of shares covered
by all such Options immediately prior to the Change in Control over (ii) the
aggregate Option Price for all such shares, to be paid as soon as reasonably
practicable, but in no event later than 30 days following the Change in
Control.  The foregoing notwithstanding, if mutually agreed to by the Board and
the Employee, in lieu of such cancellation the Employee shall receive an
Alternative Award meeting the requirements of the Plan.

 

Section 7.              Certain Definitions.  As used in this Agreement,
capitalized terms that are not defined herein have the respective meaning given
in the Plan, and the following additional terms shall have the following
meanings:

 

“Agreement” means this Employee Stock Option Agreement, as amended from time to
time in accordance with the terms hereof.

 

“Code” means the United States Internal Revenue Code of 1986, as amended, and
any successor thereto.

 

“Company” means CDRT Holding Corporation, provided that for purposes of
determining the status of Employee’s employment with the “Company,” such term
shall include the Company and/or any of its Subsidiaries that employ the
Employee.

 

“Effective Time” has the meaning set forth in the Rollover Agreement to which
the Company and the Employee are parties.

 

“Employee” means the grantee of the Options, whose name is set forth on the
signature page of this Agreement; provided that for purposes of Section 4 and
Section 8, following such person’s death “Employee” shall be deemed to include
such person’s beneficiary or estate and following such Person’s Disability,
“Employee” shall be deemed to include such person’s legal representative.

 

“Exercise Date” has the meaning given in Section 4(a).

 

“Exercise Price” has the meaning given in Section 4(a).

 

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“Exercise Shares” has the meaning given in Section 4(a).

 

“Grant Date” means the date hereof, which is the date on which the Options are
granted to the Employee.

 

“Normal Termination Date” has the meaning given in Section 3(a).

 

“Notional Cause Repurchase Value” means the result produced from the formula
((X/Y)*Z), where:

 

X equals the amount of cash that the Employee would have been paid (determined
without regard to taxes that would have been payable on such amount of cash)
with respect to the number of Converting Company Options corresponding to the
number of Options outstanding immediately prior to the date of termination if
such number of Converting Company Options had been cancelled for cash pursuant
to Section 3.04(a) of the Merger Agreement;

 

Y equals $64; and

 

Z equals the lesser of $64 and the Fair Market Value of a share of Common Stock
on the date of termination.

 

For purposes of this definition, the terms “Converting Company Options” and
“Merger Agreement” have the meanings set forth in the Rollover Agreement.

 

“Option” means the right granted to the Employee hereunder to purchase one share
of Common Stock for a purchase price equal to the Option Price subject to the
terms of this Agreement and the Plan.

 

“Option Price” means, with respect to each share of Common Stock covered by an
Option, the purchase price specified in Section 1(b) for which the Employee may
purchase such share of Common Stock upon exercise of an Option.

 

“Plan” means the CDRT Holding Corporation Stock Incentive Plan.

 

Section 8.              Miscellaneous.

 

(a)                 Withholding.  Subject to the terms and conditions of
Section 4(c), the Company or one of its Subsidiaries may require the Employee to
remit to the Company an amount in cash sufficient to satisfy any applicable U.S.
federal, state and local and non-U.S. tax withholding or other similar charges
or fees that may arise in connection with the grant, vesting, exercise or
purchase of the Options.

 

(b)                No Rights as Stockholder; No Voting Rights.  The

 

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Employee shall have no rights as a stockholder of the Company with respect to
any shares covered by the Options until the exercise of the Options and delivery
of the shares.  Except as provided in Section 3.3 of the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the delivery of the shares.  Any shares delivered in respect of the Options
shall be subject to the Subscription Agreement and the Employee shall have no
voting rights with respect to such shares until such time as specified in the
Subscription Agreement.

 

(c)                 No Right to Continued Employment.  Nothing in this Agreement
shall be deemed to confer on the Employee any right to continue in the employ of
the Company or any Subsidiary, or to interfere with or limit in any way the
right of the Company or any Subsidiary to terminate such employment at any time.

 

(d)                Non-Transferability of Options.  The Options may be exercised
only by the Employee, or, following the Employee’s death, by his designated
beneficiary or by his estate in the absence of a designated beneficiary.  The
Options are not assignable or transferable, in whole or in part, and they may
not, directly or indirectly, be offered, transferred, sold, pledged, assigned,
alienated, hypothecated or otherwise disposed of or encumbered (including, but
not limited to, by gift, operation of law or otherwise) other than by will or by
the laws of descent and distribution to the estate of the Employee upon the
Employee’s death or with the Company’s consent.

 

(e)                 Notices.  All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such delivery, to the Company or the Employee, as
the case may be, at the following addresses or to such other address as the
Company or the Employee, as the case may be, shall specify by notice to the
other:

 

(i)          if to the Company, to it at:

 

CDRT Holding Corporation
c/o Clayton, Dubilier & Rice, LLC
375 Park Avenue
18th Floor
New York, New York  10152
Attn:  Theresa Gore
Facsimile:  (212) 407-5252

 

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(ii)        if to the Employee, to the Employee at his or her most recent
address as shown on the books and records of the Company or Subsidiary employing
the Employee; and

 

with copies (each of which shall not by itself constitute notice hereunder) to:

 

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

 

Attention:

Paul S. Bird, Esq.

 

Jonathan E. Levitsky, Esq.

 

Fax: (212) 909-6836

 

All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof.

 

(f)                 Binding Effect; Benefits.  This Agreement shall be binding
upon and inure to the benefit of the parties to this Agreement and their
respective successors and assigns.  Nothing in this Agreement, express or
implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or assigns any legal or
equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.

 

(g)                Waiver; Amendment.

 

(i)         Waiver.  Any party hereto or beneficiary hereof may by written
notice to the other parties (A) extend the time for the performance of any of
the obligations or other actions of the other parties under this Agreement,
(B) waive compliance with any of the conditions or covenants of the other
parties contained in this Agreement and (C) waive or modify performance of any
of the obligations of the other parties under this Agreement.  Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party or
beneficiary, shall be deemed to constitute a waiver by the party or beneficiary
taking such action of compliance with any representations, warranties, covenants
or agreements contained herein.  The waiver by any party hereto or beneficiary
hereof of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by a
party or beneficiary to exercise any right or privilege hereunder shall be
deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder
or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise
the same at

 

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any subsequent time or times hereunder.

 

(ii)        Amendment.  This Agreement may not be amended, modified or
supplemented orally, but only by a written instrument executed by the Employee
and the Company.

 

(h)                Assignability.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or the Employee without the prior written consent of
the other party.

 

(i)                  Applicable Law.  This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware regardless of the
application of rules of conflict of law that would apply the laws of any other
jurisdiction.

 

(j)                  Waiver of Jury Trial.  Each party hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any suit, action or proceeding arising out of this Agreement
or any transaction contemplated hereby.  Each party (i) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other
parties have been induced to enter into the Agreement by, among other things,
the mutual waivers and certifications in this Section 8(j).

 

(k)                 Section and Other Headings, etc.  The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.

 

(l)                  Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.

 

(m)                Entire Agreement.  This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter.  Without limiting the generality of the immediately preceding
sentence, effective as of the Effective Time, this Agreement shall supersede the
agreements and plans evidencing the Converting Company Options (as defined in
the Rollover Agreement).

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as
of the date first above written.

 

 

 

CDRT HOLDING CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

THE EMPLOYEE:

 

 

 

«Name»

 

 

 

 

 

By:

 

 

 

as Attorney-in-Fact

 

 

Name:

 

 

 

 

 

Address of the Employee:

 

 

 

«Address»

 

 

 

 

2005 Grant

 

2007 Grant

 

2008 Grant

 

2009 Grant

 

2010 Grant

 

Number of Shares for the Purchase of Which Options have been Granted

 

«M_2005_Options»

 

«M_2007_Options»

 

«M_2008_Options»

 

«M_2009_Options»

 

«M_2010_Options»

 

Option Price

 

«M_2005_Strike_Price»

 

«M_2007_Strike_Price»

 

«M_2008_Strike_Price»

 

«M_2009_Strike_Price»

 

«M_2010_Strike_Price»

 

Normal Termination Date

 

«M_2005_Exp_Date»

 

«M_2007_Exp_Date»

 

«M_2008_Exp_Date»

 

«M_2009_Exp_Date»

 

«M_2010_Exp_Date»

 

 

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Exhibit A

 

Form of Subscription Agreement

 

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