Exhibit 10.6

 

THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT

 

This Third Amendment to Executive Employment Agreement (this “Third Amendment”)
is effective as of February 12, 2009, by and among Prospect Medical
Holdings, Inc., a Delaware corporation (“PMH”), Alta Hospitals System, LLC, a
California limited liability company (“Alta”), and Samuel S. Lee, an individual
(“Executive”).

 

a.             Executive and Alta entered into that certain Executive Employment
Agreement, dated August 8, 2007 (the “Original Agreement”).

 

b.             The Original Agreement was amended by that certain First
Amendment to Executive Employment Agreement, dated March 19, 2008 (the “First
Amendment”), by and among PMH, Alta and Executive, which amendment principally
provided that, in addition to his positions and duties held with Alta, Executive
also serves as the Chief Executive Officer of PMH.

 

c.             The Original Agreement (as amended by the First Amendment) was
further amended by that certain Second Amendment to Executive Employment
Agreement, dated July 8, 2008 (the “Second Amendment”), by and among PMH, Alta
and Executive, which amendment principally provided for a new base salary for
Executive and a one-time “Turnaround Services Bonus.”

 

d.             PMH, Alta and Executive wish to amend the Original Agreement, as
amended by the First Amendment and the Second Amendment (the “Employment
Agreement”), as set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby covenant and agree
as follows:

 

1.             Amendments.

 

(a)         Base Salary.  Section 4.a. of the Employment Agreement is hereby
amended and restated to read, in its entirety, as follows:

 

“a.         Base Salary.  PMH shall pay Executive a base salary of Seven Hundred
Fifty Thousand Dollars ($750,000) per annum (the “Base Salary”), effective
retroactively as of October 1, 2008.  Payments shall be made in periodic
installments in accordance with the normal payroll practices of PMH, as such may
be changed from time to time.  The Base Salary may be increased but not
decreased.”

 

(b)           EBITDA Bonuses.

 

 

 

(i)

The heading for Section 4.e., which currently reads “EBITDA Based Bonus,” is
hereby amended and restated to read “EBITDA Based Bonuses.”

 

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(ii)

The remainder of Section 4.e. shall constitute a new Section 4.e.i. and shall be
preceded with the following new heading: “Alta EBITDA Based Bonus.”

 

 

 

 

 

 

(iii)

All references to “EBITDA Bonus” in such new Section 4.e.i. are hereby amended
and restated to refer to “Alta EBITDA Bonus.”

 

 

 

 

 

 

(iv)

A new Section 4.e.ii. is hereby added to the Employment Agreement, which shall
read, in its entirety, as follows:

 

 

 

 

 

 

 

“ii.     PMH EBITDA Based Bonus. Executive shall be entitled to receive, on an
annual basis, a bonus (the “Prospect EBITDA Bonus”) determined in accordance
with criteria regarding the attainment of certain EBITDA targets by PMH, which
criteria and targets shall be established by the Compensation Committee of the
Board of Directors of PMH. The Prospect EBITDA Bonus and the Alta EBITDA Bonus
shall each be referred to herein as an “EBITDA Bonus.”

 

(c)         Discretionary Bonus.  Section 4.f. of the Employment Agreement is
hereby amended and restated to read, in its entirety, as follows:

 

“f.            Discretionary Bonus.  Executive shall be eligible for
discretionary bonuses (each, a “Discretionary Bonus”) at such times and in such
amounts, if any, as determined in the sole discretion of the Compensation
Committee of PMH’s Board of Directors.”

 

2.             Full Force and Effect.  Except as provided in Section 1 above,
the Employment Agreement shall remain in full force and effect.

 

3.             Governing Law.  This Third Amendment shall be governed by and
construed in accordance with the laws of the State of California without regard
to conflicts of laws provisions which could cause the application of the law of
any jurisdiction other than the State of California.

 

4.             Counterparts.  This Third Amendment may be executed by facsimile
or portable document format (PDF) signature in one or more counterparts, all of
which when taken together shall constitute a single agreement.

 

[signature page follows]

 

2

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IN WITNESS WHEREOF, the parties hereto have duly executed this Third Amendment
to Executive Employment Agreement as of the day and year first written above.

 

 

 

EXECUTIVE

 

 

 

 

 

    /s/ Samuel S. Lee

 

Samuel S. Lee

 

 

 

 

 

PROSPECT MEDICAL HOLDINGS, INC.

 

 

 

 

 

By:

    /s/ Mike Heather

 

Name: Mike Heather

 

Title: Chief Financial Officer

 

 

 

 

 

ALTA HOSPITALS SYSTEM, LLC

 

 

 

 

 

By:

    /s/ Becky Levy

 

Name: Becky Levy

 

Title: Chief Financial Officer

 

 

[Signature Page to Third Amendment to Executive Employment Agreement]

 

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