exv10w1



 






Exhibit 10.1




SECOND AMENDMENT TO THE

UNITED SURGICAL PARTNERS INTERNATIONAL, INC.

2001 EQUITY-BASED COMPENSATION PLAN




      THIS SECOND AMENDMENT is made and effective as of May 3, 2005 (the “Effective Date”) by United
Surgical Partners International, Inc., a Delaware corporation (the “Company”).



WITNESSETH:




      WHEREAS, the Company sponsors the United Surgical Partners International, Inc. 2001
Equity-Based Compensation Plan (the “Plan”) for the benefit of its eligible employees and their
beneficiaries;



      WHEREAS, pursuant to Section 10(c) of the Plan the Board of Directors of the Company (the
“Board”) may amend or alter the Plan without the consent of stockholders or participants, provided
that, any such amendment or alteration, including any increase in any share limitation, shall be
subject to the approval of the Company’s stockholders not later than the annual meeting next
following such Board action if such stockholder approval is required by any federal or state law or
regulation or the rules of The NASDAQ Stock Market, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to stockholders for approval; provided further
that, without the consent of an affected participant, no such Board action may materially and
adversely affect the rights of any participant under any previously granted and outstanding award;



      WHEREAS, pursuant to Section 2(g)(ii) of the Plan, a change in control of the Company may
result from a transition in the members of the Board;



      WHEREAS, the Board believes it is in the best interest of the Company to revise the criteria
for determining when a transition in the members of the Board constitutes a change in control of
the Company;



      WHEREAS, the Plan currently contains a reference to a Securities and Exchange Commission rule
that is not applicable to the company while its equity securities are publicly traded;



      WHEREAS, the Board believes the Plan should be revised to remove the reference to the
currently inapplicable Securities and Exchange Commission rule;



      WHEREAS, the Plan provides that all officers, employees and other service providers of the
Company and its subsidiaries are eligible to receive awards under the Plan;



      WHEREAS, the Board believes it is in the best interest of the Company to allow the
stockholders of the Company to reapprove the eligibility provisions of the Plan;



      WHEREAS, Section 5 of the Plan provides that in each fiscal year during any part of which the
Plan is in effect, individuals who may subject the Company to the deduction



1








 






limitations provided in section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”) may not be granted awards relating to more than 300,000,000 shares of Stock;




      WHEREAS, the Board believes it is in the best interest of the Company to provide that in each
fiscal year of the Company, during any part of which the Plan is in effect, individuals who may
subject the Company to the deduction limitations provided in section 162(m) of the Code may not be
granted awards relating to more than 150,000 shares of Stock or, in the case of awards the value of
which is not directly related to the value of the Stock, awards the value of which at the time of
payment exceeds $7,500,000;



      WHEREAS, the Plan provides several business criteria on which the grant and/or settlement of
awards may be based if (1) the Company’s options and compensation committee (the “Committee”)
determines that an award to any participant should be so conditioned or (2) the Committee
determines that an award granted to an officer of the Company, who may subject the Company to the
deduction limitations of section 162(m) of the Code, should qualify as “performance-based
compensation” for purposes of section 162(m) of the Code;



      WHEREAS, the Board believes it is in the best interest of the Company to allow the
stockholders of the Company to reapprove the business criteria on which the grant and/or settlement
of awards may be based;



      WHEREAS, Section 9(c) of the Plan provides that upon a change in control of the Company, the
Committee shall have certain powers to modify awards that include the power to (1) accelerate the
vesting schedule associated with any awards, (2) require the mandatory surrender of options for
cash consideration, and (3) make any other such revisions to options as the Committee deems
appropriate; and



      WHEREAS, the Board believes it is in the best interest of the Company to specifically provide
that the right to make other revisions to options as the Committee deems appropriate upon a change
in control includes the right to modify options to allow for the substitution of a successor
company’s security, or other consideration that may be received by the Company’s stockholders in
connection with a change in control, upon exercise of the options.



      NOW, THEREFORE, the Plan is hereby amended as follows:



      1. Section 2(g)(ii) is hereby amended in its entirety as of the Effective Date, to read as
follows:




   (iii) A majority of the members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority of
the members constituting the Board prior to the date of the appointment or election;



      2. Section 2(ee) is hereby removed in its entirety as of the Effective Date.



      3. Section 5 is hereby amended in its entirety as of the Effective Date, to read as follows:



2








 








   5. Eligibility; Per Person Award Limitations. Awards may be granted under this
Plan only to Eligible Persons. In each fiscal year during any part of which this
Plan is in effect, a Covered Employee may not be granted Awards relating to more
than 150,000 shares of Stock, subject to adjustment in a manner consistent with any
adjustment made pursuant to Section 9, and in the case of Awards the value of which
is not directly related to the value of the Stock, Awards the value of which at the
time of payment exceeds $7,500,000.



      4. Sections 2(o) and 8(b) of the Plan shall continue to read in its current state.



      5. Section 9(c) is hereby amended in its entirety as of the Effective Date, to read as
follows:




   (c) Corporate Restructuring. If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital structure (a
“recapitalization”), the number and class of shares of Stock covered by an Option
theretofore granted shall be adjusted so that such Option shall thereafter cover the
number and class of shares of stock and securities to which the holder would have
been entitled pursuant to the terms of the recapitalization if, immediately prior to
the recapitalization, the holder had been the holder of record of the number of
shares of Stock then covered by such Option and the share limitations provided in
Sections 4 and 5 shall be adjusted in a manner consistent with the recapitalization.
Upon a Change in Control the Committee, acting in its sole discretion without the
consent or approval of any holder, shall effect one or more of the following
alternatives, which may vary among individual holders and which may vary among
Options held by any individual holder: (1) accelerate the time at which Options then
outstanding may be exercised so that such Options may be exercised in full for a
limited period of time on or before a specified date (before or after such Change in
Control) fixed by the Committee, after which specified date all unexercised Options
and all rights of holders thereunder shall terminate, (2) require the mandatory
surrender to the Company by selected holders of some or all of the outstanding
Options held by such holders (irrespective of whether such Options are then
exercisable under the provisions of this Plan) as of a date, before or after such
Change in Control, specified by the Committee, in which event the Committee shall
thereupon cancel such Options and pay to each holder an amount of cash per share
equal to the excess, if any, of the amount calculated in Section 9(d) (the “Change
in Control Price”) of the shares subject to such Option over the exercise price(s)
under such Options for such shares, or (3) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Change in Control,
provided, however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding; provided further, however, that
the right to make such adjustments shall include, but not be limited to, the
modification of an option such that the holder of the option shall be entitled to
purchase or receive (in lieu of the total shares that the holder would otherwise be
entitled to purchase or receive (the “Total Shares”)), the number of shares of
stock, other securities, cash or property to which the Total Shares would have been
entitled to in connection with the



3








 








Change in Control, at an aggregate exercise price equal to the exercise price
that would have been payable if the Total Shares had been purchased on the exercise
of the Option immediately before the consummation of the Change in Control.



      NOW, THEREFORE, be it further provided that, except as provided above, the Plan shall continue
to read in its current state.



      IN WITNESS WHEREOF, this Second Amendment has been executed by a duly authorized officer of
the Company as of the date set forth in the introductory paragraph and effective as set forth
herein.


	 	 	 	 	 
	 	UNITED SURGICAL PARTNERS INTERNATIONAL, INC., 
a
Delaware corporation

 	 
	 	By:  	/s/ John J. Wellik  	 
	 
	 	Name:  	John J. Wellik 	 
	 
	 	Title:  	Senior Vice President 
	 





4