exv10w15






EXHIBIT 10.15




AMENDMENT NO. 2 TO

SENIOR MANAGEMENT AGREEMENT




     THIS AMENDMENT NO. 2 TO SENIOR MANAGEMENT AGREEMENT (this “Amendment”, dated as of
September 1, 2010, is made by and among Capella Holdings, Inc., a Delaware corporation (the
“Company”), Capella Healthcare, Inc., a Delaware corporation (“Employer”), and James Thomas
Anderson (“Executive”), and GTCR fund VIII, L.P., a Delaware limited partnership (the
“Majority Holder”).



RECITALS




     WHEREAS, the Company, Employer and Executive entered a Senior Management Agreement, dated as
of May 4, 2005, and its Amendment No. 1, dated as of May 12, 2006 (as amended, the “Senior
Management Agreement”), and



     WHEREAS, the Company, Employer, Executive and the Majority Holder desire to amend the Senior
Management Agreement as set forth herein pursuant to Section 11(k) of the Senior Management
Agreement;



     NOW, THEREFORE, in consideration of the foregoing recitals, which shall constitute a part of
this Amendment, and the mutual promises contained in this Amendment, and intending to be legally
bound thereby, the parties agree as follows:



     1. Paragraph 6 of the Senior Management Agreement is deleted in its entirety and replaced with
the following provision:



          6. Employment. Employer agrees to employ Executive and Executive accepts such
employment for the period beginning as of September 1, 2010, the Employment Date, and ending upon
the termination of the Agreement as set out in Paragraph 6(e) below (the “Employment
Period”). Except as otherwise provided herein, any termination of the Employment Period by
Employer shall be effective as of the date specified in a written notice from Employer to
Executive.




          (a) Positions and Duties.





     (i) During the Employment Period, Executive shall no longer serve as the
President of the Company but shall assume a new title and position of “Vice-Chair
and Co-Founder” and shall have the duties, responsibilities and authority assigned
or delegated by the Board or the Chief Executive Officer; provided however, that he
shall be relieved of administrative duties and shall be assigned tasks primarily in
connection with acquisitions and development.




     (ii) Executive shall report to the Chief Executive Officer, and Executive shall
devote his best efforts and his full business time and attention to the business and
affairs of the Company, Employer and their Subsidiaries.



 









 






     (iii) During the Employment Period, Executive shall continue to serve on the
Board and Majority Holder shall cause Executive to continue to be elected as one of
the directors of Employer and Company.



          (b) Salary, Bonus and Benefits. Employer will pay Executive for 12 months an initial
base salary of $400,000 per annum or such other higher rate as the Board may determine from time to
time (the “Annual Base Salary”), which salary shall be payable by Employer in regular
installments in accordance with Employer’s general practices (in effect from time to time). In
addition to the Annual Base Salary, for the 2010 fiscal year only, Executive shall be eligible for
an annual base bonus (the “Annual Bonus”) following the end of the fiscal year of the
Company ending December 31, 2010 of up to 100% of the Annual Base Salary, as determined by the
Board in its sole discretion based upon achievement by Executive and achievement by the Company,
Employer and their Subsidiaries of performance criteria and other goals established by the Board
(or the Compensation Committee established by the Board). Any bonus for that period shall be
payable on or prior to March 15, 2011. In addition, during the Employment Period, Executive will be
entitled to such other benefits approved by the Board and made available to the senior management
of the Company, Employer and their Subsidiaries.




          After the initial 12 months, Executive’s Annual Base Salary shall be $100,000 annually.




          During the Employment Period, Executive shall also be eligible to earn an “Acquisition Bonus”
of between 0 to 50 basis points (0 — .5%) of the purchase or acquisition price of any transaction
closed and consummated by the Company, Employer or one of their Subsidiaries. The amount of such
bonus will be in the discretion of the Board and with consideration of the recommendation of the
Chief Executive Officer. Any Acquisition Bonus shall include consideration of the below criteria,
as well as the overall contribution made by Executive to completion of the transaction and its
potential value to the Company, Employer, or one of their Subsidiaries:





     (i) The time, extent and substance of Executive’s actual involvement in the
transaction;




     (ii) Executive’s involvement in the transaction relative to other employees or
agents of the Company and Employer;




     (iii) Transaction lead generation and role in the introduction of the
acquisition opportunity




	 	a.	 	role in the initial contact with
a potential seller;
	 
	 	b.	 	the involvement prior to a
proposal, such as in site visits, presentations to facility
representatives, and other general and meaningful interaction.






     (iv) Involvement in the coordination/review of due diligence;




     (v) Involvement in the development of a proposal, including



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	 	a.	 	the formulation, development or
review of a strategic proposal;
	 
	 	b.	 	the presentation of proposal to
facility decision makers and/or brokers.






     (vi) Involvement in the negotiation of definitive agreement, including




	 	a.	 	Discussions with Sellers relative
to definitive agreement;
	 
	 	b.	 	Negotiation of terms leading to
execution of definitive agreement;
	 
	 	c.	 	Review of drafts/participation in
drafting calls/sessions.






     (vii) Meaningful involvement in closing process.



     Any such Acquisition Bonus shall be paid within 60 days following the closing of any such
transaction.



          (c) During the Employment Period, Employer shall reimburse Executive for all reasonable
business expenses incurred by him in the course of performing his duties and responsibilities under
this Agreement which are consistent with Employer’s policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to Employer’s requirements
with respect to reporting and documentation of such expenses.




          (d) All amounts payable to Executive as compensation hereunder shall be subject to all
required and customary withholding by Employer.




          (e) Termination of Employment Period. The Employment Period will continue until the
first of the following events occurs:





	 	(i)	 	Executive’s Disability or death,
	 
	 	(ii)	 	Executive’s resignation with Good Reason as
defined herein,
	 
	 	(iii)	 	Executive’s resignation without Good Reason as
defined herein,
	 
	 	(iv)	 	the Board’s or Employer’s termination of the
Employment Period with Cause as defined herein,
	 
	 	(v)	 	September 1, 2013,
	 
	 	(vi)	 	Executive or Employer provides written notice
of an intent to terminate this Agreement and the notice is received no
earlier than 3 months, nor later than 9 months, following the closing
of a Public Offering as defined in Section 9 below.




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     If the Employment Period ends for a reason set out in Sections (i), (iii) (iv), or (vi) above
prior to the expiration of 36 months from September 1, 2010, Executive’s compensation otherwise due
under Section 6 (b) above shall end. Otherwise, Executive’s compensation under Section 6 (b) shall
continue. At any time, the Parties may undertake discussions of the possibility and desire to renew
or extend this Agreement, any such renewal or extension to be upon mutually acceptable terms and
conditions and in writing signed by all signatories hereto.



     2. Paragraph 8(a) is amended by removing the words “for a period of one year” and substituting
the words “for the period during which Executive is receiving payments hereunder, plus one year”.



     3. Paragraph 8(b) is amended by removing the words “for a period of one year” and substituting
the words “for the period during which Executive is receiving payments hereunder, plus one year”.



     4. Paragraph 9 is amended by adding the definition of “Acquisition Bonus” as designated in
Paragraph 6(b) above.



     5. Paragraph 3(j) is deleted in its entirety.



     6. Paragraph 2(b) is amended to provide that the Time Shares and Performance Shares shall
continue to vest at the same rate as in the original Agreement.



     7. Paragraph 3(a) is amended to provide as follows:




	 	(a)	 	In the event Executive resigns from employment with the Company
and does not do so for Good Reason or is discharged for Cause (the
“Separation”), the Executive Securities whether held by Executive or one or
more of Executive’s transferees, other than the Company and the Investors) will
be subject to repurchase, in each case by the Company and the Investors
pursuant to the terms and conditions set forth in this Section 3 (the
“Repurchase Option”). The Company may assign its repurchase rights set forth in
this Section 3 to any Person.





     8. Section 3 is amended to add the following Paragraph 3(l):




	 	(1)	 	Notwithstanding any provision of this Agreement to the
contrary, from and after the date hereof, Executive may elect to require the
Company to purchase, and the Company shall in the event of such an election
purchase from the Executive, the shares of Preferred Stock owned by him as of
the date hereof, pursuant to the terms and conditions of a Redemption Agreement
in substantially the form attached hereto as Exhibit 3(l). The closing of such
purchase shall occur within 30 days of the date of receipt of such notice by
the Company from the Executive.





     9. Ratification. All other paragraphs, provisions, and clauses in the Senior
Management Agreement not so modified remain in full force and effect.



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     10. Defined Terms. Certain capitalized terms not defined herein shall have the
meanings given to such terms in the Senior Management Agreement.



     11. Counterparts. This Amendment may be executed in one or more counterparts, each of
which is an original, but all of which together constitute one and the same instrument. Any
counterpart may be executed by facsimile signature and such facsimile signature shall be deemed an
original.



     12. Governing Law; Binding Agreement. All questions concerning the construction,
validity, enforcement and interpretation of this Amendment shall be governed by the internal law of
the State of Delaware without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of Delaware of any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Delaware.



*     *     *     *




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



	 	 	 	 	 	 	 

	 	 	CAPELLA HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Daniel S. Slipkovich 	 	 
	 

	 	Name:
	 	 

Daniel S. Slipkovich
	 	 
	 

	 	Its:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CAPELLA HEALTHCARE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Daniel S. Slipkovich 	 	 
	 

	 	Name:
	 	 

Daniel S. Slipkovich
	 	 
	 

	 	Its:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ James Thomas Anderson 	 	 
	 	 	James Thomas Anderson	 	 






	 	 	 	 	 

	Agreed and Accepted by:	 	 
	 
	 	 	 	 
	GTCR FUND VIII, L.P., as Majority Holder	 	 
	 
	 	 	 	 
	By:

	 	GTCR Partners VIII, L.P.	 	 
	Its:

	 	General Partner	 	 
	 
	 	 	 	 
	By:

	 	GTCR Golder Rauner, II, L.L.C.	 	 
	Its:

	 	General Partner	 	 
	 
	 	 	 	 
	By:
	 	/s/ Joseph P. Nolan 	 	 
	Name:

	 	Joseph P. Nolan
 	 	 
	Its:

	 	 

Principal
	 	 






Signature Page to Amendment No. 2 to Senior Management Agreement




 









 








Exhibit 3(1)




Redemption Agreement


See attached.




Signature Page to Amendment No. 2 to Senior Management Agreement






 









 








FORM OF

REDEMPTION AGREEMENT




     THIS REDEMPTION AGREEMENT (“Agreement”) is made and entered into this _______ day of
____________ 20____, by and between Capella Holdings, Inc., a Delaware corporation (the
“Company”), and J. Thomas Anderson (“Executive”) a resident of the State of
Tennessee.



     WHEREAS, Executive owns ___________ shares of preferred stock of the Company (collectively,
the “Preferred Stock”); and



     WHEREAS, the Company desires to redeem and Executive desires to sell the Preferred Stock to
the Company pursuant to the terms and conditions contained herein.



     NOW, THEREFORE, in consideration of the premises, the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of all of which are hereby
acknowledged, the parties agree as follows:



     1. Redemption. Subject to the terms and conditions of this Agreement, the Company
shall redeem and Executive shall sell, transfer, convey and surrender to the Company the Preferred
Stock and to deliver the certificates evidencing the Preferred Stock for an aggregate consideration
of $ _____________ [to be calculated at $1,000 per share] (the “Preferred Stock Redemption
Price”) to be paid in cash upon execution of this Agreement and delivery of the certificates
representing the Preferred Stock.



     2. Delivery of Certificates. Upon execution of this Agreement and as a condition to
the Company redeeming the Preferred Stock and delivering the Preferred Stock Redemption Price,
Executive shall surrender to the Company the certificates representing the Preferred Stock. The
certificates shall be properly endorsed for transfer or shall be accompanied by a stock power duly
executed by Executive for transfer to the Company.



     3. Representations and Warranties of Executive. Executive hereby represents and
warrants that as of the date of this Agreement: (i) he is the sole owner of the Preferred Stock
and, except for ______________ shares of common stock of the Company, the Preferred Stock
represents all of the outstanding shares of capital stock owned by him in the Company; (ii) all of
the Preferred Stock is and will be free and clear of liens, claims, restrictions, adverse rights or
encumbrances of any kind; (iii) he has the right and authority to transfer the Preferred Stock to
the Company; (iv) he has full power and authority to execute, deliver and perform his obligations
under this Agreement and, when executed and delivered by him, this Agreement shall constitute the
valid and binding legal obligation of him enforceable in accordance with the terms hereof; and (v)
the execution and delivery of this Agreement, and the performance of Executive’s obligations
hereunder, will not constitute a breach, violation of, default or cause acceleration of performance
under any contract, lease, bond, mortgage, indenture or other agreement to which he is a party or
by which he and his assets are bound.



     4. Representations and Warranties of Company. The Company hereby represents and
warrants that: (i) its execution and delivery of this Agreement, and its performance of the



Signature Page to Amendment No. 2 to Senior Management Agreement




 









 




transactions contemplated hereby, will not constitute a breach, violation of, default or cause
acceleration of performance under any contract, lease, bond, mortgage, indenture or other agreement
to which the Company is a party or by which it and its assets are bound; (ii) the Company is not
aware of any fact, circumstance, condition or other circumstance, whether pending or threatened,
which is unknown by Executive and which might have any material effect, whether positive or
negative, upon the financial condition of the Company or its business operations. To the best of
the Company’s knowledge, information and belief, the financial statements, tax returns and other
financial books and records of the Company are true and correct in all material respects.




     5. Acknowledgement. Executive and the Company each acknowledge that they have had the
opportunity to obtain independent advice regarding the valuation of the Preferred Stock as well as
the opportunity to obtain independent legal advice regarding the terms and conditions of this
Agreement. Executive and the Company each acknowledge that they believe that the Preferred Stock
Redemption Price is fair and reasonable taking into account the percentage of ownership represented
by the Preferred Stock, the current financial condition of the Company, the current prospects for
the Company and its business operations, and the absence of any known or anticipated material
events which might affect the valuation of the Preferred Stock.



     6. Cooperation; Deliveries. The parties agree that they will fully cooperate with each
other in connection with any steps required to be taken as part of their obligations under this
Agreement, and to effect the redemption by the Company of the Preferred Stock, including the
execution and delivery of such documents and the taking of such action as shall reasonably be
requested by one party or the other.



     7. Conditions to Performance. The obligation of the Company to perform hereunder shall
be conditioned upon delivery by Executive of all certificates representing the Preferred Stock. The
obligation of Executive to perform hereunder shall be conditioned upon delivery by the Company of
the Preferred Stock Redemption Price.



     8. Entire Agreement. Other than the Senior Management Agreement, as amended, among the
parties and Capella Healthcare, Inc., this Agreement constitutes the entire agreement between the
parties with respect to its subject matter and may not be modified or amended orally.



     9. Assignment. The rights and benefits of Executive under this Agreement, are personal
to him and shall not be assignable. Discharge of Executive’s undertakings shall be an obligation of
Executive’s executors, administrators, or other legal representatives or heirs.



     10. Headings. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.



     11. 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 be one and the same instrument.
In making proof of this Agreement, it shall not be necessary to produce or account for more than
one such counterpart executed by the party against whom enforcement of this Agreement is sought.



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     12. Binding Effect. The provisions of this Agreement shall be binding upon and inure
to the benefit of each of the parties and their respective heirs, successors and assigns.



     13. Governing Law. This Agreement shall be construed in accordance with and governed
by the laws of the State of Delaware.



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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date stated above.



	 	 	 	 	 	 	 

	 	 	CAPELLA HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	J. Thomas Anderson	 	 







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