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.”

  



 

















 


	
   

  	
   

  	
  (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

















 


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]