Unassociated Document


     

    Exhibit
      10.47

    
 

    EMPLOYMENT
      AGREEMENT

     

    


    THIS
      EMPLOYMENT AGREEMENT
      (the
“Agreement”),
      is
      dated as of April 3, 2006, by and between NovaMed Management Services, LLC,
      a
      Delaware limited liability company (the “Company”)
      and a
      wholly owned subsidiary of NovaMed, Inc., and Jack Clark (“Employee”).

     

    PRELIMINARY
      RECITALS

     

    A. The
      Company is engaged in the business of: (i) owning, operating and/or managing
      ambulatory surgery centers and other outpatient surgical facilities, optical
      dispensaries, wholesale optical laboratories, an optical supplies and equipment
      purchasing organization and a marketing services and products company that
      provides marketing services and products to eye care providers; and (ii)
      providing comprehensive eye care services to eye care providers and businesses
      ancillary thereto, including, without limitation, providing financial,
      administrative, information technology, marketing and managed care services
      and
      ophthalmic surgical equipment to ophthalmic and optometric providers
      (collectively, the “Business”).

    


    B. The
      Company desires to employ Employee, and Employee desires to be employed by
      the
      Company, as an Executive Vice President of the Company on the terms and
      conditions contained herein.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises, the mutual covenants of the parties hereinafter
      set forth and other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the parties hereto agree as
      follows:

    


    ARTICLE
      I

    Employment

     

    1.1. Engagement
      of Employee.
      The
      Company agrees to employ Employee, and Employee accepts such employment by
      the
      Company, for the period beginning April 3, 2006 (the “Effective
      Date”)
      and
      ending on April 2, 2010 (the “Initial
      Employment Period”).
      THE
      INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL PERIOD (AS HEREINAFTER DEFINED) SHALL
      AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED
      HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (THE “RENEWAL
      PERIODS”),
      UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT
      PERIOD OR ANY RENEWAL PERIOD, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO SUCH
      OTHER PARTY ELECTING TO TERMINATE THIS AGREEMENT. The Initial Employment Period
      and the Renewal Periods are hereinafter referred to as the “Employment
      Period.”
For
      purposes of this Agreement, any notice of termination electing not to renew
      this
      Agreement pursuant to this Section
      1.1
      shall be
      deemed: (i) a termination without Cause if such notice is delivered by the
      Company; or (ii) a voluntary termination of employment if such notice is
      delivered by Employee; provided, however, that if the Employment Period is
      terminated pursuant to this Section
      1.1
      by
      Employee (except as provided in Section
      3.4),
      then
      notwithstanding Article
      III,
      the
      Company shall have no further obligations hereunder or otherwise with respect
      to
      Employee’s employment from and after the expiration of the Employment Period
      (except payment of Employee’s Base Salary accrued through the expiration of the
      Employment Period). Notwithstanding anything to the contrary contained herein,
      the Employment Period is subject to termination pursuant to Article
      III below.
      

     

    
      
        
        

      

      
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    1.2. Duties
      and Powers.
      During
      the Employment Period, Employee will have such responsibilities, duties and
      authorities, and will render such services or act in such other capacity for
      the
      Company and its affiliates as the Board of Directors (the “Board”)
      of
      NovaMed, Inc. (the “Parent”),
      the
      manager and parent of the Company (or any designated officer of the Parent
      or
      the Company), may from time to time direct. Employee will devote his best
      efforts, energies and abilities and his full business time, skill and attention
      (except for permitted vacation periods and reasonable periods of illness or
      other incapacity) to the business and affairs of the Company, and shall perform
      the duties and carry out the responsibilities assigned to him, to the best
      of
      his ability, in a diligent, trustworthy, businesslike and efficient manner
      for
      the purpose of advancing the Company. Employee acknowledges that his duties
      and
      responsibilities will require his full-time business efforts and agrees that
      during the Employment Period he will not engage in any other business activity
      or have any business pursuits or interests except activities or interests which
      do not conflict with the business of the Company, the Parent and any of their
      affiliated entities or interfere with the performance of Employee’s duties
      hereunder. 

     

    1.3. No
      Violation.
      Employee represents and warrants that the execution of this Agreement by
      Employee and the performance by Employee of his duties as an employee of the
      Company will not violate, conflict with or result in a breach or default under
      any agreements, arrangements or understandings to which Employee is or was
      a
      party, or by which he is or was bound, nor will the performance of Employee’s
      duties as an employee of the Company be limited, restricted or impaired in
      any
      manner as a result of any agreements, arrangements or understandings to which
      Employee is or was a party.

     

    ARTICLE
      II

    Compensation

     

    2.1. Base
      Salary.
      During
      the Employment Period, the Company will pay Employee a base salary at the rate
      of $245,000 per annum (which annual base salary, as increased from time to
      time
      in accordance with this Section
      2.1,
      shall
      be referred to herein as the “Base
      Salary”),
      payable in regular installments in accordance with the Company’s general payroll
      practices for salaried employees. If the Employment Period is terminated
      pursuant to Section
      3
      (subject
      to any severance provisions in Section
      3.3 or
      Section 3.4),
      Employee’s Base Salary for any partial year will be prorated based upon the
      number of days elapsed in such year during which services were actually
      performed by Employee. The Board or any designated officer shall
      perform an annual review of Employee’s Base Salary based on Employee’s
      performance of his duties and the Company’s other compensation policies;
      provided that any increase in the Base Salary shall require approval of the
      Board or its Compensation Committee.

     

    2.2. Discretionary
      Bonus.
      Following the end of each fiscal year, the Board or its Compensation Committee,
      in its sole discretion, may elect to cause the Company to award to Employee
      a
      bonus for such year, in an amount to be determined by the Board or its
      Compensation Committee, based on such performance targets as shall be
      established, and adjusted from time to time, by the Board or its Compensation
      Committee. 

     

    
      
        
        

      

      
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    2.3. Benefits.
      In
      addition to the Base Salary payable to Employee hereunder, Employee will be
      entitled to the following benefits during the Employment Period, unless
      otherwise altered by the Board with respect to all management employees of
      the
      Company (collectively, the “Benefits”):

     

    (a) hospitalization,
      disability, life and health insurance, to the extent offered by the Company
      and
      subject to the Company’s policies in effect from time to time, and in amounts
      consistent with Company policy, for all management employees, as reasonably
      determined by the Board;

     

    (b) four
      (4)
      weeks paid vacation each year with salary, consistent with Company policy for
      all management employees;

     

    (c) reimbursement
      for reasonable out-of-pocket business expenses incurred by Employee in the
      ordinary course of his duties, subject to the Company’s policies in effect from
      time to time with respect to travel, entertainment and other expenses, including
      without limitation, requirements with respect to reporting and documentation
      of
      such expenses;

     

    (d) other
      benefit arrangements to the extent made generally available by the Company
      to
      its management employees; and

     

    (e) participation
      in the Parent’s Stock Incentive Plan or an equivalent plan such that Employee is
      granted options to purchase an amount of the common equity interest in the
      Parent consistent with the determination of the Board or its Compensation
      Committee pursuant to such plan.

     

    2.4. Taxes,
      etc.
      All
      compensation payable to Employee hereunder is stated in gross amount and shall
      be subject to all applicable withholding taxes, other normal payroll and any
      other amounts required by law to be withheld. 

     

    ARTICLE
      III

    Termination

     

    3.1. Termination
      By Employee or the Company.
      The
      Employment Period (i) shall automatically terminate immediately upon Employee’s
      resignation or death, or (ii) may be terminated immediately by the Company
      as
      set forth herein for Cause or without Cause, or by reason of Employee’s
      Permanent Disability. 

     

    “Cause”
as
      used
      herein means the occurrence of any of the following events:

    


    (a) a
      material breach by Employee of any of the terms and conditions of this
      Agreement; provided that Employee shall have a reasonable period of time during
      which to cure such material breach following the date on which Employee receives
      the Company’s written notice of such material breach;

     

    
      
        
        

      

      
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    (b) Employee’s
      material failure or willful refusal to substantially perform his duties;
      provided that Employee shall have a reasonable period of time during which
      to
      cure such failure following the date on which Employee receives the Company’s
      written notice of such failure;

     

    (c) Employee’s
      failure, as notified by the Company in writing, to comply with any of the
      Company’s written guidelines or procedures promulgated by the Company and
      furnished to Employee, including, without limitation, any guidelines or
      procedures relating to marketing or community relations; provided that Employee
      shall have a reasonable period of time during which to cure such failure
      following the date on which Employee receives the Company’s written notice of
      such failure; or

     

    (d) the
      determination by the Board in the exercise of its reasonable judgment that
      Employee has committed an act or acts constituting a felony or other act
      involving dishonesty, disloyalty or fraud against the Company.

     

    “Permanent
      Disability”
as
      used
      herein shall mean that Employee is unable to perform, with or without reasonable
      accommodation, by reason of physical or mental incapacity, the essential
      functions of his or her position. The Board shall determine, according to the
      facts then available, whether and when a Permanent Disability has occurred.
      Such
      determination shall not be arbitrary or unreasonable, and shall be final and
      binding on the parties hereto.

    


    3.2. Termination
      by Employee.
      Employee has the right to terminate his employment under this Agreement at
      any
      time, for any or no reason, upon ninety (90) days written notice to the Company;
      provided, however, that such ninety (90) day notice is not required for a
      termination of employment during the Window Period (as defined in Section
      3.4(g)).

     

    3.3. Compensation
      After Termination.

     

    (a) Except
      as
      described in Section
      3.4
      hereof,
      or except as may be specifically required by law, if the Employment Period
      is
      terminated (i) by the Company for Cause or due to the death or Permanent
      Disability of Employee, or (ii) by Employee (including a termination resulting
      from Employee’s election not to renew this Agreement under Section
      1.1 hereof),
      then the Company shall have no further obligations hereunder or otherwise with
      respect to Employee’s employment from and after the termination or expiration
      date (except payment of Employee’s Base Salary accrued through the date of
      termination or expiration), and the Company shall continue to have all other
      rights available hereunder (including, without limitation, all rights under
      Article
      IV hereof)
      at law or in equity;

     

    (b) Except
      as
      described in Section
      3.4
      hereof,
      if the Employment Period is terminated by the Company without Cause (including
      a
      termination resulting from the Company’s election not to renew this Agreement
      under Section
      1.1
      hereof):
      (i) Employee shall be entitled to receive all items described in Section
      3.3(a)
      above;
      and (ii) subject to the conditions hereinafter set forth, Employee shall be
      entitled to receive as severance compensation, the following (collectively,
      the
“Severance
      Pay”):
      (A)
      Employee’s then-current monthly Base Salary hereunder for a period of twelve
      (12) months (such time period to be hereinafter referred to as the “Severance
      Period”
(unless
      modified by Section
      3.4)),
      payable in regular installments in accordance with the Company’s general payroll
      practices for salaried employees; (B) the bonus, if any, that Employee would
      have been entitled under Section
      2.2
      hereof
      at the end of the year during which the termination without Cause occurs had
      such termination not occurred, which bonus shall be (1) prorated based on the
      amount of time that Employee was employed by the Company during the year (not
      including the Severance Period) for which such bonus is being calculated, and
      (2) determined and paid to Employee contemporaneously with the determination
      and
      payment of bonuses for comparable employees of the Company; and (C) continuation
      of the welfare benefits described in Section
      2.3(a)
      for the
      Severance Period, to the extent permissible under the terms of the relevant
      benefit plans. The bonus described in subclause (B) above shall not be the
      “Target Bonus” (as defined in Section
      3.4(b)),
      but
      rather the bonus that would have been payable pursuant to Section
      2.2
      hereof,
      as modified by this Section
      3.3(b).
      Employee’s right to receive Severance Pay hereunder is conditioned upon: (x)
      Employee executing and delivering to the Company a written separation agreement
      and general release of all claims, in form and substance acceptable to the
      Company, which shall among other things, contain a general release by Employee
      of all claims arising out of his employment and termination of employment by
      the
      Company; and (y) Employee’s compliance with all of his obligations which survive
      termination of this Agreement, including without limitation those described
      in
Article
      IV
      below.
      The Severance Pay is intended to be in lieu of all other payments to which
      Employee might otherwise be entitled in respect of his termination without
      Cause. The Company shall have no further obligations hereunder or otherwise
      with
      respect to Employee’s employment from and after the date of termination of
      employment with the Company for any reason (the “Termination
      Date”),
      and
      the Company shall continue to have all other rights available hereunder
      (including without limitation, all rights hereunder (including without
      limitation, all rights under Article
      IV
      hereof)
      at law or in equity. For
      purposes of this Section
      3.3(b)
      only,
      the Severance Period shall increase based on additional years of service by
      Employee as follows: Beginning on April 3, 2007 and each anniversary thereafter
      for so long as Employee continues to be employed by Employer, the Severance
      Period shall be increased by one (1) month every April 3rd
      (e.g.
      on
      April
      3, 2007, the Severance Period shall be increased to thirteen (13) months; on
      April 3, 2008, the Severance Period shall be increased to fourteen (14) months,
      etc.), provided that in no event shall the Severance Period payable under this
      Section
      3.3(b)
      be
      greater than fifteen (15) months.

     

    
      
        
        

      

      
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    3.4. Compensation
      After Termination Following a Change in Control. 

     

    (a) If
      the
      Employment Period is terminated following a Change in Control (as defined below)
      (i) by the Company for Cause or due to the death or Permanent Disability of
      Employee or (ii) by Employee (including a termination resulting from Employee’s
      election not to renew this Agreement under Section
      1.1
      hereof)
      other than for Good Reason (as defined below) or during the Window Period (as
      defined below), then the Company shall have no further obligations hereunder
      or
      otherwise with respect to Employee’s employment from and after the termination
      or expiration date (except payment of Employee’s Base Salary accrued through the
      date of termination or expiration), and the Company shall continue to have
      all
      other rights available hereunder (including without limitation, all rights
      under
Article
      IV
      hereof)
      at law or in equity.

     

    (b) If
      the
      Employment Period is terminated following a Change in Control (i) by the Company
      without Cause (including a termination resulting from the Company’s election not
      to renew this Agreement under Section
      1.1
      hereof)
      or (ii) by Employee for Good Reason, then subject to the conditions described
      in
Section
      3.4(d)
      below,
      Employee shall be entitled to receive the following as Severance Pay in lieu
      of
      any amounts payable under Section
      3.3:
      (A) one
      hundred fifty percent (150%) times the sum of Employee’s Base Salary and Target
      Bonus, payable within 30 days following the Termination Date and (B)
      continuation of the welfare benefits described in Section
      2.3(a)
      for
      eighteen (18) months (the “Severance
      Period”)
      to the
      extent permissible under the terms of the relevant benefit plans. For purposes
      of this Agreement, “Target
      Bonus”
shall
      mean the greater of (x) an amount equal to the bonus that would have been
      payable to Employee following the calendar year in which the Termination Date
      occurs pursuant to the Company’s Executive Compensation Plan (the “Executive
      Plan”),
      based
      on attaining one hundred percent (100%) of Employee’s applicable target measure
      established pursuant to the Executive Plan or (y) thirty-five percent (35%)
      of
      Base Salary. The Target Bonus shall not be adjusted based on whether the Company
      anticipates attaining such target measure as of the Termination Date, whether
      the target measure is ultimately attained or whether any bonus amounts payable
      under the Executive Plan would have ultimately been approved by either the
      Compensation Committee or the Board.

     

    
      
        
        

      

      
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    (c) If
      the
      Employment Period is terminated following a Change in Control by Employee for
      any reason or no reason during the Window Period, then subject to the conditions
      described in Section
      3.4(d)
      below,
      Employee shall be entitled to receive the following as Severance Pay in lieu
      of
      any amounts payable under Section
      3.3:
      (i)
      fifty
      percent (50%) of the
      product of: (x) one hundred fifty percent (150%); multiplied by (y) the sum
      of
      Employee’s Base Salary and Target Bonus,
      payable
      within thirty (30) days following the Termination Date and (ii) continuation
      of
      the welfare benefits described in Section
      2.3(a)
      for nine
      (9) months (the “Severance
      Period”)
      to the
      extent permissible under the terms of the relevant benefit plans.

     

    (d) Employee’s
      right to receive any Severance Pay under Section
      3.4(b)
      or
Section
      3.4(c)
      above is
      conditioned upon (i) Employee executing and delivering to the Company a written
      separation agreement and general release of all claims, in form and substance
      acceptable to the Company, which shall, among other things, contain a general
      release by Employee of all claims arising out of his employment and termination
      of employment by the Company; (ii) Employee’s compliance with all terms of that
      separation agreement and general release; and (iii) Employee’s compliance with
      all of his obligations which survive termination of this Agreement, including
      without limitation those described in Article
      IV
      below.
      The Severance Pay is intended to be in lieu of all other payments to which
      Employee might otherwise be entitled in respect of his termination without
      Cause. The Company shall have no further obligations hereunder or otherwise
      with
      respect to Employee’s employment from and after the Termination Date, and the
      Company shall continue to have all other rights available hereunder (including
      without limitation, all rights under Article
      IV
      hereof)
      at law or in equity.

     

    (e) For
      the
      purpose of this Agreement, a “Change
      in Control”
      means:

     

    (i) the
      acquisition, other than from the Parent, by any individual, entity or group
      (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
      Act of 1934) of beneficial ownership of 30% or more of the then outstanding
      shares of common stock of the Parent or the combined voting power of the then
      outstanding voting securities of the Parent entitled to vote generally in the
      election of directors; provided,
      however,
      that
      any acquisition by the Parent or any of its subsidiaries, or any employee
      benefit plan (or related trust) of the Parent or its subsidiaries, or any
      corporation with respect to which, following such acquisition, more than 50%
      of,
      respectively, the then outstanding shares of common stock of such corporation
      and the combined voting power of the then outstanding voting securities of
      such
      corporation entitled to vote generally in the election of directors is then
      beneficially owned, directly or indirectly, by all or substantially all of
      the
      individuals and entities who were the beneficial owners respectively, of the
      common stock and voting securities of the Parent in substantially the same
      portion as their ownership, immediately prior to such acquisition, of the then
      outstanding shares of common stock of the Parent or the combined voting power
      of
      the then outstanding voting securities of the Parent entitled to vote generally
      in the election of directors as the case may be, shall not constitute a Change
      in Control; or

     

    
      
        
        

      

      
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    (ii) approval
      by the shareholders of the Parent of a reorganization, merger or consolidation
      of the Parent, in each case, with respect to which the individuals and entities
      who were the respective beneficial owners of the common stock and voting
      securities of the Parent immediately prior to such reorganization, merger or
      consolidation do not, following such reorganization, merger or consolidation,
      beneficially own, directly or indirectly, more than 50% of, respectively, the
      then outstanding voting securities entitled to vote generally in the election
      of
      directors, as the case may be, of the corporation resulting from such
      reorganization, merger or consolidation, or a complete liquidation or
      dissolution of the Parent or of the sale or other disposition of all or
      substantially all of the assets of the Parent.

     

    (f) “Good
      Reason” shall
      mean without the written consent of Employee:

     

    (i) a
      material change in Employee’s duties or responsibilities which results in or
      reflects a material diminution of the scope or importance of Employee’s
      position;

     

    (ii) a
      reduction in Employee’s Base Salary;

     

    (iii) a
      material reduction in the level of Benefits available or awarded to
      Employee;

     

    (iv) a
      relocation by the Company of Employee’s primary employment location to a
      location which is more than 50 miles from Employee’s primary employment location
      before the Change in Control; or

     

    (v) any
      failure by the Company to comply with Section
      3.5
      of this
      Agreement.

     

    (g) “Window
      Period”
      shall
      mean the 30-day period following the first anniversary of a Change in
      Control.

     

    
      
        
        

      

      
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    3.5. Special
      Tax Payments.
      

     

    (a) Anything
      in this Agreement to the contrary notwithstanding, if it is determined that
      any
      payment or distribution by the Company to or for the benefit of Employee,
      whether paid or payable or distributed or distributable pursuant to the terms
      of
      this Agreement or otherwise (any such payment or distribution being referred
      to
      herein individually as a “Payment”),
      would
      constitute an “excess parachute payment” within the meaning of Section 280G of
      the Internal Revenue Code of 1986, as amended (the “Code”)
      (or
      any successor provision), the Company will pay Employee an additional amount
      (the “Gross-Up
      Payment”)
      such
      that the net amount retained by Employee after deduction of any excise tax
      imposed under Section 4999 of the Code (or any successor provision), and any
      Federal, state and local income, employment and excise tax imposed upon any
      Gross-Up Payment shall be equal to the Payment. For purposes of determining
      the
      amount of the Gross-Up Payment, Employee shall be deemed to pay Federal income
      tax and employment taxes at the highest marginal rate of Federal income and
      employment taxation in the calendar year in which the Gross-Up Payment is to
      be
      made and state and local income taxes at the highest marginal rate of taxation
      in the state and locality of Employee’s residence on the Termination Date, net
      of the maximum reduction in Federal income taxes that may be obtained from
      the
      deduction of such state and local taxes.

     

    (b) All
      determinations to be made under this Section
      3.5
      will
      initially be made, at the Company’s expense, by the Company’s independent public
      accountant immediately prior to the Change in Control (the “Accounting
      Firm”).
      The
      Accounting Firm shall provide detailed supporting legal authorities,
      calculations and documentation both to the Company and Employee. If the
      Accounting Firm makes the initial determination that no excise tax is payable
      by
      Employee with respect to any Payment, Employee will have the right to dispute
      the determination (a “Dispute”)
      within
      20 business days after receipt by Employee of the Accounting Firm’s
      determination and the related supporting information. The Company will pay
      the
      Gross-Up Payment, if any, as determined by the Accounting Firm, to Employee
      within five business days after Employee’s receipt of the Accounting Firm’s
      initial determination. The existence of a Dispute will in no way affect
      Employee’s right to receive the Gross-Up Payment in accordance with the
      Accounting Firm’s initial determination. If there is no Dispute, the Accounting
      Firm’s initial determination will be binding, final and conclusive upon the
      Company and Employee, subject in all respects, however, to the provisions of
      Sections
      3.5(c) and
      3.5(d),
      below.
      As a result of the uncertainty in the application of Sections 4999 and 280G
      of
      the Code, it is possible that a Gross-Up Payment (or portion thereof) should
      have been made by the Company and was not made (an “Underpayment”).
      If
      upon any reasonable written request by Employee or the Company to the Accounting
      Firm, or upon the Accounting Firm’s own initiative, the Accounting Firm (at the
      Company’s expense) thereafter determines that Employee is required to make
      payment of any excise tax or any additional excise tax, as the case may be,
      the
      Accounting Firm will determine the amount of the Underpayment that has occurred
      and the Company will pay any such Underpayment to Employee promptly. If (i)
      Employee delivers to the Company a notice from the Internal Revenue Service
      stating in effect that an excise tax is due with respect to any Payment, or
      (ii)
      Employee delivers to the Company an opinion of tax counsel selected by Employee
      and acceptable to the Company (and such acceptance may not be unreasonably
      withheld) that all or a portion of a Payment is subject to excise tax and the
      applicable amount of excise tax, in each case, together with a written claim
      based upon such notice or such opinion that there has been an Underpayment
      (a
“Notice
      of Underpayment”),
      the
      Company will promptly, but in no event later than five business days after
      receipt of the Notice of Underpayment, pay to Employee in cash the amount of
      the
      Underpayment set forth in the Notice of Underpayment.

     

    
      
        
        

      

      
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    (c) The
      Company will defend, hold harmless and indemnify Employee on a fully grossed-up
      after tax basis from and against any and all claims, losses, liabilities,
      obligations, damages, interest, penalties, impositions, assessments, demands,
      judgments, settlements, costs and expenses (including reasonable attorneys’,
      accountants’ and experts’ fees and expenses) (collectively, “Damages”)
      with
      respect to any tax liability of Employee resulting from any Underpayment, and
      will promptly, but in no event later than five business days after receipt
      of
      any reasonable notice from Employee to the Company of any claim for Damages,
      pay
      to Employee in cash the amount of Damages set forth in such notice.

     

    (d) If
      any
      Underpayment or Damages are ultimately determined to be less than the applicable
      amount previously paid by the Company to Employee, Employee will promptly pay
      to
      the Company the amount of any overpayment previously paid by the Company to
      Employee with respect to such purported Underpayment or Damages. 

     

    3.6. Code
      Section 409A.
      In the
      event that any amount due to Employee hereunder shall be considered to be
      deferred compensation pursuant to Section 409A of the Code, and it is determined
      by Employee that it is desirable to delay the payment of such amount in order
      to
      comply with the requirements of Section 409A(a)(2)(B)(i) of the Code, then
      the
      Company shall delay the payment of such amount for the shortest amount of time
      necessary to comply with such requirements. The parties agree to make such
      other
      amendments to this Agreement as are necessary to comply with the requirements
      of
      Section 409A of the Code.

     

    ARTICLE
      IV

     

    Restrictive
      Covenants

     

    4.1. Employee’s
      Acknowledgment.
      Employee acknowledges that:

     

    (a) the
      Company is and will be engaged in the Business during the Employment Period
      and
      thereafter;

     

    (b) Employee
      is one of a limited number of persons who will be developing the
      Business;

     

    (c) Employee
      will occupy a position of trust and confidence with the Company after the date
      of this Agreement, and during such period and Employee’s employment under this
      Agreement, Employee will become familiar with the Company’s trade secrets and
      with other proprietary and confidential information concerning the Company
      and
      the Business;

     

    (d) the
      agreements and covenants contained in this Article
      IV are
      essential to protect the Company and the goodwill of the Business and are a
      condition precedent to the Company entering into this Agreement;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (e) Employee’s
      employment with the Company has special, unique and extraordinary value to
      the
      Company and the Company would be irreparably damaged if Employee were to provide
      services to any person or entity in violation of the provisions of this
      Agreement;

     

    (f) Employee
      has means to support himself and his dependents other than by engaging in the
      Business, or a business similar to the Business, and the provisions of this
      Article
      IV will
      not
      impair such ability; and

     

    (g) for
      purposes of this Article
      IV,
      the
      term “Company” shall include the Company, the Parent and any of their respective
      subsidiaries and affiliates.

     

    4.2. Non-Compete.
      Employee hereby agrees that for a period commencing on the date hereof and
      ending on the Termination Date, and thereafter, through the later of (a) the
      period ending on the first anniversary of the Termination Date or (b) the period
      ending at the conclusion of the Severance Period (collectively, the
“Restrictive
      Period”),
      he
      shall not, directly or indirectly, as employee, agent, consultant, stockholder,
      director, co-partner or in any other individual or representative capacity,
      own,
      operate, manage, control, engage in, invest in or participate in any manner
      in,
      act as a consultant or advisor to, render services for (alone or in association
      with any person, firm, corporation or entity), or otherwise assist any person
      or
      entity (other than the Company) that engages in or owns, invests in, operates,
      manages or controls any venture or enterprise that directly or indirectly
      engages or proposes to engage in any element of the Business anywhere within
      a
      100-mile radius of the Chicago metropolitan area or within a 100-mile radius
      of
      any area (or in the event such area is a major city, the metropolitan area
      relating to such city) in which the Company on the Termination Date engages
      in
      any element of the Business (the “Territory”);
      provided, however, that nothing contained herein shall be construed to prevent
      Employee from investing in the stock of any competing corporation listed on
      a
      national securities exchange or traded in the over-the-counter market, but
      only
      if Employee is not involved in the business of said corporation and if Employee
      and his associates (as such term is defined in Regulation 14(A) promulgated
      under the Securities Exchange Act of 1934, as in effect on the date hereof),
      collectively, do not own more than an aggregate of 3% of the stock of such
      corporation. With respect to the Territory, Employee specifically acknowledges
      that the Company intends to expand the Business into and throughout the United
      States.

     

    4.3. Interference
      with Relationships.
      Without
      limiting the generality of the provisions of Section
      4.2 hereof,
      Employee hereby agrees that, during the Restrictive Period, he will not,
      directly or indirectly, solicit or encourage, or participate as employee, agent,
      consultant, stockholder, director, partner or in any other individual or
      representative capacity, in any business which solicits or encourages (a) any
      person, firm, corporation or other entity which has executed, or proposes to
      execute, a management services agreement or other services agreement with the
      Company at any time during the term of this Agreement, or from any successor
      in
      interest to any such person, firm, corporation or other entity, for the purpose
      of securing business or contracts related to any element of the Business, or
      (b)
      any present or future customer or patient of the Company or any of its
      affiliated practices or facilities to terminate or otherwise alter his, her
      or
      its relationship with the Company or such affiliated practice or facility;
      provided, however, that nothing contained herein shall be construed to prohibit
      or restrict Employee from soliciting business from any such parties on behalf
      of
      the Company in performance of his duties as an employee of the Company required
      under and as specifically contemplated by Section
      1.2 above.
      In
      addition, at all times from and after the Termination Date, Employee shall
      not
      contact or communicate in any manner with any of the Employer’s suppliers or
      vendors, or any other third party providing services to Employer, regarding
      Employer or any Employer-related matter (which suppliers, vendors or third
      party
      service providers will include, without limitation, any third party with whom
      Employer was, during the term of Employee’s employment with Employer,
      contemplating engaging, or negotiating with, for the future provision of
      products or services).

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    4.4. Nonsolicitation.
      Other
      than in the performance of his duties hereunder, during the Restrictive Period,
      Employee shall not, directly or indirectly, as employee, agent, consultant,
      stockholder, director, co-partner or in any other individual or representative
      capacity, employ or engage, recruit or solicit for employment or engagement,
      any
      person who is or becomes employed or engaged by the Company or any of its
      affiliated practices during the Restrictive Period, or otherwise seek to
      influence or alter any such person’s relationship with the Company.

     

    4.5. Confidential
      Information.
      Other
      than in the performance of his duties hereunder, during the Restrictive Period
      and thereafter, Employee shall keep secret and retain in strictest confidence,
      and shall not, without the prior written consent of the Company, furnish, make
      available or disclose to any third party or use for the benefit of himself
      or
      any third party, any Confidential Information. As used in this Agreement,
“Confidential
      Information”
shall
      mean any information relating to the business or affairs of the Company or
      the
      Business, including but not limited to any technical or non-technical data,
      formulae, compilations, programs, devices, methods, techniques, designs,
      processes, procedures, improvements, models, manuals, financial data,
      acquisition strategies and information, information relating to operating
      procedures and marketing strategies, and any other proprietary information
      used
      by the Company in connection with the Business, irrespective of its form;
      provided, however, that Confidential Information shall not include any
      information which is in the public domain or becomes known in the industry
      through no wrongful act on the part of Employee. Employee acknowledges that
      the
      Confidential Information is vital, sensitive, confidential and proprietary
      to
      the Company.

     

    4.6. Inventions
      and Discoveries.

     

    (a) Employee
      understands and agrees that all inventions, discoveries, ideas, improvements,
      whether patentable, copyrightable or not, pertaining to the Business of the
      Company or relating to the Company’s actual or demonstrably anticipated
      research, development or inventions (collectively, “Inventions
      and Discoveries”)
      that
      result from any work performed by Employee solely or jointly with others for
      the
      Company which Employee, solely or jointly with others, conceives, develops,
      or
      reduces to practice during the course of Employee’s employment with the Company,
      are the sole and exclusive property of the Company. Employee will promptly
      disclose all such matters to the Company and will assist the Company in
      obtaining legal protection for Inventions and Discoveries. Employee hereby
      agrees on behalf of himself, his executors, legal representatives and assignees
      that he will assign, transfer and convey to the Company, its successors and
      assigns the Inventions and Discoveries.

     

    (b) THE
      COMPANY AND EMPLOYEE ACKNOWLEDGE AND AGREE THAT SECTION
      4.6(a)
      SHALL
      NOT APPLY TO AN INVENTION OF EMPLOYEE FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY
      OR TRADE SECRET INFORMATION OF THE COMPANY WAS USED AND WHICH WAS DEVELOPED
      ENTIRELY ON EMPLOYEE’S OWN TIME, UNLESS (A) THE INVENTION RELATED (I) TO THE
      BUSINESS OF THE COMPANY OR (II) TO THE COMPANY’S ACTUAL OR DEMONSTRABLY
      ANTICIPATED RESEARCH OR DEVELOPMENT, OR (B) THE INVENTION RESULTS FROM ANY
      WORK
      PERFORMED BY EMPLOYEE FOR THE COMPANY. EMPLOYEE AND THE COMPANY FURTHER
      ACKNOWLEDGE AND AGREE THAT SECTION
      4.6(a)
      SHALL
      NOT APPLY TO ANY INVENTIONS OR WORK PRODUCT DEVELOPED OR VESTED BY EMPLOYEE
      PRIOR TO THE EFFECTIVE DATE.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c) EMPLOYEE
      ACKNOWLEDGES THAT HE HAS READ THIS SECTION
      4.6 AND
      FULLY
      UNDERSTANDS THE LIMITATIONS WHICH IT IMPOSES UPON HIM AND HAS RECEIVED A
      DUPLICATE COPY OF THIS AGREEMENT FOR HIS RECORDS.

     

    4.7. Blue-Pencil.
      If any
      court of competent jurisdiction shall at any time deem the term of this
      Agreement or any particular Restrictive Covenant (as defined) too lengthy or
      the
      Territory too extensive, the other provisions of this Article
      IV shall
      nevertheless stand, the Restrictive Period herein shall be deemed to be the
      longest period permissible by law under the circumstances and the Territory
      herein shall be deemed to comprise the largest territory permissible by law
      under the circumstances. The court in each case shall reduce the time period
      and/or Territory to permissible duration or size.

     

    4.8. Remedies.
      Employee acknowledges and agrees that the covenants set forth in this
Article
      IV (collectively,
      the “Restrictive
      Covenants”)
      are
      reasonable and necessary for the protection of the Company’s business interests,
      that irreparable injury will result to the Company if Employee breaches any
      of
      the terms of said Restrictive Covenants, and that in the event of Employee’s
      actual or threatened breach of any such Restrictive Covenants, the Company
      will
      have no adequate remedy at law. Employee accordingly agrees that in the event
      of
      any actual or threatened breach by him of any of the Restrictive Covenants,
      the
      Company shall be entitled to immediate temporary injunctive and other equitable
      relief, without bond and without the necessity of showing actual monetary
      damages, subject to hearing as soon thereafter as possible. Nothing contained
      herein shall be construed as prohibiting the Company from pursuing any other
      remedies available to it for such breach or threatened breach, including the
      recovery of any damages which it is able to prove.

     

    4.9. Covenant
      Not to Disparage.
      During
      the Restrictive Period and thereafter, Employee shall not disparage, denigrate
      or derogate in any way, directly or indirectly, any of the Company, its agents,
      officers, directors, employees, parent, subsidiaries, affiliates, affiliated
      practices, affiliated doctors, representatives, attorneys, executors,
      administrators, successors and assigns (collectively, the “Protected
      Parties”),
      nor
      shall Employee disparage, denigrate or derogate in any way, directly or
      indirectly, his experience with any Protected Party, or any actions or decisions
      made by any Protected Party.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

     

    Miscellaneous

     

    5.1. Notices.
      Any
      notice provided for in this Agreement must be in writing and must be either
      (i)
      personally delivered, (ii) mailed by registered or certified first class mail,
      prepaid with return receipt requested or (iii) sent by a recognized overnight
      courier service, to the recipient at the address below indicated:

     

    


    To
      the
      Company:

    


    
      	
              NovaMed
                Management Services, LLC

              980
                N. Michigan Avenue

              Suite
                1620

              Chicago,
                IL 60611

              Attention: 
                Thomas S. Hall

            
	
               John
                W. Lawrence, Jr.

            


    

     

    with
      a copy to:

        

    
      	
              NovaMed
                Management Services, LLC

              980
                N. Michigan Avenue

              Suite
                1620

              Chicago,
                IL 60611

              Attention: 
                Steven V. Napolitano,
                Esq.

            

 

    To
      Employee: at his home address then on file with the Company.

    


    or
      such
      other address or to the attention of such other person as the recipient party
      shall have specified by prior written notice to the sending party. Any notice
      under this Agreement will be deemed to have been given (a) on the date such
      notice is personally delivered, (b) three (3) days after the date of mailing
      if
      sent by certified or registered mail, or (c) one (1) day after the date such
      notice is delivered to the overnight courier service if sent by overnight
      courier.

    


    5.2. Severability.
      Whenever possible, each provision of this Agreement will be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement is held to be invalid, illegal or unenforceable in any respect
      under any applicable law or rule in any jurisdiction, such invalidity,
      illegality or unenforceability will not affect any other provision or any other
      jurisdiction, but this Agreement will be reformed, construed and enforced in
      such jurisdiction as if such invalid, illegal or unenforceable provision had
      never been contained herein.

     

    5.3. Entire
      Agreement.
      This
      Agreement, those documents expressly referred to herein and other documents
      of
      even date herewith embody the complete agreement and understanding among the
      parties and supersede and preempt any prior understandings, agreements or
      representations by or among the parties, written or oral, which may have related
      to the subject matter hereof in any way.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    5.4. Counterparts.
      This
      Agreement may be executed on separate counterparts, each of which is deemed
      to
      be an original and all of which taken together constitute one and the same
      agreement.

     

    5.5. Successors
      and Assigns.
      This
      Agreement is intended to bind and inure to the benefit of and be enforceable
      by
      Employee and the Company and their respective successors and permitted assigns.
      Employee may not assign any of his rights or obligations hereunder without
      the
      written consent of the Company.

     

    5.6. No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties hereto to express their mutual intent, and no rule of strict
      construction will be applied against any party hereto.

     

    5.7. Amendments
      and Waivers.
      Any
      provision of this Agreement may be amended or waived only with the prior written
      consent of the Company and Employee.

     

    5.8. Governing
      Law.
      This
      Agreement shall be construed and enforced in accordance with, and all questions
      concerning the construction, validity, interpretation and performance of this
      Agreement shall be governed by, the laws of the State of Illinois, without
      giving effect to provisions thereof regarding conflict of laws.

     

    5.9. Income
      Tax Treatment.
      Employee and the Company acknowledge that it is the intention of the Company
      to
      deduct all amounts paid under this Agreement as ordinary and necessary business
      expenses for income tax purposes. Employee agrees and represents that he will
      treat all such amounts as ordinary income for income tax purposes, and should
      he
      report such amounts as other than ordinary income for income tax purposes,
      he
      will indemnify and hold the Company harmless from and against any and all taxes,
      penalties, interest, costs and expenses, including reasonable attorneys’ and
      accounting fees and costs, which are incurred by Company directly or indirectly
      as a result thereof.

     

    5.10. CONSENT
      TO JURISDICTION.
      THE
      COMPANY AND EMPLOYEE HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL
      COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY
      AGREE
      THAT SUBJECT TO THE COMPANY’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT
      OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EMPLOYEE
      ACCEPTS FOR HIMSELF AND IN CONNECTION WITH HIS PROPERTIES, GENERALLY AND
      UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
      WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
      BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.


     

    5.11. WAIVER
      OF JURY TRIAL.
      THE
      PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
      CLAIM
      OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS
      BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE
      RELATIONSHIP THAT IS BEING ESTABLISHED. THE PARTIES HERETO ALSO WAIVE ANY BOND
      OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
      REQUIRED OF THE OTHER PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
      ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
      THAT
      RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION,
      CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, DISCRIMINATION CLAIMS,
      AND
      ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO ACKNOWLEDGE THAT
      THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
      THAT
      EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
      EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
      THE
      COMPANY AND EMPLOYEE FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
      WAIVER WITH THEIR RESPECTIVE LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
      VOLUNTARILY WAIVES THEIR RESPECTIVE JURY TRIAL RIGHTS FOLLOWING CONSULTATION
      WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
      MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
      SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
      OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED
      HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
      CONSENT TO A TRIAL BY THE COURT.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    [Signature
      Page to Follow]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Agreement on the day and year first above
      written.

    


    THIS
      AGREEMENT CONTAINS AUTOMATIC RENEWAL PROVISIONS.

     

     

    
      	 	COMPANY:
	 	 	 
	 	NovaMed
              Management Services, LLC,
              a
              Delaware limited liability company
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
              S. Hall
	 	
              

            
	 	
              Thomas
                S. Hall, President and Chief

              Executive Officer

            


    

     

     

    
      	 	EMPLOYEE:
	 	 	 
	 	/s/ Jack
              Clark
	 
 	
              
Jack
              Clark


    

     

     

    
      
        
        

      

      
        16