Document:

EX-10.19 ORION HEALTHCORP, INC. INCENTIVE PLAN

 

EXHIBIT 10.19

ORION HEALTHCORP, INC.

2004 INCENTIVE PLAN

1. DEFINED TERMS

     Exhibit A, which is incorporated herein by reference, defines the terms
used in the Plan and sets forth certain operational rules related to those
terms.

2. PURPOSE

     The Plan has been established to advance the interests of the Company by
providing for the grant to Participants of Stock-based and other incentive
Awards.

3. ADMINISTRATION

     The Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
prescribe forms, rules and procedures; and otherwise do all things necessary to
carry out the purposes of the Plan. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m),
the Administrator will exercise its discretion consistent with qualifying the
Award for such exception. Determinations of the Administrator made under the
Plan will be conclusive and will bind all parties.

4. LIMITS ON AWARDS UNDER THE PLAN

     (a) 
Number of Shares. A maximum of 2,200,000 shares of Stock may be
delivered in satisfaction of Awards under the Plan. For purposes of the
preceding sentence, shares that have been forfeited in accordance with the
terms of the applicable Award and shares held back in satisfaction of the
exercise price or tax withholding requirements from shares that would otherwise
have been delivered pursuant to an Award shall not be considered to have been
delivered under the Plan. Also, the number of shares of Stock delivered under
an Award shall be determined net of any previously acquired Shares tendered by
the Participant in payment of the exercise price or of withholding taxes.

     (b)  Type of Shares. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the
Company and held in treasury. No fractional shares of Stock will be delivered
under the Plan.

     (c)  Section 162(m) Limits. The maximum number of shares of Stock for
which Stock Options may be granted to any person in any calendar year and the
maximum number of shares of Stock subject to SARs granted to any person in any
calendar year will each be 1,000,000. The maximum benefit that may be paid to
any person under other Awards in any calendar year will be, to the extent paid
in shares, 1,000,000 shares, and, to the extent paid
in cash, $1,000,000. However, Stock Options
and SARs that are granted with an exercise price that is less than the fair
market value of the underlying shares on the date of the grant will be subject

 

 

to both of the limits imposed by the two preceding sentences. The
foregoing provisions will be construed in a manner consistent with Section
162(m) of the Code.

5. ELIGIBILITY AND PARTICIPATION

     The Administrator will select Participants from among those key Employees
and directors of, and other individuals or entities providing services to, the
Company or its Affiliates who, in the opinion of the Administrator, are in a
position to make a significant contribution to the success of the Company and
its Affiliates. Eligibility for ISOs is limited to employees of the Company or
of a “parent corporation” or “subsidiary corporation” of the Company as those
terms are defined in Section 424 of the Code.

6. RULES APPLICABLE TO AWARDS

     (a)  ALL AWARDS

          (1) Award Provisions. The Administrator will determine the terms of all
Awards, subject to the limitations provided herein.

          (2) Transferability. Neither ISOs nor, except as the Administrator
otherwise expressly provides, other Awards may be transferred (including by
sale, assignment, pledge, hypothecation or other disposition or encumbrance)
other than by will or by the laws of descent and distribution, and during a
Participant’s lifetime ISOs (and, except as the Administrator otherwise
expressly provides, other non-transferable Awards requiring exercise) may be
exercised only by the Participant (or, in the event of the Participant’s
incapacity, the person or persons legally appointed to act on the Participant’s
behalf).

          (3) Vesting, Etc. The Administrator may determine the time or times at
which an Award will vest or become exercisable and the terms on which an Award
requiring exercise will remain exercisable. Without limiting the foregoing,
the Administrator may at any time accelerate the vesting or exercisability of
an Award, regardless of any adverse or potentially adverse tax consequences
resulting from such acceleration. Unless the Administrator expressly provides
otherwise, immediately upon the cessation of the Participant’s Employment an
Award requiring exercise will cease to be exercisable and will terminate, and
all other Awards to the extent not already vested will be forfeited, except
that:

		
	 	     (A) subject to (B) and (C) below, all Stock Options and SARs held by
the Participant or the Participant’s permitted transferee, if any,
immediately prior to the cessation of the Participant’s Employment, to
the extent then exercisable, will remain exercisable for the lesser of
(i) a period of three months or (ii) the period ending on the latest date
on which such Stock Option or SAR could have been exercised without
regard to this Section 6(a)(3), and will thereupon terminate;

		
	 	     (B) all Stock Options and SARs held by a Participant or the
Participant’s permitted transferee, if any, immediately prior to the
Participant’s death, to the extent then exercisable, will remain
exercisable for the lesser of (i) the one year period ending with the
first anniversary of the Participant’s death or (ii) the period ending on
the latest

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	 	date on which such Stock Option or SAR could have been exercised
without regard to this Section 6(a)(3), and will thereupon terminate; and

		
	 	     (C) all Stock Options and SARs held by a Participant or the
Participant’s permitted transferee, if any, immediately prior to the
cessation of the Participant’s Employment will immediately terminate upon
such cessation if the Administrator in its sole discretion determines
that such cessation of Employment has resulted for reasons which cast
such discredit on the Participant as to justify immediate termination of
the Award.

          (4) Taxes. The Administrator will make such provision for the withholding
of taxes as it deems necessary. The Administrator may, but need not, hold back
shares of Stock from an Award or permit a Participant to tender previously
owned shares of Stock in satisfaction of tax withholding requirements (but not
in excess of the minimum withholding required by law).

          (5) Dividend Equivalents, Etc. The Administrator may provide for the
payment of amounts in lieu of cash dividends or other cash distributions with
respect to Stock subject to an Award.

          (6) Rights Limited. Nothing in the Plan shall be construed as giving any
person the right to continued employment or service with the Company or its
Affiliates, or any rights as a stockholder except as to shares of Stock
actually issued under the Plan. The loss of existing or potential profit in
Awards will not constitute an element of damages in the event of termination of
employment or service for any reason, even if the termination is in violation
of an obligation of the Company or Affiliate to the Participant.

          (7) Section 162(m). This Section 6(a)(7) applies to any Performance Award
intended to qualify as performance-based for the purposes of Section 162(m)
other than a Stock Option or SAR with an exercise price at least equal to the
fair market value of the underlying Stock on the date of grant. In the case of
any Performance Award to which this Section 6(a)(7) applies, the Plan and such
Award will be construed to the maximum extent permitted by law in a manner
consistent with qualifying the Award for such exception. With respect to such
Performance Awards, the Administrator will preestablish, in writing, one or
more specific Performance Criteria no later than 90 days after the commencement
of the period of service to which the performance relates (or at such earlier
time as is required to qualify the Award as performance-based under Section
162(m)). The Performance Criteria so established shall serve as a condition to
the grant, vesting or payment of the Performance Award, as determined by the
Administrator. Prior to grant, vesting or payment of the Performance Award, as
the case may be, the Administrator will certify whether the Performance
Criteria have been attained and such determination will be final and
conclusive. If the Performance Criteria with respect to the Award are not
attained, no other Award will be provided in substitution of the Performance
Award. No Performance Award to which this Section 6(a)(7) applies may be
granted after the first meeting of the stockholders of the Company held in
[2008] until the Performance Criteria (as originally approved or as
subsequently amended) have been resubmitted to and reapproved by the

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stockholders of the Company in accordance with the requirements of Section
162(m) of the Code, unless such grant is made contingent upon such approval.

     (b)  AWARDS REQUIRING EXERCISE

          (1) Time And Manner Of Exercise. Unless the Administrator expressly
provides otherwise, an Award requiring exercise by the holder will not be
deemed to have been exercised until the Administrator receives a notice of
exercise (in form acceptable to the Administrator) signed by the appropriate
person and accompanied by any payment required under the Award. If the Award
is exercised by any person other than the Participant, the Administrator may
require satisfactory evidence that the person exercising the Award has the
right to do so.

          (2) Exercise Price. The Administrator will determine the exercise price,
if any, of each Award requiring exercise. Unless the Administrator determines
otherwise, and in all events in the case of any Stock Option intended to
qualify as an ISO and any Stock Option or SAR (other than a Performance Award
subject to Section 6(a)(7)) intended to qualify as performance-based for
purposes of Section 162(m), the exercise price of an Award requiring exercise
will not be less than the fair market value of the Stock subject to the Award
determined as of the date of grant.

          (3) Payment Of Exercise Price. Where the exercise of an Award is to be
accompanied by payment, the Administrator may determine the required or
permitted forms of payment, subject to the following: (a) all payments will be
by cash or check acceptable to the Administrator, or, if so permitted by the
Administrator and if legally permissible, (i) through the delivery of shares of
Stock that have been outstanding for at least six months (unless the
Administrator approves a shorter period) and that have a fair market value
equal to the exercise price, (ii) by delivery to the Company of a promissory
note of the person exercising the Award, payable on such terms as are specified
by the Administrator, (iii) through a broker-assisted exercise program
acceptable to the Administrator, or (iv) by any combination of the foregoing
permissible forms of payment; and (b) where shares of Stock issued under an
Award are part of an original issue of shares, the Award will require that at
least so much of the exercise price as equals the par value of such shares be
paid other than by delivery of a promissory note or its equivalent. The
delivery of shares in payment of the exercise price under clause (a)(i) above
may be accomplished either by actual delivery or by constructive delivery
through attestation of ownership, subject to such rules as the Administrator
may prescribe.

          (4) ISOs.
No ISO may be granted under the Plan after
[     ], 2014,
but ISOs previously granted may extend beyond that date.

     (c)  AWARDS NOT REQUIRING EXERCISE

     Awards of Restricted Stock and Unrestricted Stock may be made in exchange
for past services or other lawful consideration.

7. EFFECT OF CERTAIN TRANSACTIONS

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     (a)  MERGERS, ETC.

     Except as otherwise provided in an Award, in the event of a Covered
Transaction in which there is an acquiring or surviving entity, the
Administrator may provide for the assumption of some or all outstanding Awards,
or for the grant of new awards in substitution therefor, by the acquiror or
survivor or an affiliate of the acquiror or survivor, in each case on such
terms and subject to such conditions as the Administrator determines. In the
absence of such an assumption or if there is no substitution, except as
otherwise provided in the Award each Stock Option, SAR and other Award
requiring exercise will become fully exercisable, and the delivery of shares of
Stock issuable under each outstanding Award of Deferred Stock will be
accelerated and such shares will be issued, prior to the Covered Transaction,
in each case on a basis that gives the holder of the Award a reasonable
opportunity, as determined by the Administrator, following exercise of the
Award or the issuance of the shares, as the case may be, to participate as a
stockholder in the Covered Transaction, and the Award will terminate upon
consummation of the Covered Transaction. In the case of Restricted Stock, the
Administrator may require that any amounts delivered, exchanged or otherwise
paid in respect of such Stock in connection with the Covered Transaction be
placed in escrow or otherwise made subject to such restrictions as the
Administrator deems appropriate to carry out the intent of the Plan.

     (b)  CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK

          (1) Basic Adjustment Provisions. In the event of a stock dividend, stock
split or combination of shares (including a reverse stock split),
recapitalization or other change in the Company’s capital structure, the
Administrator will make appropriate adjustments to the maximum number of shares
that may be delivered under the Plan under Section 4(a) and to the maximum
share limits described in Section 4(c), and will also make appropriate
adjustments to the number and kind of shares of stock or securities subject to
Awards then outstanding or subsequently granted, any exercise prices relating
to Awards and any other provision of Awards affected by such change.

          (2) Certain Other Adjustments. To the extent consistent with
qualification of ISOs under Section 422 of the Code and with the
performance-based compensation rules of Section 162(m), where applicable, the
Administrator may also make adjustments of the type described in paragraph (1)
above to take into account distributions to stockholders other than those
provided for in Section 7(a) and 7(b)(1), or any other event, if the
Administrator determines that adjustments are appropriate to avoid distortion
in the operation of the Plan and to preserve the value of Awards made
hereunder.

          (3) Continuing Application of Plan Terms. References in the Plan to
shares of Stock will be construed to include any stock or securities resulting
from an adjustment pursuant to this Section 7.

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or

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to remove any restriction from shares of Stock previously delivered under
the Plan until: (i) the Company is satisfied that all legal matters in
connection with the issuance and delivery of such shares have been addressed
and resolved; (ii) if the outstanding Stock is at the time of delivery listed
on any stock exchange or national market system, the shares to be delivered
have been listed or authorized to be listed on such exchange or system upon
official notice of issuance; and (iii) all conditions of the Award have been
satisfied or waived. If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act. The Company
may require that certificates evidencing Stock issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such
Stock, and the Company may hold the certificates pending lapse of the
applicable restrictions.

9. AMENDMENT AND TERMINATION

     The Administrator may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law,
and may at any time terminate the Plan as to any future grants of Awards;
provided, that except as otherwise expressly provided in the Plan the
Administrator may not, without the Participant’s consent, alter the terms of an
Award so as to affect adversely the Participant’s rights under the Award,
unless the Administrator expressly reserved the right to do so at the time of
the Award.

10. OTHER COMPENSATION ARRANGEMENTS

     The existence of the Plan or the grant of any Award will not in any way
affect the Company’s right to Award a person bonuses or other compensation in
addition to Awards under the Plan.

11. GOVERNING LAW

     The plan shall be construed in accordance with the laws of the State of
Delaware.

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EXHIBIT A

Definition of Terms

     The following terms, when used in the Plan, will have the meanings and be
subject to the provisions set forth below:

     “Administrator”: The Board or, if one or more has been appointed, the
Committee. The Administrator may delegate ministerial tasks to such persons as
it deems appropriate.

     “Affiliate”: Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in which
the Company or any such corporation or other entity owns, directly or
indirectly, 50% of the outstanding capital stock (determined by aggregate
voting rights) or other voting interests.

     “Award”: Any or a combination of the following:

		
	 	     (i) Stock Options.
	 
	 	     (ii) SARs.
	 
	 	     (iii) Restricted Stock.
	 
	 	     (iv) Unrestricted Stock.
	 
	 	     (v) Deferred Stock.
	 
	 	     (vi) Securities (other than Stock Options) that are convertible
into or exchangeable for Stock on such terms and conditions as the
Administrator determines.
	 
	 	     (vii) Performance Awards.
	 
	 	     (viii) Grants of cash made in connection with other Awards in order
to help defray in whole or in part the cost (including tax cost) of the
Award to the Participant.

     “Board”: The Board of Directors of the Company.

     “Code”: The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in effect.

     “Committee”: One or more committees of the Board which, in the case of
Awards granted to persons who are or are reasonably expected to become officers
of the Company, shall be comprised solely of two or more directors, all of whom
are both “outside directors” within the meaning of Section 162(m) and
“non-employee directors” within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended.

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     “Company”: Orion HealthCorp, Inc. or any successor thereto.

     “Covered Transaction”: Any of (i) a consolidation, merger, or similar
transaction or series of related transactions in which the Company is not the
surviving corporation or which results in the acquisition of all or
substantially all of the Company’s then outstanding common stock by a single
person or entity or by a group of persons and/or entities acting in concert,
(ii) a sale or transfer of all or substantially all the Company’s assets, or
(iii) a dissolution or liquidation of the Company. Where a Covered Transaction
involves a tender offer that is reasonably expected to be followed by a merger
described in clause (i) (as determined by the Administrator), the Covered
Transaction shall be deemed to have occurred upon consummation of the tender
offer.

     “Deferred Stock”: An unfunded and unsecured promise to deliver Stock or
other securities in the future on specified terms.

     “Employee”: Any person who is employed by the Company or an Affiliate.

     “Employment”: A Participant’s employment or other service relationship
with the Company and its Affiliates. Employment will be deemed to continue,
unless the Administrator expressly provides otherwise, so long as the
Participant is employed by, or otherwise is providing services in a capacity
described in Section 5 to the Company or its Affiliates. If a Participant’s
employment or other service relationship is with an Affiliate and that entity
ceases to be an Affiliate, the Participant’s Employment will be deemed to have
terminated when the entity ceases to be an Affiliate unless the Participant
transfers Employment to the Company or its remaining Affiliates.

     “ISO”: A Stock Option intended to be an “incentive stock option” within
the meaning of Section 422 of the Code. Each option granted pursuant to the
Plan will be treated as providing by its terms that it is to be a non-incentive
option unless, as of the date of grant, it is expressly designated as an ISO.

     “Participant”: A person who is granted an Award under the Plan.

     “Performance
Award”: An Award subject to Performance Criteria. The
Committee in its discretion may grant Performance Awards that are intended to
qualify for the performance-based compensation exception under Section 162(m)
and Performance Awards that are not intended so to qualify.

     “Performance Criteria”: Specified criteria the satisfaction of which is a
condition for the grant, exercisability, vesting or full enjoyment of an
Award. For purposes of Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion will mean an objectively determinable measure of performance relating
to any or any combination of the following (determined either on a consolidated
basis or, as the context permits, on a divisional, subsidiary, line of
business, project or geographical basis or in combinations thereof): sales;
revenues; assets; expenses; earnings before or after deduction for all or any
portion of interest, taxes, depreciation, or amortization, whether or not on a
continuing

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operations or an aggregate or per share basis; return on equity,
investment, capital or assets (in each case before or after deduction for all
or any portion of interest, taxes, depreciation, or amortization, whether or
not on a continuing operations or an aggregate or per share basis); one or more
operating ratios; one or more financial coverage ratios; book value per share;
borrowing levels, leverage ratios (including without limitation debt as a
percentage of total capitalization) or credit rating; market share; capital
expenditures; cash flow; stock price; stockholder return; sales of particular
products or services; customer acquisition or retention; acquisitions and
divestitures (in whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations; or recapitalizations,
restructurings, financings (issuance of debt or equity) or refinancings. A
Performance Criterion measure and any targets with respect thereto determined
by the Administrator need not be based upon an increase, a positive or improved
result or avoidance of loss.

     “Plan”: The Orion HealthCorp,
Inc. 2004 Incentive Plan as from time to
time amended and in effect.

     “Restricted Stock”: An Award of Stock for so long as the Stock remains
subject to restrictions requiring that it be redelivered or offered for sale to
the Company if specified conditions are not satisfied.

     “Section 162(m)”: Section 162(m) of the Code.

     “SARs”: Rights entitling the holder upon exercise to receive cash or
Stock, as the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by
which the Stock has appreciated in value since the date of the Award.

     “Stock”: Class A Common Stock of the Company, par value $0.001 per share.

     “Stock Options”: Options entitling the recipient to acquire shares of
Stock upon payment of the exercise price.

     “Unrestricted Stock”: An Award of Stock not subject to any restrictions
under the Plan.

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                                                                   EXHIBIT 10.36

                                HORIZON PCS, INC.
                               68 East Main Street
                             Chillicothe, Ohio 45601

                                 March 16, 2005

William A. McKell
c/o Horizon PCS, Inc.
68 East Main Street
Chillicothe, Ohio 45601

Dear Bill:

            This letter ("Letter Agreement") sets forth our understanding
regarding an amendment to be made to your Employment Agreement, by and between
Horizon PCS, Inc. (the "Company") and yourself, effective as of the effective
date of the Joint Plan of Reorganization for Horizon PCS, Inc., Horizon Personal
Communications, Inc. and Bright Personal Communications Services, LLC Under
Chapter 11 of the Bankruptcy Code (the "Employment Agreement"). All capitalized
terms not defined herein shall have the same meaning as your Employment
Agreement.

            In consideration of your continued employment with the Company and
for other good and valuable consideration the sufficiency of which is hereby
acknowledged, Section 6 of the Employment Agreement is amended to insert a new
subsection (e) which shall provide the following:

            (e) Section 280G Safe Harbor Cap. In the event it shall be
      determined that any payment or distribution or any part thereof of any
      type to or for the benefit of Executive whether pursuant to the Agreement
      or any other agreement between Executive and either the Company, any
      affiliate thereto, or any person or entity that acquires ownership or
      effective control of the Company or ownership of a substantial portion of
      Company's assets (within the meaning of Section 280G of the Internal
      Revenue Code of 1986, as amended, and the regulations thereunder (the
      "Code")) whether paid or payable or distributed or distributable pursuant
      to the terms of the Agreement or any other agreement, (the "Total
      Payments"), is or will be subject to the excise tax imposed by Section
      4999 of the Code (the "Excise Tax"), then the Total Payments shall be
      reduced to the maximum amount that could be paid to Executive without
      giving rise to the Excise Tax (the "Safe Harbor Cap"), if the net
      after-tax payment to Executive after reducing Executive's Total Payments
      to the Safe Harbor Cap is greater than the net after-tax (including the
      Excise Tax) payment to Executive without such reduction. The reduction of
      the amounts payable hereunder, if applicable, shall be made by reducing
      first the payment made pursuant to the Agreement and then to any other
      agreement that triggers such Excise Tax, unless an alternative method of
      reduction is elected by Executive. All mathematical determinations, and
      all
<PAGE>
      determinations as to whether any of the Total Payments are "parachute
      payments" (within the meaning of Section 280G of the Code), that are
      required to be made under this Section 6(e), including determinations as
      to whether the Total Payments to Executive shall be reduced to the Safe
      Harbor Cap and the assumptions to be utilized in arriving at such
      determinations, shall be made by a nationally recognized accounting firm
      selected by the Company (the "Accounting Firm"). If the Accountant
      determines that the Total Payments to Executive shall be reduced to the
      Safe Harbor Cap (the "Cutback Payment") and it is established pursuant to
      a final determination of a court or an Internal Revenue Service (the
      "IRS") proceeding which has been finally and conclusively resolved, that
      the Cutback Payment is in excess of the limitations provided in Section
      6(e) (hereinafter referred to as an "Excess Payment"), such Excess Payment
      shall be deemed for all purposes to be an overpayment to Executive made on
      the date such Executive received the Excess Payment and Executive shall
      repay the Excess Payment to the Company on demand; provided, however, if
      Executive shall be required to pay an Excise Tax by reason of receiving
      such Excess Payment (regardless of the obligation to repay the Company),
      Executive shall not be required to repay the Excess Payment (if Executive
      has already repaid such amount, Company shall refund the amount to the
      Executive), and the Company shall pay Executive an amount equal to the
      difference between the Total Payments and the Shortfall Cap.

            Except as otherwise provided for herein, your Employment Agreement
shall remain in full force and effect.

            If you are in agreement with the terms set forth in this Letter
Agreement, please execute both copies and return one to the address set forth
above.

                                          HORIZON PCS, INC.

                                          By:   /s/ Peter M. Holland
                                             ---------------------------------

Agreed to and accepted on this 16th day of March, 2005 by:

/s/ William A. McKell
---------------------

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