Document:

exhibit101.htm

Exhibit 10.1

 

AMENDMENT NO. 1

THIS AMENDMENT NO. 1 (this “Amendment”), dated as of January 5, 2011, with respect to that certain Credit Agreement referenced below, is by and among DYCOM INDUSTRIES, INC., a Florida corporation (the “Borrower”), the Guarantors, the Lenders identified on the signature pages hereto, and BANK OF AMERICA, N.A., as Administrative Agent.

W I T N E S S E T H:

WHEREAS, the Borrower entered into that certain Credit Agreement, dated as of June 4, 2010 (as amended, restated, amended and restated, modified, supplemented, increased or extended from time to time, the “Credit Agreement”), with the Guarantors identified therein, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent, Swingline Lender and L/C Issuer;

WHEREAS, the Borrower has requested certain modifications of the terms of the Credit Agreement; and

WHEREAS, the Lenders, by action of the Required Lenders, have agreed to the requested modifications on the terms and conditions set forth herein.

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.           Defined Terms.  Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

2.           Amendments to the Credit Agreement.

2.1           New Definition.  The following defined term is added to Section 1.01 of the Credit Agreement in the correct alphabetical order:

“Additional Subordinated Notes” means any subordinated notes issued by the Borrower pursuant to an indenture with subordination terms at least as favorable to the Lenders as the indenture with respect to the Senior Subordinated Notes as confirmed by the Administrative Agent in its reasonable judgment.

2.2           Amended Definitions.  The following defined terms are amended in full to read as follows:

“Consolidated Scheduled Funded Debt Payments” means for any period for the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum of all scheduled payments of principal on Consolidated Funded Debt during such period.  For purposes of this definition, “scheduled payments of principal” (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments or redemptions or purchase of similar payments made during the applicable period, except for any such reduction with respect to the Senior Subordinated Notes and any Additional Subordinated Notes, (b) shall be deemed to include the Attributable Indebtedness and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.05 or any refinancing, prepayment, repurchase, redemption, retirement and/or defeasance of the Senior Subordinated Notes pursuant to Section 8.01(j)(ii).

“Joint Lead Arrangers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, in their capacities as joint lead arrangers and joint book managers.

“Subordinated Indebtedness” means (a) the Senior Subordinated Notes, (b) any Additional Subordinated Notes, and (c) any other Indebtedness incurred by any Credit Party that by its terms is specifically subordinated in right of payment to the prior payment of the Revolving Loans, the L/C Obligations, the Swingline Loans and Term Loans on terms reasonably satisfactory to the Administrative Agent.

2.3           Consolidated Leverage Ratio.  Clause (a) of Section 7.07 is amended to include a new proviso to read as follows:

; provided that for purposes of calculating the Consolidated Leverage Ratio for the period of four consecutive fiscal quarters ending as of the first fiscal quarter ending after any issuance of Additional Subordinated Notes, “Consolidated Funded Debt” as used in the calculation of the Consolidated Leverage Ratio shall be deemed to exclude any outstanding Senior Subordinated Notes to the extent that the Borrower has received Net Cash Proceeds from the issuance of any Additional Subordinated Notes for the purpose of, and such Net Cash Proceeds are held by the Borrower solely to be used for, refinancing, prepaying, repurchasing, redeeming, retiring and/or defeasing such outstanding Senior Subordinated Notes within sixty (60) days of issuance of any Additional Subordinated Notes.

2.4           Indebtedness.  Clauses (i) and (j) of Section 8.01 of the Credit Agreement are amended to read as follows, respectively:

(i)           Indebtedness of the Credit Parties and the Restricted Subsidiaries not otherwise contemplated in this Section 8.01 in an amount not to exceed $125,000,000 in the aggregate at any time outstanding;

(j)           (i) the Senior Subordinated Notes, (ii) Additional Subordinated Notes in an aggregate principal amount of up to $175,000,000, so long as the Net Cash Proceeds of such Additional Subordinated Notes are to be used solely first, to refinance, prepay, repurchase, redeem, retire and/or defease the Senior Subordinated Notes in their entirety within sixty (60) days of issuance of any Additional Subordinated Notes and second, to the extent that any Net Cash Proceeds remain, for general corporate purposes not in contravention of any applicable Laws, and (iii) any Guaranty Obligations of any Credit Party in respect of the Indebtedness described in subclauses (i) and (ii) of this clause (j); together, in each case of subclauses (i), (ii) and (iii) above, with any refinancings, refundings, renewals or extensions thereof; provided that (A) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension, but the principal amount of any such refinancing, refunding, renewal or extension may include (1) the principal amount of unfunded commitments relating thereto, (2) a reasonable premium or other reasonable amount paid, (3) reasonable amounts added to the original principal amount thereof as a result of the capitalization of interest and (4) the costs thereof, including reasonable fees and expenses incurred in connection therewith and (B) the terms relating to principal amount, amortization, maturity, subordination, and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Credit Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate;

2.5           Limitation on Restricted Actions.  Clause (iii) of Section 8.08 of the Credit Agreement is amended to read as follows:

(iii) any document or instrument governing Indebtedness incurred pursuant to Sections 8.01(c), (i), (j) or (n); provided that (A) with respect to Indebtedness incurred pursuant to Section 8.01(c) and (n), any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith and (B) with respect to Indebtedness incurred pursuant to Section 8.01(i) and (j), any such restriction shall not apply to this Credit Agreement or any other Credit Document or

2.6           Restricted Payments - Share Repurchases.  Clauses (c) and (g) of Section 8.09 of the Credit Agreement are amended to read as follows, respectively:

(c)           subject to the subordination terms thereof, the Borrower may (i) make regularly scheduled interest payments under the Senior Subordinated Notes and other Subordinated Indebtedness and (ii) refinance, prepay, repurchase, redeem, retire and/or defease the Senior Subordinated Notes as required pursuant to Section 8.01(j);

(g) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Borrower may repurchase shares of its Equity Interests in an aggregate amount not to exceed $30,000,000 for the period beginning January 5, 2011 through the Maturity Date;

2.7           Events of Default.  Clause (k) of Section 9.01 of the Credit Agreement is amended to read as follows:

(k)           The Obligations shall fail to constitute “senior debt,” “designated senior debt” or a corresponding term under the terms of the Senior Subordinated Notes or any Additional Senior Subordinated Notes.

3.           Conditions Precedent.  This Amendment shall be effective as of the date hereof upon the satisfaction of the following conditions precedent:

(a)           Executed Amendment.  Receipt by the Administrative Agent of this Amendment duly executed by the Credit Parties, the Required Lenders and the Administrative Agent.

(b)           Organizational Documents, Incumbency, Resolutions, Etc.  Receipt by the Administrative Agent of the following, each of which shall be originals or facsimiles (followed promptly by originals), in form and substance satisfactory to the Administrative Agent:

(i)           copies of the organizational documents of each Credit Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other jurisdiction of its incorporation or organization, where applicable, and certified by a secretary or assistant secretary of such Credit Party to be true and correct as of the date of this Amendment, unless a Responsible Officer of the Borrower certifies in a certificate that the organizational documents previously delivered to the Administrative Agent in connection with the Credit Agreement have not been amended, supplemented or otherwise modified and remain in full force and effect as of the date hereof;

(ii)           incumbency certificates identifying the Responsible Officers of the Credit Parties who are authorized to execute this Amendment and related documents and to act on the Credit Parties behalf in connection with this Amendment and the Credit Documents, unless a Responsible Officer of the Borrower certifies in a certificate that the incumbency certificates previously delivered to the Administrative Agent in connection with the Credit Agreement have not been amended, supplemented or otherwise modified and remain in full force and effect as of the date hereof;

(iii)           such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment; unless a Responsible Officer of the Borrower certifies in a certificate that the incumbency certificates previously delivered to the Administrative Agent in connection with the Credit Agreement do not require amendment and remain in full force and effect as of the date hereof; and

(iv)           such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly organized or formed, and is validly existing, and in good standing in its state of organization or formation.

(c)           Fees and Expenses.  Receipt by the Administrative Agent of (i) for the account of each Lender that executes this Amendment prior to 5:00 p.m. Eastern time on Thursday, December 30, 2010, an amendment fee equal to seven and one-half basis points (0.075%) on the Revolving Commitment of such Lender as of the date hereof and (ii) all other fees and expenses required to be paid to the Administrative Agent and the Joint Lead Arrangers on or before the date hereof.

4.           Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original and it shall not be necessary in making proof of this Amendment to produce or account for more than one such counterpart.  Delivery by any party hereto of an executed counterpart of this Amendment by facsimile shall be effective as such party’s original executed counterpart and shall constitute a representation that such party’s original executed counterpart will be delivered.

5.           Affirmations and Representations and Warranties of Credit Parties.  Each of the Credit Parties hereby affirms, represents and warrants (a) the representations and warranties set forth in Article VI of the Credit Agreement are true and correct as of the date hereof (except for any representation or warranty made as of an earlier date, in which case such representation or warranty shall be true and correct (or true and correct in all material respects, as applicable) as of such earlier date) and (b) no Default or Event of Default exists as of the date hereof.

6.           Affirmation of Obligations.  The Credit Parties (a) affirm all of their obligations under the Credit Documents and (b) agree that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge their obligations under any Credit Document.

7.           Reaffirmation of Security Interests.  Each Credit Party (a) affirms that each of the Liens granted in or pursuant to the Credit Documents are valid and subsisting and (b) agrees that this Amendment shall in no manner impair or otherwise adversely effect any of the Liens granted in or pursuant to the Credit Documents.

8.           Effectiveness of Amendment; No Other Changes.  On and after the date hereof, all references to the Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Amendment.  Except as expressly modified hereby, all of the terms of the Credit Agreement and the other the Credit Documents, and any other certificates, documents, agreements and instruments executed in connection with the Credit Documents, remain in full force and effect.

9.           Fees and Expenses.  The Credit Parties agree to pay all reasonable out-of-pocket fees and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of Moore & Van Allen, PLLC, counsel to the Administrative Agent.

10.           Amendment is a Credit Document.  Each of the parties hereto hereby agrees that this Amendment shall be deemed to be, and is, a Credit Document.

11.           Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[Signature Pages Follow]

  

  

  

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed and delivered as of the date first above written.

BORROWER:                                       DYCOM INDUSTRIES, INC.,

	
  

	
a Florida corporation

By:  /s/ H. Andrew DeFerrari                                                             

Name: H. Andrew DeFerrari

Title: Senior Vice President and Chief Financial Officer

GUARANTORS:                                   ANSCO & ASSOCIATES, LLC,

	
  

	
a Delaware limited liability company

APEX DIGITAL, LLC,

	
  

	
a Delaware limited liability company

	
  

	
BROADBAND EXPRESS, LLC,

	
  

	
a Delaware limited liability company

	
  

	
BROADBAND INSTALLATION SERVICES, LLC,

	
  

	
a Delaware limited liability company

C-2 UTILITY CONTRACTORS, LLC

	
  

	
a Delaware limited liability company

CABLE CONNECTORS, LLC

	
  

	
a Delaware limited liability company

CABLECOM, LLC,

	
  

	
a Delaware limited liability company

CABLECOM OF CALIFORNIA, INC.,

	
  

	
a Delaware corporation

CAN-AM COMMUNICATIONS, INC.,

	
  

	
a Delaware corporation

CAVO BROADBAND COMMUNICATIONS, LLC,

	
  

	
a Delaware limited liability company

CERTUSVIEW LEASING, LLC,

	
  

	
a Delaware limited liability company

By:  /s/ H. Andrew DeFerrari                                                                   

Name: H. Andrew DeFerrari

Title: Treasurer

[Signatures continue on following page]

  

  

  

COMMUNICATIONS CONSTRUCTION GROUP, LLC,

	
  

	
a Delaware limited liability company

DYCOM CAPITAL MANAGEMENT, INC.,

	
  

	
a Delaware corporation

DYCOM CORPORATE IDENTITY, INC.,

	
  

	
a Delaware corporation

	
  

	
DYCOM IDENTITY, LLC,

	
  

	
a Delaware limited liability company

	
  

	
DYCOM INVESTMENTS, INC.,

	
  

	
a Delaware corporation

ERVIN CABLE CONSTRUCTION, LLC,

	
  

	
a Delaware limited liability company

GLOBE COMMUNICATIONS, LLC,

	
  

	
a North Carolina limited liability company

INSTALLATION TECHNICIANS, LLC,

a Florida limited liability company

IVY H. SMITH COMPANY, LLC,

	
  

	
a Delaware limited liability company

LAMBERT’S CABLE SPLICING COMPANY, LLC,

	
  

	
a Delaware limited liability company

LOCATING, INC.,

a Washington corporation

NICHOLS CONSTRUCTION, LLC,

a Delaware limited liability company

NIELS FUGAL SONS COMPANY, LLC,

a Delaware limited liability company

By: /s/ H. Andrew DeFerrari                                                                   

Name: H. Andrew DeFerrari

Title: Treasurer

[Signatures continue on following page]

  

  

  

NIELS FUGAL SONS COMPANY OF CALIFORNIA, INC.,

a Delaware corporation

POINT TO POINT COMMUNICATIONS, INC.,

a Louisiana corporation

PRECISION VALLEY COMMUNICATIONS OF VERMONT, LLC, a Delaware limited liability company

PRINCE TELECOM, LLC

a Delaware limited liability company

PRINCE TELECOM OF CALIFORNIA, INC.,

a Delaware corporation

RJE TELECOM, LLC,

a Delaware limited liability company

RJE TELECOM OF CALIFORNIA, INC.,

a Delaware corporation

STAR CONSTRUCTION, LLC,

	
  

	
a Delaware limited liability company

	
  

	
STEVENS COMMUNICATIONS, LLC,

	
  

	
a Delaware limited liability company

S.T.S., LLC,

	
  

	
a Tennessee limited liability company

TCS COMMUNICATIONS, LLC,

	
  

	
a Delaware limited liability company

	
  

	
TESINC, LLC,

	
  

	
a Delaware limited liability company

	
  

	
TESINC OF CALIFORNIA, INC.,

	
  

	
a Delaware corporation

By:  /s/ H. Andrew DeFerrari                                                                   

Name: H. Andrew DeFerrari

Title: Treasurer

[Signatures continue on following page]

  

  

  

	
  

	
TRIPLE-D COMMUNICATIONS, LLC,

	
  

	
a Delaware limited liability company

U G T I,

	
  

	
a California corporation

	
  

	
UNDERGROUND SPECIALTIES, LLC,

	
  

	
a Delaware limited liability company

UTILIQUEST, LLC,

	
  

	
a Georgia limited liability company

	
  

	
WHITE MOUNTAIN CABLE CONSTRUCTION, LLC,

	
  

	
a Delaware limited liability company

By: /s/ H. Andrew DeFerrari                                                                   

Name: H. Andrew DeFerrari

Title: Treasurer

	
  

	
MIDTOWN EXPRESS, LLC,

	
  

	
a Delaware limited liability company

By:  /s/Joseph Danno                                                              

Name: Joseph Danno

Title: President

OSP SERVICES, LLC,

	
  

	
a Delaware limited liability company

By: /s/ Marvin Glaser                                                               

Name: Marvin Glaser

Title: President

[Signatures continue on following page]

  

  

  

ADMINISTRATIVE

AGENT:                                           BANK OF AMERICA, N.A.,

             as Administrative Agent

By: /s/ Chris Burns                                                      

Name: Chris Burns

Title: Vice President

  

  

  

LENDERS:                                           BANK OF AMERICA, N.A.,

              as a Lender, L/C Issuer and Swingline Lender

By:  /s/ Chris Burns                                                    

Name: Chris Burns

Title: Vice President

  

  

  

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender

By: /s/ Ben Wright                                                      

Name: Ben Wright  

Title: Vice President

  

  

  

BRANCH BANKING AND TRUST COMPANY,

as a Lender

By: /s/ Preston W. Bergen                                                      

Name: Preston W. Bergen        

Title: Senior Vice President

  

  

  

RBS CITIZENS, N.A.,

as a Lender

By: /s/ Kerry McElhiney                                                      

Name: Kerry McElhiney

Title: Vice President

  

  

  

PNC BANK, NATIONAL ASSOCIATION,

as a Lender

By: /s/ Jose Mazariegos                                                    

Name: Jose Mazariegos  

Title: Senior Vice President

  

  

  

REGIONS BANK,

as a Lender

By: /s/ Stephen Hanas                                                      

Name: Stephen Hanas 

Title: Senior Vice President

  

  

  

SUNTRUST BANK,

as a Lender

By: /s/ Baerbel Freudenthaler                                                      

Name: Baerbel Freudenthaler          

Title: Director

  

  

  

COMPASS BANK,

as a Lender

By: /s/ Peter R. Lewin                                                      

Name: Peter R. Lewin

Title:Vice Presidentex10-1_010611.htm

Exhibit 10.1

 

TRANSITION EMPLOYMENT AGREEMENT

This Transition Employment Agreement (the “Agreement”) is made and entered into effective as of December 31, 2010 (the “Effective Date”) by and between Healthways, Inc., a Delaware corporation (“Healthways”) and Mary A. Chaput (“Employee”).  Healthways and Employee are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

 

WITNESSETH:

 

WHEREAS, Healthways desires to hire Employee to perform certain transition services for Healthways identified in Exhibit A attached hereto, as may be amended from time to time by agreement of the Parties (the “Transition Services”); and

 

WHEREAS, Employee has the experience and qualifications necessary to provide the Transition Services.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter expressed, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

 

SECTION 1.

 

AT WILL EMPLOYEE STATUS; DUTIES AND RESPONSIBILITIES

 

1.1 At Will Employee Status: Employee and Healthways acknowledge and agree that the Amended and Restated Employment Agreement dated as of December 19, 2008 by and between Healthways and Employee (the “Employment Agreement”) is hereby terminated, effective as of the Effective Date, and neither Party has any further obligation thereunder.  Employee acknowledges that his or her employment with Healthways constitutes at-will employment, and that either Employee or Healthways can terminate this relationship at any time, with or without cause and with or without notice, and in all such events without any liability to Healthways, except as expressly set forth in this Agreement.

 

1.2 Transition Services. Healthways hereby employs Employee, and Employee hereby accepts employment with Healthways, to provide the Transition Services. Employee, in performing the Transition Services, shall have the duties and responsibilities assigned to him or her from time to time by Healthways, including, but not limited to, those described in the attached Exhibit A and as may be amended from time to time by the mutual agreement of the Parties.

 

1.3 Time Commitment. From the Effective Date of this Agreement to the termination of this Agreement, Employee agrees to devote such time and effort to performing such duties as shall be reasonably required in connection with the Transition Services. Employee shall maintain records with respect to the time spent in the performance of Employee’s duties and responsibilities hereunder and shall submit such records to Healthways as reasonably requested.

 

1.4 Compliance with Law and Standards. Employee shall at all times comply with all material applicable laws, rules and regulations of any and all governmental authorities and the applicable standards, bylaws, rules, compliance programs, policies and procedures of Healthways that are disclosed or made available to Employee.  Employee further agrees that Employee will not engage in any conduct which, in the reasonable determination of Healthways, adversely affects the image or business of Healthways or would impair in any material respect Employee’s ability to carry out Employee’s duties hereunder except as otherwise required by a court, law, governmental agency or regulation.

 

  

  

  

1.5 Ownership of Intellectual Property. Employee acknowledges and agrees that all of the work product or deliverables produced or developed by Employee during his or her employment with Healthways, either alone or in conjunction with others, including, without limitation, all technology of any nature whatsoever, all notes, records, drawings, designs, inventions, improvements, developments, discoveries, trade secrets, and patentable or copyrightable material which relate, directly or indirectly, in any manner to the subject matter of this Agreement, including any derivative works of any of the foregoing (collectively the “Work Product”), is the sole and exclusive property of Healthways. Employee agrees that the development of the Work Product is a “work made for hire” within the meaning of the Copyright Act of 1976, as amended. Employee hereby assigns to Healthways, without further compensation, all of its right, title and interest (whether arising prior to this Agreement, now in existence or hereafter arising) in and to the Work Product, in the United States and elsewhere. Upon request, Employee will sign all applications, assignments, instruments and papers and perform all acts necessary or desired by Healthways to assign the Work Product, or any portion thereof, fully and completely to Healthways and to enable Healthways, its successors and assigns to secure and enjoy the full and exclusive benefits and advantages thereof The Work Product shall be subject to Employee’s obligations of confidentiality contained in Section 5.1 hereof.

 

SECTION 2.

 

COMPENSATION

 

2.1 Compensation.

 

2.1.1 In consideration of Employee’s agreement to terminate the Employment Agreement, for a period beginning on the Effective Date and ending on the date that is 18 months after the Effective Date, Healthways will pay employee a Base Salary equal to $390,173.68 per annum (“Base Salary”), payable periodically at regular payroll intervals in accordance with Healthways’ payroll policies as in effect from time to time.  In addition, the Employee will receive an additional amount consisting of six (6) additional months of the Employee’s Base Salary (payable periodically at regular payroll intervals in accordance with Healthways’ payroll policies as in effect from time to time) upon her execution of a full release of claims in favor of Healthways (the “Release”) upon the termination of Employee’s employment with Healthways.  In addition, (i) all of Employee’s outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives (collectively “Awards”) shall vest, effective as of the Effective Date, and all stock options so vested shall remain exercisable as provided for in the applicable Award agreements by reason of Early Retirement (as defined in the 2007 Stock Incentive Plan, as amended), (ii) all amounts contributed by Healthways to Healthways’ Capital Accumulation Plan (“CAP”) as of December 31, 2010 for the benefit of Employee shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect from time to time, and (iii) Healthways shall deem an Accelerated Vesting Event (as defined in the applicable Performance Cash Award Agreement) with respect to performance cash awards previously granted to Employee to have occurred for all amounts earned by Employee through the Performance Cycles (as defined in the applicable Performance Cash Award Agreement) ended December 31, 2009 and December 31, 2010.  Employee shall not be eligible to receive any new long-term incentive awards or participate in long-term incentive plans, including but not limited to stock options, restricted stock, restricted stock units, other equity incentives, performance cash, and CAP, for periods beginning after the Effective Date.

 

2.1.2 Employee shall be entitled to receive such bonus, if any, for fiscal 2010 as shall be determined upon the recommendation of Chief Executive Officer by the Board of Directors of Healthways (or any designated Committee of the Board of Directors comprised solely of independent directors), which shall be paid in accordance with the terms and conditions of the bonus plan established for Healthways.  Employee shall not be entitled to earn any bonus award for periods beginning after the Effective Date.

 

  

2

  

2.1.3 For a period beginning as of the Effective Date and ending on the date that is 18 months after the Effective Date, Employee shall be entitled to participate if permitted under Healthways’ group medical insurance and group medical benefits at the same rate as then in effect for Healthways’ other employees; provided, that Employee shall be entitled to participate under such plans for an additional six months in the event Employee executes the Release.

 

2.1.4 During the Initial Term of this Agreement, Healthways will pay Employee a transition salary at a rate equal to $100,000 per annum at regular payroll intervals in accordance with Healthways’ payroll policies as in effect from time to time.  At the end of the Initial Term of this Agreement and in consideration of the services performed by Employee hereunder, Healthways shall pay Employee a completion bonus in an amount equal to $100,000 for the successful achievement, as determined by the Chief Executive Officer of the Company in his sole discretion, of the Transition Services (the “Bonus”) payable no later than January 31, 2012; provided that if this Agreement is terminated by either party prior to the end of the Initial Term, then the amount of Bonus that shall be payable shall be determined by the Chief Executive Officer of the Company in his sole discretion.

 

2.2 Expenses. For approved out-of-pocket properly documented expenses, Employee shall remit receipts at the end of each month for timely reimbursement.

 

SECTION 3.

 

INDEMNIFICATION

 

3.1 Employee shall fully, completely and unconditionally indemnify and hold Healthways and its directors, officers, employees, agents, shareholders and affiliates, if any, harmless from and against any damage, suit, action, proceeding, claim, demand, judgment, expenses (including without limitation costs of judgments, settlements, court costs and reasonable attorneys’ fees and costs) and liability of any kind arising out of or relating to any negligence, omission, act or willful misconduct of in connection with the performance of the Transition Services under this Agreement.

 

SECTION 4.

 

TERM AND TERMINATION

 

4.1 Term. The term of this Agreement shall begin on the Effective Date and shall end on December 31, 2011 (the “Initial Term”), unless terminated sooner as provided herein. Thereafter, if mutually agreed in writing, this Agreement shall renew on a month-to-month basis (each, a “Renewal Term”, the Initial Term and any Renewal Term shall be referred to collectively as the “Term”).

 

4.2 Termination by Healthways for Cause. Healthways may terminate this Agreement at any time upon the occurrence of any of the following: (a) Employee’s repeated failure to perform timely any of the duties as set forth in this Agreement; (b) Employee’s conviction of any crime punishable as a felony; commission of any act or omission involving dishonesty or fraud with respect to Healthways, any of its affiliates or any of their respective customers or suppliers, (c) Employee’s professional misconduct tending to bring Healthways or any of its affiliates into public disgrace or disrepute, (d) the death, disability or mental incompetence of Employee; or (e) suspension or exclusion of Employee from any federal or state health care program.

 

4.3 Termination Without Cause. This agreement may be terminated by Healthways at any time for any reason and without cause, upon thirty (30) days written Notice and all transition salary through such date due to Employee under Section 2.1.4 will be reconciled and paid with no further obligations on either party.

 

  

3

  

4.4 Payments Upon Termination. Upon a termination of this Agreement for any reason whatsoever pursuant to this Section 4, Employee shall be entitled to (i) all compensation accrued hereunder through the Termination Date (including any payments that are being made in arrears); and (ii) expense reimbursement pursuant to Section 2 through the date of termination with no further payment obligation hereunder on the part of Healthways.

 

4.5 Obligations. Upon termination, each Party’s obligations shall cease with regard to the other, except for Healthways’ obligations under Sections 2.1.1, 2.1.2, and 2.1.3, and Healthways shall be obligated to pay, within thirty (30) days of the Termination Date, any unpaid amounts owed to Employee for Transition Services performed pursuant to this Agreement prior to termination.

 

SECTION 5.

 

CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION

 

5.1 Confidentiality, Non-competition, Non-solicitation:

 

5.1.1 Employee acknowledges that (a) the business of providing care support services and health support services in which Healthways is engaged (the “Business”) is intensely competitive and that Employee’s employment by Healthways will require that Employee have access to and knowledge of confidential information of Healthways relating to its business plans, financial data, marketing programs, client information, contracts and other trade secrets, in each case other than as and to the extent such information is generally known or publicly available through no violation of this Agreement by Employee; (b)  the use or disclosure of such information other than in furtherance of the Business may place Healthways at a competitive disadvantage and may do damage, monetary or otherwise, to the Business; and (c) the engaging by Employee in any of the activities prohibited by this Section shall constitute improper appropriation and/or use of such information. Employee expressly acknowledges the trade secret status of Healthways’ confidential information and that the confidential information constitutes a protectable business interest of Healthways. Other than as may be required in the performance of his or her duties, Employee expressly agrees not to divulge such confidential information to anyone outside Healthways without prior permission.

 

5.1.2 Healthways (which shall be construed to include Healthways, its subsidiaries and their respective affiliates) and Employee agree that for a period of eighteen (18) months after the date of termination of Employee’s employment with Healthways:

 

5.1.2.1 Employee shall not engage in Competition, as defined below, with Healthways or its subsidiaries within any market where Healthways is conducting the Business at the time of termination of Employee’s employment hereunder. For purposes of this Agreement, “Competition” by Employee shall mean Employee’s being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting him or her name to be used in connection with the activities of any entity engaged in the Business, provided that, it shall not be a violation of this sub-paragraph for Employee to become the registered or beneficial owner of less than five percent (5%) of any class of the capital stock of any one or more competing corporations registered under the 1934 Act, provided that, Employee does not participate in the business of such corporation until such time as this covenant expires; and

 

5.1.2.2  Employee further agrees that he or she will not, directly or indirectly, for his or her benefit or for the benefit of any other person or entity, do any of the following: (a) solicit from any customer, doing business with Healthways as of Employee’s termination, business of the same or of a similar nature to the Business of Healthways with such customer; (b) solicit from any known potential customer of Healthways business of the same or of a similar nature to that which, to the knowledge of Employee, has been the subject of a written or oral bid, offer or proposal by Healthways, or of substantial preparation with a view to making such a bid, proposal or offer, within eighteen (18) months prior to Employee’s termination; or (c) recruit or solicit the employment or services of any person who was employed by Healthways upon termination of Employee’s employment and is employed by Healthways at the time of such recruitment or solicitation.

 

  

4

  

5.1.2.3  Employee acknowledges that the services to be rendered by him or her to Healthways are of a special and unique character, which causes this Agreement to be of significant value to Healthways, the loss of which may not be reasonably or adequately compensated for by damages in an action at law, and that a breach or threatened breach by him or her of any of the provisions contained in this Section will cause Healthways irreparable injury. Employee therefore agrees that Healthways will be entitled, in addition to any other right or remedy, to a temporary, preliminary and permanent injunction, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining Employee from any such violation or threatened violations. Employee acknowledges that the terms of this Section 5.1 and its obligations are reasonable and will not prohibit him or her from being employed or employable in the health care industry.

 

5.1.3 If any one or more of the provisions contained in this Agreement shall be held to be excessively broad as to duration, activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the fullest extent permitted by law.

 

SECTION 6.

 

GENERAL PROVISIONS

 

6.1 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Tennessee.

 

6.2 Waiver of Breach. The waiver by a party of any breach of any provision of this  Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision hereof by that party.

 

6.3 Severability. The invalidity or unenforceability of any provision of this Agreement will not effect the validity or enforceability of any other provision.

 

6.4 Entire Agreement: Amendments. This Agreement and the Exhibits hereto form the entire agreement of the parties and supersede any prior agreements between them with respect to the subject matter hereof.

 

6.5 Waiver. Waiver of any term or provision of this Agreement or forbearance to enforce any term or provision by either party shall not constitute a waiver as to any subsequent breach or failure of the same term or provision or a waiver of any other term or provision of this Agreement. Amendments may be made to this Agreement only after written approval of both Healthways and Employee.

 

6.6 Assignment. Employee shall not assign the rights, duties or obligations hereunder.

 

6.7 Notice. Any notice required or permitted to be given under this Agreement shall be sufficient if written and delivered in person, by fax or sent by Registered Mail, return receipt requested, as follows:

  

5

  

	
If to Healthways:

	  	
If to Employee:

	  	  	  
	
Healthways, Inc.

701 Cool Springs Blvd.

Franklin, TN 37067

Attn: Ben Leedle

	  	  	  
	  
	  
	  

6.8 Litigation. In the event that a dispute between the parties results in litigation, in addition  to any other relief to which it may be entitled, the prevailing party shall be reimbursed for reasonable attorneys’ fees and all other reasonable costs of that litigation.

 

6.9 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties, their successors and their permitted assigns.

 

6.10 Non-Solicitation. During the term of this Agreement and for one (1) year thereafter, neither party shall solicit for employment or otherwise grant employment to any employee of the other.

 

6.11 Survival.  The provisions of Sections 1.1, 1.4, 5.1, 6.1, 6.10 and 6.11 hereof shall survive the termination for any reason or expiration of this Agreement for the period described or referenced in each such Section or, if no period is described or referenced in such Section, indefinitely.

 

[Signature page follows]

 

 

  

6

  

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

                                HEALTHWAYS, INC. 

By:  /s/ Ben R. Leedle, Jr.                      

 

Name:  Ben R. Leedle, Jr.                       

Title:   CEO                                               

 

Date:  12/31/2010                                    

EMPLOYEE

 

/s/ Mary A. Chaput                              

                          Mary A. Chaput

  

7

  

EXHIBIT A

 

SCOPE OF WORK

Employee will provide professional services as determined or requested by the Chief Executive Officer.

  

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]