1001-00007 · Client 1001 · Transaction Documents

post-closing-employment-agreements.docx DOCUMENT M&A / Corporate

30 / 35 ← → ✕

Contract analysis Extract to table

EMPLOYMENT AGREEMENT

DANIEL BURCH Chief Executive Officer

ARDENT HEALTHCARE HOLDINGS INC.

Dated as of April 18, 2025

Right-click to update Table of Contents

EMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement"), dated as of April 18, 2025 (the "Effective Date"), is entered into by and between Ardent Healthcare Holdings Inc., a Delaware corporation (the "Company"), with operational headquarters located at 4200 West End Avenue, Suite 1100, Nashville, Tennessee 37205 (formerly the headquarters of MedVance Health Systems, Inc.) and a registered address at 1209 Orange Street, Wilmington, Delaware 19801, and Daniel Burch, an individual residing at the address on file with the Company ("Executive").

RECITALS

WHEREAS, the Company is a wholly owned subsidiary of Ardent Capital Partners III LP, a Delaware limited partnership ("Parent"), which is managed by its general partner, Ardent Capital Management III LLC, a Delaware limited liability company ("Ardent GP");

WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of February 10, 2025 (the "Purchase Agreement"), among the Company, the sellers named therein, and MedVance Health Systems, Inc., a Tennessee corporation (the "Target"), the Company acquired all of the outstanding equity interests of the Target, with the closing of such acquisition occurring on April 18, 2025 (the "Closing");

WHEREAS, Executive previously served as the Chief Executive Officer of the Target and, in connection with the transactions contemplated by the Purchase Agreement, is a holder of rollover equity in the Company and/or Parent;

WHEREAS, the Company desires to employ Executive, and Executive desires to accept employment with the Company, on the terms and conditions set forth herein, effective as of the Closing; and

WHEREAS, this Agreement supersedes any and all prior employment agreements, offer letters, compensation arrangements, or other agreements or understandings between Executive and the Target or any of its affiliates relating to the employment of Executive.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1 — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

1.1 "Accrued Obligations" means, collectively, (a) any earned but unpaid Base Salary through the Termination Date, (b) any accrued but unused paid time off in accordance with the Company's policies, (c) any vested benefits under any employee benefit plan in which Executive participates, determined in accordance with the terms of the applicable plan, and (d) any unreimbursed business expenses incurred by Executive prior to the Termination Date in accordance with Section 4.5 of this Agreement.

1.2 "Affiliate" means, with respect to any person or entity, any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such person or entity, including, without limitation, Parent and Ardent GP. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract, or otherwise.

1.3 "Board" means the Board of Directors of the Company.

1.4 "Cause" means the occurrence of any one or more of the following events:

(i) a material breach by Executive of any provision of this Agreement, provided that the Company shall have given Executive written notice of such breach and Executive shall have failed to cure such breach within thirty (30) days following receipt of such notice (to the extent such breach is reasonably susceptible to cure);

(ii) the conviction of Executive of, or the entry of a plea of guilty or nolo contendere by Executive to, a felony or any crime involving moral turpitude under the laws of the United States or any state thereof;

(iii) willful misconduct or gross negligence by Executive in the performance of Executive's duties under this Agreement that is materially injurious to the Company or any of its Affiliates;

(iv) fraud, embezzlement, or misappropriation of funds, assets, or property of the Company or any of its Affiliates by Executive;

(v) a material violation by Executive of any written policy of the Company that has been provided or made available to Executive, including, without limitation, policies relating to anti-harassment, anti-discrimination, substance abuse, ethical conduct, and compliance with applicable healthcare laws and regulations;

(vi) the willful failure or refusal by Executive to follow the lawful and reasonable directives of the Board that are consistent with the scope and nature of Executive's duties and responsibilities hereunder, provided that the Company shall have given Executive written notice of such failure and Executive shall have failed to cure such failure within thirty (30) days following receipt of such notice; or

(vii) the exclusion or debarment of Executive from participation in any Federal Healthcare Program (as defined in 42 U.S.C. § 1320a-7b(f)), including, without limitation, Medicare, Medicaid, and TRICARE.

For purposes of this definition, no act or failure to act by Executive shall be considered "willful" if performed or omitted in good faith and with a reasonable belief that such act or omission was in the best interests of the Company.

1.5 "Change of Control" means any of the following events:

(a) a sale, transfer, or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to any person or group of persons (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) other than an Affiliate of Parent;

(b) a merger, consolidation, recapitalization, or similar transaction involving the Company (or Parent) following which the holders of equity interests in the Company (or Parent) immediately prior to such transaction hold less than fifty percent (50%) of the combined voting power of the equity interests of the surviving or resulting entity;

(c) the acquisition by any person or group (other than Parent, Ardent GP, or any of their respective Affiliates) of more than fifty percent (50%) of the voting equity interests of the Company (or Parent); or

(d) the sale by Parent or its Affiliates of their equity interests in the Company to a person or group that is not an Affiliate of Parent, resulting in Parent and its Affiliates holding less than fifty percent (50%) of the voting equity interests of the Company.

Notwithstanding the foregoing, none of the following shall constitute a Change of Control: (I) an initial public offering of the equity securities of the Company, Parent, or any successor thereof; (II) any internal reorganization, restructuring, or reclassification of equity interests among the Company, Parent, Ardent GP, or their respective Affiliates; or (III) any transfer of equity interests among Affiliates of Parent.

1.6 "CIC Protection Period" means the period commencing ninety (90) days prior to and ending twenty-four (24) months following the consummation of a Change of Control.

1.7 "Confidential Information" means all non-public, proprietary, or confidential information and data of the Company or any of its Affiliates or subsidiaries, whether in written, oral, electronic, or other form, including, without limitation: (a) patient data and protected health information (as defined under HIPAA); (b) payor contracts and reimbursement strategies, including managed care contracts, fee schedules, and capitation arrangements; (c) financial data, projections, budgets, and business plans; (d) proprietary clinical protocols, clinical pathways, and care management programs; (e) marketing strategies and competitive analyses; (f) information relating to existing or prospective acquisitions, joint ventures, or business combinations; (g) trade secrets (as defined under applicable law, including the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. § 47-25-1701 et seq.); (h) personnel information, compensation data, and organizational strategies; (i) information relating to information technology systems, software, and data architectures; and (j) any other information that the Company or its Affiliates designate as confidential or that, by its nature, a reasonable person would understand to be confidential.

1.8 "Disability" means Executive's inability, due to physical or mental incapacity, to perform the essential functions of Executive's position under this Agreement, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or two hundred seventy (270) calendar days in any three hundred sixty-five (365)-day period, as determined by an independent physician selected by the Board and reasonably acceptable to Executive (or Executive's legal representative). Executive shall cooperate in good faith with any request by the Board to submit to a medical examination for the purpose of making such determination.

1.9 "Good Reason" means the occurrence, without Executive's prior written consent, of any one or more of the following events:

(i) a material diminution in Executive's Base Salary, defined as a reduction of more than ten percent (10%) from the then-current Base Salary, unless such reduction is part of an across-the-board reduction applicable to all senior executives of the Company;

(ii) a material diminution in Executive's authority, duties, or responsibilities, including, without limitation, any requirement that Executive report to any person or body other than the Board;

(iii) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from Nashville, Tennessee;

(iv) a material breach by the Company of any provision of this Agreement; or

(v) the failure of a successor entity to assume this Agreement in connection with a Change of Control as required by Section 10.7 hereof.

Notwithstanding the foregoing, Executive's resignation shall not constitute a resignation for Good Reason unless (A) Executive provides the Company with written notice specifying in reasonable detail the condition giving rise to Good Reason within ninety (90) days of the initial occurrence of such condition, (B) the Company fails to cure such condition within thirty (30) days following receipt of such notice (the "Cure Period"), and (C) Executive's resignation is effective within thirty (30) days following the expiration of the Cure Period.

1.10 "Plan" means the Management Equity Incentive Plan of Ardent Capital Partners III LP, as adopted by Ardent GP, as may be amended from time to time.

1.11 "Profits Interest Award Agreement" means the separate Class B Profits Interest Award Agreement between Parent and Executive to be entered into on or promptly following the Effective Date pursuant to the Plan.

1.12 "Release" means the general release of claims substantially in the form attached hereto as Exhibit A, as may be updated by the Company to reflect changes in applicable law.

1.13 "Restricted Period" means the period commencing on the Effective Date and ending twenty-four (24) months following the Termination Date.

1.14 "Restricted Territory" means (a) the States of Tennessee, Alabama, Georgia, and Kentucky, and (b) any other state in the United States in which the Company or any of its subsidiaries operates healthcare facilities or has executed a letter of intent for the development, acquisition, or operation of a new healthcare facility as of the Termination Date.

1.15 "Rollover Subscription Agreement" means the Rollover Subscription Agreement entered into by Executive in connection with the Purchase Agreement, pursuant to which Executive contributed rollover equity in connection with the transactions contemplated by the Purchase Agreement.

1.16 "Termination Date" means the date on which Executive's employment with the Company terminates for any reason.

SECTION 2 — EMPLOYMENT; POSITION; DUTIES

2.1 Position. Effective as of the Effective Date, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, as the Chief Executive Officer of the Company. In such capacity, Executive shall report directly and exclusively to the Board. Executive's principal place of employment shall be at the Company's operational headquarters in Nashville, Tennessee, subject to reasonable travel as may be required in connection with the performance of Executive's duties hereunder.

2.2 Duties. Executive shall be a full-time employee of the Company and shall devote substantially all of Executive's business time, attention, skill, and energy to the affairs of the Company and its subsidiaries. Executive shall have general management responsibility for all operations, strategic planning, business development, and day-to-day affairs of the Company and its subsidiaries, in each case subject to the oversight, direction, and policies of the Board. Executive shall faithfully and diligently perform such duties and responsibilities as are customarily associated with the position of Chief Executive Officer of an enterprise of the size and nature of the Company, together with such additional duties and responsibilities as may be reasonably assigned to Executive from time to time by the Board, consistent with Executive's position. If appointed by the Board, Executive shall serve as a member of the Board without additional compensation (other than as provided in this Agreement) and shall serve as an officer, director, or manager of any subsidiary or Affiliate of the Company as may be reasonably requested by the Board from time to time, in each case without additional compensation.

2.3 Exclusivity. During the term of Executive's employment hereunder, Executive shall not, without the prior written consent of the Board, engage in any other business activity, whether or not such activity is pursued for profit; provided, however, that nothing in this Section 2.3 shall preclude Executive from:

(a) making passive investments in the equity securities of any publicly traded company, so long as such investment does not exceed two percent (2%) of the outstanding securities of any class of such company and does not require Executive to devote any material time or attention to the management or operations of such company;

(b) serving on the boards of directors or advisory boards of charitable, educational, civic, or industry-association organizations, subject to prior written approval of the Board (such approval not to be unreasonably withheld), and provided that such service does not materially interfere with the performance of Executive's duties hereunder; or

(c) managing Executive's personal and family investments and affairs, provided that such activities do not materially interfere with the performance of Executive's duties hereunder.

As of the Effective Date, the Board has approved the following outside board positions held by Executive: none. Executive shall promptly notify the Board of any proposed new outside board position prior to accepting such position.

SECTION 3 — TERM

3.1 Initial Term. The term of Executive's employment under this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years, expiring on April 17, 2028 (the "Initial Term"), unless earlier terminated in accordance with the provisions of Section 5 hereof.

3.2 Renewal. Upon expiration of the Initial Term, this Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term," and together with the Initial Term, the "Term"), unless either party provides written notice of non-renewal to the other party at least ninety (90) days prior to the expiration of the then-current Term. For the avoidance of doubt, if the Company provides notice of non-renewal (other than in circumstances constituting Cause), such non-renewal shall be treated as a termination of Executive's employment by the Company without Cause for purposes of Section 6 hereof, effective as of the last day of the then-current Term.

SECTION 4 — COMPENSATION

4.1 Base Salary. During the Term, the Company shall pay Executive an annualized base salary of Six Hundred Twenty-Five Thousand Dollars ($625,000) (the "Base Salary"), payable in accordance with the Company's regular payroll practices as in effect from time to time (currently semi-monthly). The Base Salary shall be subject to annual review by the Board (or a compensation committee thereof, if established), and the Board may, in its sole discretion, increase the Base Salary from time to time; provided, however, that the Base Salary shall not be decreased below Six Hundred Twenty-Five Thousand Dollars ($625,000) per annum at any time during the Term without Executive's prior written consent (except as may constitute Good Reason under Section 1.9).

4.2 Annual Bonus. For each fiscal year of the Company during the Term, Executive shall be eligible to earn an annual performance bonus (the "Annual Bonus") with a target amount equal to one hundred percent (100%) of Executive's then-current Base Salary (the "Target Bonus"), which Target Bonus at the initial Base Salary equals Six Hundred Twenty-Five Thousand Dollars ($625,000). The actual Annual Bonus payable with respect to any fiscal year may range from zero percent (0%) to two hundred percent (200%) of the Target Bonus, based upon the achievement of annual performance objectives established by the Board (or a compensation committee thereof) for such fiscal year. Such performance objectives shall include financial metrics (including, without limitation, revenue, Adjusted EBITDA, and such other financial metrics as the Board may determine) and individual and strategic objectives, in each case as communicated to Executive within sixty (60) days following the commencement of the applicable performance period (or, with respect to the first bonus period, within thirty (30) days following the Effective Date).

(a) Pro-Ration. The Annual Bonus shall be pro-rated for any partial fiscal year during the Term. The first bonus period shall be the period commencing on April 18, 2025 and ending on December 31, 2025.

(b) Payment Timing. The Annual Bonus for any fiscal year shall be paid no later than March 15 of the fiscal year following the performance year to which such Annual Bonus relates, subject to the terms of this Agreement.

(c) Employment Requirement. Except as expressly provided in Section 5.5 and Section 6, Executive must remain continuously employed by the Company through the date on which the Annual Bonus is paid in order to earn and receive such Annual Bonus. No Annual Bonus or any portion thereof shall be considered earned or accrued until the date on which it is actually paid.

4.3 Equity Incentive Grant.

(a) Plan. Executive shall be eligible to participate in the Management Equity Incentive Plan of Ardent Capital Partners III LP (the "Plan"), to be adopted by Ardent GP on or prior to the Effective Date.

(b) Grant. Subject to the terms and conditions of the Plan and a separate Profits Interest Award Agreement to be entered into by Parent and Executive on or promptly following the Effective Date, Executive shall be granted Class B Profits Interests in Parent equal to three and one-half percent (3.50%) of the fully diluted equity of the Company (the "Profits Interests"). The Profits Interests shall be structured as "profits interests" for U.S. federal income tax purposes within the meaning of Revenue Procedures 93-27 and 2001-43, and Executive and Parent shall cooperate in good faith to effectuate such treatment.

(c) Vesting. The Profits Interests shall vest as follows: (I) twenty-five percent (25%) of the total Profits Interests shall vest on the first anniversary of the Effective Date; and (II) the remaining seventy-five percent (75%) of the total Profits Interests shall vest ratably on a quarterly basis over the three (3)-year period commencing on the first anniversary of the Effective Date (i.e., in twelve (12) equal quarterly installments), such that one hundred percent (100%) of the total Profits Interests shall be fully vested on the fourth anniversary of the Effective Date, in each case subject to Executive's continued employment with the Company through the applicable vesting date. Notwithstanding the foregoing, one hundred percent (100%) of the unvested Profits Interests shall become fully vested upon the consummation of a Change of Control, provided that Executive remains employed by the Company through the date of such Change of Control, or if Executive's employment is terminated by the Company without Cause or Executive resigns for Good Reason during the CIC Protection Period.

(d) Distribution Waterfall. Distributions with respect to the Profits Interests shall be made in accordance with the distribution waterfall set forth in the Amended and Restated Agreement of Limited Partnership of Parent (as may be further amended from time to time). Executive shall participate in distributions above an eight percent (8%) internal rate of return ("IRR") hurdle, as further specified in the limited partnership agreement of Parent and the Profits Interest Award Agreement.

(e) Rollover Equity. The Company and Executive acknowledge that Executive holds rollover equity in connection with the transactions contemplated by the Purchase Agreement with an approximate value of Seven Million Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($7,437,500), representing Executive's pro-rata share of management rollover equity. Such rollover equity is governed by the separate Rollover Subscription Agreement and the limited partnership agreement of Parent, and nothing in this Agreement shall modify or supersede the terms applicable to such rollover equity.

4.4 Employee Benefits. During the Term, Executive shall be eligible to participate in all employee benefit plans, programs, and arrangements maintained by the Company and made available to the Company's senior executives, as such plans, programs, and arrangements may be in effect from time to time, including, without limitation, health insurance (medical, dental, and vision), life insurance, short-term and long-term disability insurance, and the Company's 401(k) retirement savings plan (with company matching contributions as generally available to employees of the Company). The benefits provided to Executive shall be at least as favorable, in the aggregate, as those provided to Executive by the Target immediately prior to the Effective Date. Nothing in this Agreement shall be construed to require the Company to establish or maintain any particular benefit plan, program, or arrangement, or to prevent the Company from modifying, amending, or terminating any such plan, program, or arrangement in accordance with its terms and applicable law; provided, however, that the Company shall not take any such action that would materially and disproportionately reduce Executive's benefits relative to other similarly situated senior executives of the Company.

4.5 Expense Reimbursement. During the Term, the Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the performance of Executive's duties hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit documentation of such expenses within sixty (60) days of incurrence, and the Company shall reimburse Executive within thirty (30) days following the Company's receipt of proper documentation. In no event shall the amount of expenses eligible for reimbursement in one calendar year affect the amount of expenses eligible for reimbursement in any other calendar year.

4.6 Paid Time Off. During the Term, Executive shall be entitled to five (5) weeks (twenty-five (25) business days) of paid time off ("PTO") per calendar year, pro-rated for any partial calendar year. Accrual and carryover of unused PTO shall be governed by the Company's PTO policy as in effect from time to time and as applicable to senior executives of the Company. Executive shall schedule PTO at such times as are reasonably consistent with the business needs of the Company.

SECTION 5 — TERMINATION OF EMPLOYMENT

5.1 Termination by the Company for Cause. The Board may terminate Executive's employment hereunder for Cause at any time upon delivery of written notice to Executive specifying in reasonable detail the grounds for such termination. Where the applicable Cause event is subject to a cure period as provided in Section 1.4, Executive's employment shall not be terminated until the expiration of such thirty (30)-day cure period, provided that Executive fails to cure the applicable breach or failure within such period. Upon a termination for Cause, Executive shall be entitled to receive the Accrued Obligations only, payable in accordance with the Company's regular payroll practices and the terms of the applicable benefit plans. Executive shall not be entitled to any Annual Bonus, severance, or any other compensation or benefits following a termination for Cause, except as required by applicable law. The treatment of Executive's Profits Interests and any other equity awards upon a termination for Cause shall be governed by the Plan and the Profits Interest Award Agreement, which shall provide, among other things, that all unvested Profits Interests shall be immediately forfeited and that the Company (or Parent) shall have the right to repurchase vested Profits Interests at the lower of cost and fair market value.

5.2 Termination by the Company Without Cause. The Board may terminate Executive's employment hereunder without Cause at any time upon thirty (30) days' prior written notice to Executive (or, in the Company's sole discretion, payment of Executive's Base Salary in lieu of such notice for the notice period). A termination without Cause shall entitle Executive to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein. For the avoidance of doubt, a termination of Executive's employment by the Company for any reason other than Cause, death, or Disability shall constitute a termination without Cause for purposes of this Agreement.

5.3 Resignation for Good Reason. Executive may resign Executive's employment for Good Reason in accordance with the notice-and-cure procedure set forth in the definition of "Good Reason" in Section 1.9. A resignation for Good Reason shall be treated as a termination by the Company without Cause for all purposes under this Agreement and shall entitle Executive to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein.

5.4 Resignation Without Good Reason. Executive may resign Executive's employment without Good Reason at any time upon sixty (60) days' prior written notice to the Company. The Company may, in its sole discretion, elect to waive all or any portion of the notice period and accelerate Executive's Termination Date, in which case the Company shall pay Executive's Base Salary through the end of the originally noticed period. Upon a resignation without Good Reason, Executive shall be entitled to receive the Accrued Obligations only. Executive shall not be entitled to any Annual Bonus (other than any Annual Bonus for a prior fiscal year that has been earned but not yet paid as of the Termination Date, to the extent required under the terms of the applicable bonus program), severance, or any other compensation or benefits following a resignation without Good Reason, except as required by applicable law.

5.5 Death or Disability. Executive's employment shall terminate automatically upon Executive's death. The Company may terminate Executive's employment upon a determination of Disability in accordance with Section 1.8. Upon a termination by reason of death or Disability, Executive (or Executive's estate or legal representative, as applicable) shall be entitled to receive:

(a) the Accrued Obligations;

(b) a pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on actual performance for the full fiscal year and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (and in no event later than March 15 of the year following such performance year);

(c) twelve (12) months of Company-paid COBRA continuation coverage for Executive (or Executive's eligible dependents, as applicable), commencing as of the date Executive's (or Executive's eligible dependents') coverage under the Company's group health plans would otherwise terminate, with the Company paying the employer portion of the applicable premiums during such period; and

(d) with respect to Executive's Profits Interests, accelerated vesting of the tranche of unvested Profits Interests that would next vest following the Termination Date (the "Next Vesting Tranche"); all other unvested Profits Interests shall be forfeited.

5.6 Expiration of Term; Non-Renewal. If the Company provides Executive with notice of non-renewal of this Agreement in accordance with Section 3.2, and Executive's employment terminates as of the end of the then-current Term, such termination shall be treated as a termination by the Company without Cause for all purposes under this Agreement, effective as of the last day of the then-current Term, and Executive shall be entitled to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein. If Executive provides notice of non-renewal and Executive's employment terminates as of the end of the then-current Term, such termination shall be treated as a resignation without Good Reason and Executive shall be entitled to the Accrued Obligations only.

SECTION 6 — SEVERANCE PAYMENTS AND BENEFITS

6.1 Severance Upon Termination Without Cause or for Good Reason (Outside CIC Protection Period). Subject to Executive's execution and non-revocation of the Release in accordance with Section 6.4, and Executive's continued compliance with the covenants set forth in Section 7, in the event that Executive's employment is terminated by the Company without Cause (including by reason of non-renewal by the Company under Section 3.2) or Executive resigns for Good Reason, in either case at a time that is not during the CIC Protection Period, Executive shall be entitled to receive the following payments and benefits (collectively, the "Severance Benefits"), in addition to the Accrued Obligations:

(a) Cash Severance. A lump sum cash payment equal to one and one-half times (1.5×) Executive's Base Salary as in effect on the Termination Date (or, if the termination is in connection with a reduction in Base Salary that constitutes Good Reason, the Base Salary in effect immediately prior to such reduction), which amount at Executive's initial Base Salary equals Nine Hundred Thirty-Seven Thousand Five Hundred Dollars ($937,500). Such payment shall be made within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.

(b) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on actual performance for the full fiscal year and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (and in no event later than March 15 of the year following such performance year).

(c) Prior Year Bonus. If Executive's termination occurs after the end of a fiscal year but before the Annual Bonus for such fiscal year has been paid, and such Annual Bonus has been earned based on the Company's actual performance for such fiscal year, Executive shall receive such earned Annual Bonus, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year.

(d) COBRA Continuation. The Company shall pay, on Executive's behalf, the employer portion of the premiums for continued coverage under the Company's group health plans (medical, dental, and vision) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), for a period of eighteen (18) months following the Termination Date (or, if earlier, until Executive becomes eligible for coverage under another employer's group health plan), provided that Executive timely elects COBRA continuation coverage. If continuation of coverage under the Company's group health plans is not administratively feasible, the Company shall pay Executive a monthly cash amount equal to the employer portion of the applicable COBRA premiums for such eighteen (18)-month period, subject to applicable tax withholdings.

(e) Equity Treatment. The tranche of Executive's unvested Profits Interests that would next vest following the Termination Date (the "Next Vesting Tranche") shall become fully vested as of the Termination Date. All remaining unvested Profits Interests that do not constitute the Next Vesting Tranche shall be immediately forfeited as of the Termination Date. The treatment of Executive's vested Profits Interests (including the Next Vesting Tranche) shall thereafter be governed by the Plan, the Profits Interest Award Agreement, and the limited partnership agreement of Parent.

(f) Outplacement Services. The Company shall provide Executive with executive-level outplacement services from a provider selected by the Company, for a period of up to twelve (12) months following the Termination Date, at a cost to the Company not to exceed Thirty Thousand Dollars ($30,000).

6.2 Enhanced Severance Upon Termination Without Cause or for Good Reason During CIC Protection Period. Subject to Executive's execution and non-revocation of the Release in accordance with Section 6.4, and Executive's continued compliance with the covenants set forth in Section 7, in the event that Executive's employment is terminated by the Company without Cause or Executive resigns for Good Reason during the CIC Protection Period, Executive shall be entitled to receive the following payments and benefits (in lieu of and not in addition to the payments and benefits described in Section 6.1), in addition to the Accrued Obligations:

(a) Cash Severance. A lump sum cash payment equal to two times (2.0×) the sum of (I) Executive's Base Salary as in effect on the Termination Date (or, if higher, the Base Salary in effect immediately prior to the Change of Control or any reduction constituting Good Reason) plus (II) Executive's Target Bonus, which amount at Executive's initial rates equals Two Million Five Hundred Thousand Dollars ($2,500,000). Such payment shall be made within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.

(b) Pro-Rata Target Bonus. A pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on the Target Bonus (rather than actual performance) and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.

(d) COBRA Continuation. The Company shall pay, on Executive's behalf, the employer portion of the premiums for continued COBRA coverage (medical, dental, and vision) for a period of twenty-four (24) months following the Termination Date (or, if earlier, until Executive becomes eligible for coverage under another employer's group health plan), provided that Executive timely elects COBRA continuation coverage. If continuation of coverage is not administratively feasible, the Company shall pay Executive a monthly cash equivalent, subject to applicable tax withholdings.

(e) Equity Acceleration. One hundred percent (100%) of Executive's unvested Profits Interests shall become fully vested as of the Termination Date. The treatment of Executive's vested Profits Interests shall thereafter be governed by the Plan, the Profits Interest Award Agreement, and the limited partnership agreement of Parent.

(f) Outplacement Services. The Company shall provide Executive with executive-level outplacement services from a provider selected by the Company, for a period of up to eighteen (18) months following the Termination Date, at a cost to the Company not to exceed Fifty Thousand Dollars ($50,000).

6.3 Section 280G Cutback. In the event that any payment or benefit received or to be received by Executive under this Agreement or any other plan, arrangement, or agreement with the Company or any of its Affiliates (collectively, the "Total Payments") would constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), the Total Payments shall be reduced (but not below zero) to the extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Section 4999 of the Code, but only if and to the extent that such reduction would result in Executive receiving a greater aggregate after-tax benefit than Executive would receive without such reduction (taking into account the excise tax imposed under Section 4999 of the Code, any applicable federal, state, and local income and employment taxes, and any interest and penalties). This is a "best-net" approach, and the Company shall not provide a gross-up payment to Executive for any excise tax imposed under Section 4999 of the Code. Any reduction required by this Section 6.3 shall be applied in the following order: (I) first, any cash severance payments under Section 6.1(a) or Section 6.2(a), as applicable; (II) second, any pro-rata bonus payments under Section 6.1(b) or Section 6.2(b); (III) third, any COBRA payments under Section 6.1(d) or Section 6.2(d); and (IV) fourth, any acceleration of equity vesting under Section 6.1(e) or Section 6.2(e). The determination of whether any reduction is required and the amount of such reduction shall be made in good faith by a nationally recognized public accounting firm selected by the Company (the "Accounting Firm"), whose determination shall be conclusive and binding upon Executive and the Company. The costs and expenses of the Accounting Firm shall be borne by the Company.

6.4 Release. As a condition precedent to the receipt of any Severance Benefits under Section 6.1 or Section 6.2, Executive must execute and deliver to the Company a general release of claims in substantially the form attached hereto as Exhibit A (or such updated form as the Company may reasonably require to reflect changes in applicable law) within twenty-one (21) days following the Termination Date (or forty-five (45) days if Executive's termination is part of a group termination or exit incentive program subject to the requirements of the Older Workers Benefit Protection Act), and such release must become irrevocable upon the expiration of the applicable revocation period (seven (7) days following Executive's execution of the Release). No Severance Benefits shall be paid or provided until the Release has become irrevocable. If the combined consideration and revocation periods span two calendar years, any lump sum payment that would otherwise be paid in the first calendar year shall instead be paid on the first regularly scheduled payroll date in the second calendar year (or such earlier date as is permissible under Section 409A of the Code).

6.5 Section 409A Compliance. The payments and benefits provided under this Agreement are intended to be exempt from, or to comply with, the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder ("Section 409A"), and this Agreement shall be interpreted and administered consistent with such intent. Each payment made under this Agreement shall be treated as a separate payment for purposes of Section 409A. In no event shall Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement.

(a) Specified Employee Delay. Notwithstanding any other provision of this Agreement, if Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code on the Termination Date, any payment or benefit under this Agreement that constitutes nonqualified deferred compensation subject to Section 409A and that is payable on account of Executive's "separation from service" (within the meaning of Section 409A) shall not be paid until the first business day following the expiration of the six (6)-month period following the Termination Date (or, if earlier, the date of Executive's death) (the "Delayed Payment Date"). On the Delayed Payment Date, Executive shall receive a lump sum payment equal to the aggregate amount of all payments that were delayed pursuant to this Section 6.5(a), without interest.

(b) Reimbursements and In-Kind Benefits. Any reimbursement of expenses or in-kind benefits provided under this Agreement that constitutes nonqualified deferred compensation subject to Section 409A shall be subject to the following conditions: (I) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (II) the reimbursement of an eligible expense shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (III) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, all in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv).

SECTION 7 — RESTRICTIVE COVENANTS

7.1 Non-Competition. During Executive's employment with the Company and for the Restricted Period, Executive shall not, directly or indirectly, whether as an owner, partner, member, shareholder, investor, officer, director, employee, consultant, advisor, agent, independent contractor, or in any other capacity, own, manage, operate, control, be employed by, provide services to, consult for, or participate in the ownership, management, operation, or control of any business, enterprise, or entity that provides post-acute care, rehabilitation services (inpatient or outpatient), long-term care, skilled nursing, home health, hospice, or other healthcare services that are competitive with the businesses conducted by the Company or any of its subsidiaries as of the Termination Date, within the Restricted Territory. Notwithstanding the foregoing, passive ownership by Executive of not more than two percent (2%) of the outstanding securities of any class of any publicly traded company shall not constitute a violation of this Section 7.1, provided that Executive does not otherwise participate in or provide services to such company.

7.2 Non-Solicitation of Employees. During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any employee, independent contractor, or consultant of the Company or any of its subsidiaries (who was employed or engaged by the Company or any of its subsidiaries at any time during the twelve (12)-month period immediately preceding the Termination Date) to terminate, reduce, or modify such person's employment or engagement with the Company or any of its subsidiaries, or to accept employment or engagement with any other person or entity. Without limiting the generality of the foregoing, Executive shall not, during the Restricted Period, directly or indirectly, hire or engage, or cause to be hired or engaged, any such person.

7.3 Non-Solicitation of Business Relationships. During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, the business of any patient, customer, referral source, payor, supplier, or vendor of the Company or any of its subsidiaries with whom Executive had material contact or about whom Executive obtained Confidential Information during the last twenty-four (24) months of Executive's employment, for the purpose of providing services competitive with those provided by the Company or any of its subsidiaries. Without limiting the foregoing, the restrictions in this Section 7.3 shall expressly apply to Executive's relationships with BlueLine Health Plan of Tennessee and SouthPoint Insurance Co. and their respective affiliates, and all referral sources, physicians, and clinical partners with whom Executive had material contact during Executive's employment.

7.4 Confidentiality. Executive acknowledges that, during the course of Executive's employment with the Company (and previously with the Target), Executive has received and will receive Confidential Information of the Company and its Affiliates and subsidiaries. Executive agrees that, both during Executive's employment and at all times thereafter (the obligations under this Section 7.4 being perpetual in duration), Executive shall not, directly or indirectly, disclose, publish, communicate, or use for Executive's own benefit or the benefit of any other person or entity, any Confidential Information, except (a) in the performance of Executive's duties hereunder and in furtherance of the business interests of the Company, or (b) as otherwise expressly authorized in writing by the Board.

Notwithstanding the foregoing, the restrictions set forth in this Section 7.4 shall not apply to information that: (I) is or becomes generally available to the public other than as a result of Executive's breach of this Agreement; (II) is required to be disclosed by applicable law, regulation, or legal process (including by subpoena, civil investigative demand, or similar compulsory process), provided that Executive shall provide the Company with prompt written notice of such requirement (to the extent legally permissible) so that the Company may seek a protective order or other appropriate remedy, and Executive shall disclose only that portion of the Confidential Information that is legally required to be disclosed; or (III) is disclosed by Executive to Executive's personal legal, tax, or financial advisors who are bound by obligations of confidentiality at least as restrictive as those set forth herein.

Without limiting the generality of the foregoing, Executive acknowledges and agrees that Confidential Information includes patient health information that is protected under the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder ("HIPAA"). Executive shall comply with all applicable HIPAA policies and procedures of the Company, as well as all applicable federal and state privacy and data security laws, both during and after Executive's employment. Upon termination of Executive's employment for any reason, Executive shall promptly return to the Company all documents, files, records, materials, equipment, and other property of the Company and its Affiliates and subsidiaries in Executive's possession or control, including all copies (whether in paper, electronic, or other form) of any Confidential Information.

7.5 Non-Disparagement. During Executive's employment and at all times thereafter, Executive shall not make, publish, or communicate any disparaging, defamatory, or derogatory statements, whether written or oral, about the Company, Parent, Ardent GP, or any of their respective Affiliates, subsidiaries, directors, officers, investors, members, partners, employees, or agents. The Company shall instruct its senior officers and members of the Board not to make, publish, or communicate any disparaging, defamatory, or derogatory statements about Executive. Notwithstanding the foregoing, nothing in this Section 7.5 shall restrict either party from (a) making truthful statements in response to a subpoena, legal process, or governmental inquiry or investigation, (b) providing truthful testimony in any judicial, arbitral, or administrative proceeding, or (c) making disclosures that are required by applicable law, regulation, or the rules of any stock exchange.

7.6 Inventions and Work Product. Executive acknowledges and agrees that all inventions, discoveries, developments, improvements, ideas, concepts, designs, methods, processes, techniques, works of authorship, software, trade secrets, and other intellectual property (whether or not patentable or copyrightable) that are conceived, created, developed, reduced to practice, or otherwise made by Executive, alone or jointly with others, during the period of Executive's employment with the Company (or the Target), and that relate to the business, operations, products, services, research, or development of the Company or any of its Affiliates or subsidiaries (collectively, "Work Product"), are and shall be the sole and exclusive property of the Company. To the extent that any Work Product qualifies as a "work made for hire" under the Copyright Act of 1976, as amended, it shall be considered a work made for hire, with all rights, title, and interest therein vesting exclusively in the Company. To the extent that any Work Product does not so qualify, Executive hereby irrevocably assigns to the Company all right, title, and interest in and to such Work Product, including all intellectual property rights therein. Executive shall, at the Company's expense, execute all documents and take all actions reasonably requested by the Company to perfect, register, or enforce the Company's rights in and to any Work Product, both during and after Executive's employment.

7.7 Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

7.8 Enforcement and Remedies. Executive acknowledges and agrees that the Company's remedies at law for any breach or threatened breach of the provisions of this Section 7 would be inadequate, and that a breach or threatened breach of such provisions would cause irreparable harm to the Company and its Affiliates for which monetary damages alone would not be an adequate remedy. Accordingly, Executive agrees that, in addition to all other remedies available to the Company at law or in equity, the Company shall be entitled to seek temporary, preliminary, and permanent injunctive relief, specific performance, and other equitable relief to enforce the provisions of this Section 7, without the necessity of proving actual damages and without the requirement of posting any bond or other security. The parties agree that any court or arbitrator of competent jurisdiction may grant such injunctive or equitable relief.

If Executive breaches any of the restrictive covenants set forth in Sections 7.1, 7.2, or 7.3, the Restricted Period applicable to such covenant shall be tolled during the period of such breach and shall not resume running until such breach has been cured or otherwise ceased.

Executive acknowledges that the restrictions set forth in this Section 7, including the scope, duration, and geographic extent thereof, are reasonable and necessary to protect the legitimate business interests of the Company and its Affiliates, including their Confidential Information, goodwill, customer and employee relationships, and competitive position. If a court of competent jurisdiction determines that any provision of this Section 7 is unenforceable by reason of its extending for too great a period of time, over too great a geographic area, or over too great a range of activities, such provision shall be reformed and interpreted to extend only over the maximum period of time, geographic area, and range of activities as to which it may be enforceable, and such court is hereby authorized and directed to reform such provision accordingly.

The prevailing party in any action to enforce the provisions of this Section 7 shall be entitled to recover its reasonable attorneys' fees and costs incurred in connection with such action.

SECTION 8 — REPRESENTATIONS AND WARRANTIES

Executive represents and warrants to the Company as follows:

(a) The execution, delivery, and performance of this Agreement by Executive does not and will not violate, conflict with, or result in a breach of any agreement, obligation, or understanding to which Executive is a party or by which Executive is bound, including, without limitation, any prior employment agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or similar restrictive covenant.

(b) Executive is not subject to any non-competition covenant, non-solicitation covenant, or other restrictive covenant or agreement that would in any manner limit or impair Executive's ability to perform Executive's duties and obligations under this Agreement.

(c) Executive has not been, and is not currently, excluded, debarred, suspended, or otherwise ineligible to participate in any Federal Healthcare Program, including, without limitation, Medicare, Medicaid, and TRICARE, and Executive is not subject to any pending or threatened investigation, proceeding, or action that could reasonably be expected to result in such exclusion, debarment, or suspension.

(d) Executive has disclosed to the Company in writing all pending or threatened litigation, arbitration, administrative proceedings, or governmental investigations in which Executive is a party or a named subject, and all material facts related thereto.

(e) All information provided by Executive to the Company, Parent, Ardent GP, and their respective advisors during the hiring and transition process in connection with the transactions contemplated by the Purchase Agreement was, at the time provided, accurate and complete in all material respects and did not omit any material fact necessary to make such information not misleading.

SECTION 9 — INDEMNIFICATION

9.1 Indemnification. The Company shall indemnify, defend, and hold harmless Executive to the fullest extent permitted by the General Corporation Law of the State of Delaware (as may be amended from time to time) and the Company's certificate of incorporation and bylaws, as the same may be amended, restated, or supplemented from time to time, against all liabilities, losses, damages, costs, and expenses (including reasonable attorneys' fees and costs of investigation) actually and reasonably incurred by Executive in connection with any threatened, pending, or completed action, suit, proceeding, or investigation (whether civil, criminal, administrative, or investigative) arising out of or relating to Executive's service as an officer or director of the Company or any of its subsidiaries or Affiliates, or as a fiduciary of any employee benefit plan maintained by the Company or any of its subsidiaries. The Company's obligations under this Section 9 shall not be reduced or limited by any change in the Company's certificate of incorporation, bylaws, or applicable law that would diminish Executive's rights hereunder, and shall continue after the termination of Executive's employment for any reason.

9.2 Directors' and Officers' Insurance. The Company shall maintain directors' and officers' liability insurance ("D&O Insurance") covering Executive during the entire period of Executive's employment with the Company and for a period of six (6) years following the termination of Executive's employment for any reason, with coverage limits and terms at least as favorable as those maintained by the Company for its other directors and officers. The Company shall use commercially reasonable efforts to maintain a D&O tail policy (including through the Sentinel Indemnity Group D&O tail policy program or a substantially equivalent program), providing claims-made coverage for acts or omissions occurring during the period of Executive's service.

9.3 Advancement of Expenses. The Company shall advance to Executive, to the fullest extent permitted by the General Corporation Law of the State of Delaware, all reasonable attorneys' fees, costs, and expenses incurred by Executive in connection with any proceeding described in Section 9.1, upon receipt of an undertaking by Executive to repay such amounts if it is ultimately determined that Executive is not entitled to indemnification.

SECTION 10 — MISCELLANEOUS

10.1 Governing Law. This Agreement and all disputes or controversies arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Tennessee, without regard to the conflict of laws principles thereof that would result in the application of the laws of any other jurisdiction.

10.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be settled by binding arbitration in accordance with the Employment Arbitration Rules of the American Arbitration Association ("AAA") then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA rules and shall take place in Nashville, Tennessee. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including, without limitation, specific performance, injunctive relief, and compensatory damages. The arbitrator's award shall be final and binding on the parties, and judgment on such award may be entered in any court of competent jurisdiction. The costs of the arbitration, including the arbitrator's fees, shall be borne by the Company, except that each party shall bear its own attorneys' fees and costs unless the arbitrator determines that a different allocation is appropriate. Notwithstanding the foregoing, claims for injunctiv

EMPLOYMENT AGREEMENT
DANIEL BURCH Chief Executive Officer
ARDENT HEALTHCARE HOLDINGS INC.
Dated as of April 18, 2025
Right-click to update Table of Contents
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated as of April 18, 2025 (the "Effective Date"), is entered into by and between Ardent Healthcare Holdings Inc., a Delaware corporation (the "Company"), with operational headquarters located at 4200 West End Avenue, Suite 1100, Nashville, Tennessee 37205 (formerly the headquarters of MedVance Health Systems, Inc.) and a registered address at 1209 Orange Street, Wilmington, Delaware 19801, and Daniel Burch, an individual residing at the address on file with the Company ("Executive").
RECITALS
WHEREAS, the Company is a wholly owned subsidiary of Ardent Capital Partners III LP, a Delaware limited partnership ("Parent"), which is managed by its general partner, Ardent Capital Management III LLC, a Delaware limited liability company ("Ardent GP");
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of February 10, 2025 (the "Purchase Agreement"), among the Company, the sellers named therein, and MedVance Health Systems, Inc., a Tennessee corporation (the "Target"), the Company acquired all of the outstanding equity interests of the Target, with the closing of such acquisition occurring on April 18, 2025 (the "Closing");
WHEREAS, Executive previously served as the Chief Executive Officer of the Target and, in connection with the transactions contemplated by the Purchase Agreement, is a holder of rollover equity in the Company and/or Parent;
WHEREAS, the Company desires to employ Executive, and Executive desires to accept employment with the Company, on the terms and conditions set forth herein, effective as of the Closing; and
WHEREAS, this Agreement supersedes any and all prior employment agreements, offer letters, compensation arrangements, or other agreements or understandings between Executive and the Target or any of its affiliates relating to the employment of Executive.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1 — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
1.1 "Accrued Obligations" means, collectively, (a) any earned but unpaid Base Salary through the Termination Date, (b) any accrued but unused paid time off in accordance with the Company's policies, (c) any vested benefits under any employee benefit plan in which Executive participates, determined in accordance with the terms of the applicable plan, and (d) any unreimbursed business expenses incurred by Executive prior to the Termination Date in accordance with Section 4.5 of this Agreement.
1.2 "Affiliate" means, with respect to any person or entity, any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such person or entity, including, without limitation, Parent and Ardent GP. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract, or otherwise.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Cause" means the occurrence of any one or more of the following events:
(i) a material breach by Executive of any provision of this Agreement, provided that the Company shall have given Executive written notice of such breach and Executive shall have failed to cure such breach within thirty (30) days following receipt of such notice (to the extent such breach is reasonably susceptible to cure);
(ii) the conviction of Executive of, or the entry of a plea of guilty or nolo contendere by Executive to, a felony or any crime involving moral turpitude under the laws of the United States or any state thereof;
(iii) willful misconduct or gross negligence by Executive in the performance of Executive's duties under this Agreement that is materially injurious to the Company or any of its Affiliates;
(iv) fraud, embezzlement, or misappropriation of funds, assets, or property of the Company or any of its Affiliates by Executive;
(v) a material violation by Executive of any written policy of the Company that has been provided or made available to Executive, including, without limitation, policies relating to anti-harassment, anti-discrimination, substance abuse, ethical conduct, and compliance with applicable healthcare laws and regulations;
(vi) the willful failure or refusal by Executive to follow the lawful and reasonable directives of the Board that are consistent with the scope and nature of Executive's duties and responsibilities hereunder, provided that the Company shall have given Executive written notice of such failure and Executive shall have failed to cure such failure within thirty (30) days following receipt of such notice; or
(vii) the exclusion or debarment of Executive from participation in any Federal Healthcare Program (as defined in 42 U.S.C. § 1320a-7b(f)), including, without limitation, Medicare, Medicaid, and TRICARE.
For purposes of this definition, no act or failure to act by Executive shall be considered "willful" if performed or omitted in good faith and with a reasonable belief that such act or omission was in the best interests of the Company.
1.5 "Change of Control" means any of the following events:
(a) a sale, transfer, or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to any person or group of persons (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) other than an Affiliate of Parent;
(b) a merger, consolidation, recapitalization, or similar transaction involving the Company (or Parent) following which the holders of equity interests in the Company (or Parent) immediately prior to such transaction hold less than fifty percent (50%) of the combined voting power of the equity interests of the surviving or resulting entity;
(c) the acquisition by any person or group (other than Parent, Ardent GP, or any of their respective Affiliates) of more than fifty percent (50%) of the voting equity interests of the Company (or Parent); or
(d) the sale by Parent or its Affiliates of their equity interests in the Company to a person or group that is not an Affiliate of Parent, resulting in Parent and its Affiliates holding less than fifty percent (50%) of the voting equity interests of the Company.
Notwithstanding the foregoing, none of the following shall constitute a Change of Control: (I) an initial public offering of the equity securities of the Company, Parent, or any successor thereof; (II) any internal reorganization, restructuring, or reclassification of equity interests among the Company, Parent, Ardent GP, or their respective Affiliates; or (III) any transfer of equity interests among Affiliates of Parent.
1.6 "CIC Protection Period" means the period commencing ninety (90) days prior to and ending twenty-four (24) months following the consummation of a Change of Control.
1.7 "Confidential Information" means all non-public, proprietary, or confidential information and data of the Company or any of its Affiliates or subsidiaries, whether in written, oral, electronic, or other form, including, without limitation: (a) patient data and protected health information (as defined under HIPAA); (b) payor contracts and reimbursement strategies, including managed care contracts, fee schedules, and capitation arrangements; (c) financial data, projections, budgets, and business plans; (d) proprietary clinical protocols, clinical pathways, and care management programs; (e) marketing strategies and competitive analyses; (f) information relating to existing or prospective acquisitions, joint ventures, or business combinations; (g) trade secrets (as defined under applicable law, including the Tennessee Uniform Trade Secrets Act, Tenn. Code Ann. § 47-25-1701 et seq.); (h) personnel information, compensation data, and organizational strategies; (i) information relating to information technology systems, software, and data architectures; and (j) any other information that the Company or its Affiliates designate as confidential or that, by its nature, a reasonable person would understand to be confidential.
1.8 "Disability" means Executive's inability, due to physical or mental incapacity, to perform the essential functions of Executive's position under this Agreement, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or two hundred seventy (270) calendar days in any three hundred sixty-five (365)-day period, as determined by an independent physician selected by the Board and reasonably acceptable to Executive (or Executive's legal representative). Executive shall cooperate in good faith with any request by the Board to submit to a medical examination for the purpose of making such determination.
1.9 "Good Reason" means the occurrence, without Executive's prior written consent, of any one or more of the following events:
(i) a material diminution in Executive's Base Salary, defined as a reduction of more than ten percent (10%) from the then-current Base Salary, unless such reduction is part of an across-the-board reduction applicable to all senior executives of the Company;
(ii) a material diminution in Executive's authority, duties, or responsibilities, including, without limitation, any requirement that Executive report to any person or body other than the Board;
(iii) a relocation of Executive's principal place of employment to a location more than fifty (50) miles from Nashville, Tennessee;
(iv) a material breach by the Company of any provision of this Agreement; or
(v) the failure of a successor entity to assume this Agreement in connection with a Change of Control as required by Section 10.7 hereof.
Notwithstanding the foregoing, Executive's resignation shall not constitute a resignation for Good Reason unless (A) Executive provides the Company with written notice specifying in reasonable detail the condition giving rise to Good Reason within ninety (90) days of the initial occurrence of such condition, (B) the Company fails to cure such condition within thirty (30) days following receipt of such notice (the "Cure Period"), and (C) Executive's resignation is effective within thirty (30) days following the expiration of the Cure Period.
1.10 "Plan" means the Management Equity Incentive Plan of Ardent Capital Partners III LP, as adopted by Ardent GP, as may be amended from time to time.
1.11 "Profits Interest Award Agreement" means the separate Class B Profits Interest Award Agreement between Parent and Executive to be entered into on or promptly following the Effective Date pursuant to the Plan.
1.12 "Release" means the general release of claims substantially in the form attached hereto as Exhibit A, as may be updated by the Company to reflect changes in applicable law.
1.13 "Restricted Period" means the period commencing on the Effective Date and ending twenty-four (24) months following the Termination Date.
1.14 "Restricted Territory" means (a) the States of Tennessee, Alabama, Georgia, and Kentucky, and (b) any other state in the United States in which the Company or any of its subsidiaries operates healthcare facilities or has executed a letter of intent for the development, acquisition, or operation of a new healthcare facility as of the Termination Date.
1.15 "Rollover Subscription Agreement" means the Rollover Subscription Agreement entered into by Executive in connection with the Purchase Agreement, pursuant to which Executive contributed rollover equity in connection with the transactions contemplated by the Purchase Agreement.
1.16 "Termination Date" means the date on which Executive's employment with the Company terminates for any reason.
SECTION 2 — EMPLOYMENT; POSITION; DUTIES
2.1 Position. Effective as of the Effective Date, the Company hereby employs Executive, and Executive hereby accepts employment with the Company, as the Chief Executive Officer of the Company. In such capacity, Executive shall report directly and exclusively to the Board. Executive's principal place of employment shall be at the Company's operational headquarters in Nashville, Tennessee, subject to reasonable travel as may be required in connection with the performance of Executive's duties hereunder.
2.2 Duties. Executive shall be a full-time employee of the Company and shall devote substantially all of Executive's business time, attention, skill, and energy to the affairs of the Company and its subsidiaries. Executive shall have general management responsibility for all operations, strategic planning, business development, and day-to-day affairs of the Company and its subsidiaries, in each case subject to the oversight, direction, and policies of the Board. Executive shall faithfully and diligently perform such duties and responsibilities as are customarily associated with the position of Chief Executive Officer of an enterprise of the size and nature of the Company, together with such additional duties and responsibilities as may be reasonably assigned to Executive from time to time by the Board, consistent with Executive's position. If appointed by the Board, Executive shall serve as a member of the Board without additional compensation (other than as provided in this Agreement) and shall serve as an officer, director, or manager of any subsidiary or Affiliate of the Company as may be reasonably requested by the Board from time to time, in each case without additional compensation.
2.3 Exclusivity. During the term of Executive's employment hereunder, Executive shall not, without the prior written consent of the Board, engage in any other business activity, whether or not such activity is pursued for profit; provided, however, that nothing in this Section 2.3 shall preclude Executive from:
(a) making passive investments in the equity securities of any publicly traded company, so long as such investment does not exceed two percent (2%) of the outstanding securities of any class of such company and does not require Executive to devote any material time or attention to the management or operations of such company;
(b) serving on the boards of directors or advisory boards of charitable, educational, civic, or industry-association organizations, subject to prior written approval of the Board (such approval not to be unreasonably withheld), and provided that such service does not materially interfere with the performance of Executive's duties hereunder; or
(c) managing Executive's personal and family investments and affairs, provided that such activities do not materially interfere with the performance of Executive's duties hereunder.
As of the Effective Date, the Board has approved the following outside board positions held by Executive: none. Executive shall promptly notify the Board of any proposed new outside board position prior to accepting such position.
SECTION 3 — TERM
3.1 Initial Term. The term of Executive's employment under this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years, expiring on April 17, 2028 (the "Initial Term"), unless earlier terminated in accordance with the provisions of Section 5 hereof.
3.2 Renewal. Upon expiration of the Initial Term, this Agreement shall automatically renew for successive one (1)-year periods (each, a "Renewal Term," and together with the Initial Term, the "Term"), unless either party provides written notice of non-renewal to the other party at least ninety (90) days prior to the expiration of the then-current Term. For the avoidance of doubt, if the Company provides notice of non-renewal (other than in circumstances constituting Cause), such non-renewal shall be treated as a termination of Executive's employment by the Company without Cause for purposes of Section 6 hereof, effective as of the last day of the then-current Term.
SECTION 4 — COMPENSATION
4.1 Base Salary. During the Term, the Company shall pay Executive an annualized base salary of Six Hundred Twenty-Five Thousand Dollars ($625,000) (the "Base Salary"), payable in accordance with the Company's regular payroll practices as in effect from time to time (currently semi-monthly). The Base Salary shall be subject to annual review by the Board (or a compensation committee thereof, if established), and the Board may, in its sole discretion, increase the Base Salary from time to time; provided, however, that the Base Salary shall not be decreased below Six Hundred Twenty-Five Thousand Dollars ($625,000) per annum at any time during the Term without Executive's prior written consent (except as may constitute Good Reason under Section 1.9).
4.2 Annual Bonus. For each fiscal year of the Company during the Term, Executive shall be eligible to earn an annual performance bonus (the "Annual Bonus") with a target amount equal to one hundred percent (100%) of Executive's then-current Base Salary (the "Target Bonus"), which Target Bonus at the initial Base Salary equals Six Hundred Twenty-Five Thousand Dollars ($625,000). The actual Annual Bonus payable with respect to any fiscal year may range from zero percent (0%) to two hundred percent (200%) of the Target Bonus, based upon the achievement of annual performance objectives established by the Board (or a compensation committee thereof) for such fiscal year. Such performance objectives shall include financial metrics (including, without limitation, revenue, Adjusted EBITDA, and such other financial metrics as the Board may determine) and individual and strategic objectives, in each case as communicated to Executive within sixty (60) days following the commencement of the applicable performance period (or, with respect to the first bonus period, within thirty (30) days following the Effective Date).
(a) Pro-Ration. The Annual Bonus shall be pro-rated for any partial fiscal year during the Term. The first bonus period shall be the period commencing on April 18, 2025 and ending on December 31, 2025.
(b) Payment Timing. The Annual Bonus for any fiscal year shall be paid no later than March 15 of the fiscal year following the performance year to which such Annual Bonus relates, subject to the terms of this Agreement.
(c) Employment Requirement. Except as expressly provided in Section 5.5 and Section 6, Executive must remain continuously employed by the Company through the date on which the Annual Bonus is paid in order to earn and receive such Annual Bonus. No Annual Bonus or any portion thereof shall be considered earned or accrued until the date on which it is actually paid.
4.3 Equity Incentive Grant.
(a) Plan. Executive shall be eligible to participate in the Management Equity Incentive Plan of Ardent Capital Partners III LP (the "Plan"), to be adopted by Ardent GP on or prior to the Effective Date.
(b) Grant. Subject to the terms and conditions of the Plan and a separate Profits Interest Award Agreement to be entered into by Parent and Executive on or promptly following the Effective Date, Executive shall be granted Class B Profits Interests in Parent equal to three and one-half percent (3.50%) of the fully diluted equity of the Company (the "Profits Interests"). The Profits Interests shall be structured as "profits interests" for U.S. federal income tax purposes within the meaning of Revenue Procedures 93-27 and 2001-43, and Executive and Parent shall cooperate in good faith to effectuate such treatment.
(c) Vesting. The Profits Interests shall vest as follows: (I) twenty-five percent (25%) of the total Profits Interests shall vest on the first anniversary of the Effective Date; and (II) the remaining seventy-five percent (75%) of the total Profits Interests shall vest ratably on a quarterly basis over the three (3)-year period commencing on the first anniversary of the Effective Date (i.e., in twelve (12) equal quarterly installments), such that one hundred percent (100%) of the total Profits Interests shall be fully vested on the fourth anniversary of the Effective Date, in each case subject to Executive's continued employment with the Company through the applicable vesting date. Notwithstanding the foregoing, one hundred percent (100%) of the unvested Profits Interests shall become fully vested upon the consummation of a Change of Control, provided that Executive remains employed by the Company through the date of such Change of Control, or if Executive's employment is terminated by the Company without Cause or Executive resigns for Good Reason during the CIC Protection Period.
(d) Distribution Waterfall. Distributions with respect to the Profits Interests shall be made in accordance with the distribution waterfall set forth in the Amended and Restated Agreement of Limited Partnership of Parent (as may be further amended from time to time). Executive shall participate in distributions above an eight percent (8%) internal rate of return ("IRR") hurdle, as further specified in the limited partnership agreement of Parent and the Profits Interest Award Agreement.
(e) Rollover Equity. The Company and Executive acknowledge that Executive holds rollover equity in connection with the transactions contemplated by the Purchase Agreement with an approximate value of Seven Million Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($7,437,500), representing Executive's pro-rata share of management rollover equity. Such rollover equity is governed by the separate Rollover Subscription Agreement and the limited partnership agreement of Parent, and nothing in this Agreement shall modify or supersede the terms applicable to such rollover equity.
4.4 Employee Benefits. During the Term, Executive shall be eligible to participate in all employee benefit plans, programs, and arrangements maintained by the Company and made available to the Company's senior executives, as such plans, programs, and arrangements may be in effect from time to time, including, without limitation, health insurance (medical, dental, and vision), life insurance, short-term and long-term disability insurance, and the Company's 401(k) retirement savings plan (with company matching contributions as generally available to employees of the Company). The benefits provided to Executive shall be at least as favorable, in the aggregate, as those provided to Executive by the Target immediately prior to the Effective Date. Nothing in this Agreement shall be construed to require the Company to establish or maintain any particular benefit plan, program, or arrangement, or to prevent the Company from modifying, amending, or terminating any such plan, program, or arrangement in accordance with its terms and applicable law; provided, however, that the Company shall not take any such action that would materially and disproportionately reduce Executive's benefits relative to other similarly situated senior executives of the Company.
4.5 Expense Reimbursement. During the Term, the Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the performance of Executive's duties hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit documentation of such expenses within sixty (60) days of incurrence, and the Company shall reimburse Executive within thirty (30) days following the Company's receipt of proper documentation. In no event shall the amount of expenses eligible for reimbursement in one calendar year affect the amount of expenses eligible for reimbursement in any other calendar year.
4.6 Paid Time Off. During the Term, Executive shall be entitled to five (5) weeks (twenty-five (25) business days) of paid time off ("PTO") per calendar year, pro-rated for any partial calendar year. Accrual and carryover of unused PTO shall be governed by the Company's PTO policy as in effect from time to time and as applicable to senior executives of the Company. Executive shall schedule PTO at such times as are reasonably consistent with the business needs of the Company.
SECTION 5 — TERMINATION OF EMPLOYMENT
5.1 Termination by the Company for Cause. The Board may terminate Executive's employment hereunder for Cause at any time upon delivery of written notice to Executive specifying in reasonable detail the grounds for such termination. Where the applicable Cause event is subject to a cure period as provided in Section 1.4, Executive's employment shall not be terminated until the expiration of such thirty (30)-day cure period, provided that Executive fails to cure the applicable breach or failure within such period. Upon a termination for Cause, Executive shall be entitled to receive the Accrued Obligations only, payable in accordance with the Company's regular payroll practices and the terms of the applicable benefit plans. Executive shall not be entitled to any Annual Bonus, severance, or any other compensation or benefits following a termination for Cause, except as required by applicable law. The treatment of Executive's Profits Interests and any other equity awards upon a termination for Cause shall be governed by the Plan and the Profits Interest Award Agreement, which shall provide, among other things, that all unvested Profits Interests shall be immediately forfeited and that the Company (or Parent) shall have the right to repurchase vested Profits Interests at the lower of cost and fair market value.
5.2 Termination by the Company Without Cause. The Board may terminate Executive's employment hereunder without Cause at any time upon thirty (30) days' prior written notice to Executive (or, in the Company's sole discretion, payment of Executive's Base Salary in lieu of such notice for the notice period). A termination without Cause shall entitle Executive to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein. For the avoidance of doubt, a termination of Executive's employment by the Company for any reason other than Cause, death, or Disability shall constitute a termination without Cause for purposes of this Agreement.
5.3 Resignation for Good Reason. Executive may resign Executive's employment for Good Reason in accordance with the notice-and-cure procedure set forth in the definition of "Good Reason" in Section 1.9. A resignation for Good Reason shall be treated as a termination by the Company without Cause for all purposes under this Agreement and shall entitle Executive to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein.
5.4 Resignation Without Good Reason. Executive may resign Executive's employment without Good Reason at any time upon sixty (60) days' prior written notice to the Company. The Company may, in its sole discretion, elect to waive all or any portion of the notice period and accelerate Executive's Termination Date, in which case the Company shall pay Executive's Base Salary through the end of the originally noticed period. Upon a resignation without Good Reason, Executive shall be entitled to receive the Accrued Obligations only. Executive shall not be entitled to any Annual Bonus (other than any Annual Bonus for a prior fiscal year that has been earned but not yet paid as of the Termination Date, to the extent required under the terms of the applicable bonus program), severance, or any other compensation or benefits following a resignation without Good Reason, except as required by applicable law.
5.5 Death or Disability. Executive's employment shall terminate automatically upon Executive's death. The Company may terminate Executive's employment upon a determination of Disability in accordance with Section 1.8. Upon a termination by reason of death or Disability, Executive (or Executive's estate or legal representative, as applicable) shall be entitled to receive:
(a) the Accrued Obligations;
(b) a pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on actual performance for the full fiscal year and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (and in no event later than March 15 of the year following such performance year);
(c) twelve (12) months of Company-paid COBRA continuation coverage for Executive (or Executive's eligible dependents, as applicable), commencing as of the date Executive's (or Executive's eligible dependents') coverage under the Company's group health plans would otherwise terminate, with the Company paying the employer portion of the applicable premiums during such period; and
(d) with respect to Executive's Profits Interests, accelerated vesting of the tranche of unvested Profits Interests that would next vest following the Termination Date (the "Next Vesting Tranche"); all other unvested Profits Interests shall be forfeited.
5.6 Expiration of Term; Non-Renewal. If the Company provides Executive with notice of non-renewal of this Agreement in accordance with Section 3.2, and Executive's employment terminates as of the end of the then-current Term, such termination shall be treated as a termination by the Company without Cause for all purposes under this Agreement, effective as of the last day of the then-current Term, and Executive shall be entitled to the Severance Benefits set forth in Section 6, subject to the conditions set forth therein. If Executive provides notice of non-renewal and Executive's employment terminates as of the end of the then-current Term, such termination shall be treated as a resignation without Good Reason and Executive shall be entitled to the Accrued Obligations only.
SECTION 6 — SEVERANCE PAYMENTS AND BENEFITS
6.1 Severance Upon Termination Without Cause or for Good Reason (Outside CIC Protection Period). Subject to Executive's execution and non-revocation of the Release in accordance with Section 6.4, and Executive's continued compliance with the covenants set forth in Section 7, in the event that Executive's employment is terminated by the Company without Cause (including by reason of non-renewal by the Company under Section 3.2) or Executive resigns for Good Reason, in either case at a time that is not during the CIC Protection Period, Executive shall be entitled to receive the following payments and benefits (collectively, the "Severance Benefits"), in addition to the Accrued Obligations:
(a) Cash Severance. A lump sum cash payment equal to one and one-half times (1.5×) Executive's Base Salary as in effect on the Termination Date (or, if the termination is in connection with a reduction in Base Salary that constitutes Good Reason, the Base Salary in effect immediately prior to such reduction), which amount at Executive's initial Base Salary equals Nine Hundred Thirty-Seven Thousand Five Hundred Dollars ($937,500). Such payment shall be made within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.
(b) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on actual performance for the full fiscal year and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (and in no event later than March 15 of the year following such performance year).
(c) Prior Year Bonus. If Executive's termination occurs after the end of a fiscal year but before the Annual Bonus for such fiscal year has been paid, and such Annual Bonus has been earned based on the Company's actual performance for such fiscal year, Executive shall receive such earned Annual Bonus, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year.
(d) COBRA Continuation. The Company shall pay, on Executive's behalf, the employer portion of the premiums for continued coverage under the Company's group health plans (medical, dental, and vision) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), for a period of eighteen (18) months following the Termination Date (or, if earlier, until Executive becomes eligible for coverage under another employer's group health plan), provided that Executive timely elects COBRA continuation coverage. If continuation of coverage under the Company's group health plans is not administratively feasible, the Company shall pay Executive a monthly cash amount equal to the employer portion of the applicable COBRA premiums for such eighteen (18)-month period, subject to applicable tax withholdings.
(e) Equity Treatment. The tranche of Executive's unvested Profits Interests that would next vest following the Termination Date (the "Next Vesting Tranche") shall become fully vested as of the Termination Date. All remaining unvested Profits Interests that do not constitute the Next Vesting Tranche shall be immediately forfeited as of the Termination Date. The treatment of Executive's vested Profits Interests (including the Next Vesting Tranche) shall thereafter be governed by the Plan, the Profits Interest Award Agreement, and the limited partnership agreement of Parent.
(f) Outplacement Services. The Company shall provide Executive with executive-level outplacement services from a provider selected by the Company, for a period of up to twelve (12) months following the Termination Date, at a cost to the Company not to exceed Thirty Thousand Dollars ($30,000).
6.2 Enhanced Severance Upon Termination Without Cause or for Good Reason During CIC Protection Period. Subject to Executive's execution and non-revocation of the Release in accordance with Section 6.4, and Executive's continued compliance with the covenants set forth in Section 7, in the event that Executive's employment is terminated by the Company without Cause or Executive resigns for Good Reason during the CIC Protection Period, Executive shall be entitled to receive the following payments and benefits (in lieu of and not in addition to the payments and benefits described in Section 6.1), in addition to the Accrued Obligations:
(a) Cash Severance. A lump sum cash payment equal to two times (2.0×) the sum of (I) Executive's Base Salary as in effect on the Termination Date (or, if higher, the Base Salary in effect immediately prior to the Change of Control or any reduction constituting Good Reason) plus (II) Executive's Target Bonus, which amount at Executive's initial rates equals Two Million Five Hundred Thousand Dollars ($2,500,000). Such payment shall be made within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.
(b) Pro-Rata Target Bonus. A pro-rata Annual Bonus for the fiscal year in which the Termination Date occurs, calculated based on the Target Bonus (rather than actual performance) and multiplied by a fraction, the numerator of which is the number of days elapsed in such fiscal year through the Termination Date and the denominator of which is the total number of days in such fiscal year, payable within sixty (60) days following the Termination Date, subject to the provisions of Section 6.4 and Section 6.5.
(c) Prior Year Bonus. If Executive's termination occurs after the end of a fiscal year but before the Annual Bonus for such fiscal year has been paid, and such Annual Bonus has been earned based on the Company's actual performance for such fiscal year, Executive shall receive such earned Annual Bonus, payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year.
(d) COBRA Continuation. The Company shall pay, on Executive's behalf, the employer portion of the premiums for continued COBRA coverage (medical, dental, and vision) for a period of twenty-four (24) months following the Termination Date (or, if earlier, until Executive becomes eligible for coverage under another employer's group health plan), provided that Executive timely elects COBRA continuation coverage. If continuation of coverage is not administratively feasible, the Company shall pay Executive a monthly cash equivalent, subject to applicable tax withholdings.
(e) Equity Acceleration. One hundred percent (100%) of Executive's unvested Profits Interests shall become fully vested as of the Termination Date. The treatment of Executive's vested Profits Interests shall thereafter be governed by the Plan, the Profits Interest Award Agreement, and the limited partnership agreement of Parent.
(f) Outplacement Services. The Company shall provide Executive with executive-level outplacement services from a provider selected by the Company, for a period of up to eighteen (18) months following the Termination Date, at a cost to the Company not to exceed Fifty Thousand Dollars ($50,000).
6.3 Section 280G Cutback. In the event that any payment or benefit received or to be received by Executive under this Agreement or any other plan, arrangement, or agreement with the Company or any of its Affiliates (collectively, the "Total Payments") would constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), the Total Payments shall be reduced (but not below zero) to the extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Section 4999 of the Code, but only if and to the extent that such reduction would result in Executive receiving a greater aggregate after-tax benefit than Executive would receive without such reduction (taking into account the excise tax imposed under Section 4999 of the Code, any applicable federal, state, and local income and employment taxes, and any interest and penalties). This is a "best-net" approach, and the Company shall not provide a gross-up payment to Executive for any excise tax imposed under Section 4999 of the Code. Any reduction required by this Section 6.3 shall be applied in the following order: (I) first, any cash severance payments under Section 6.1(a) or Section 6.2(a), as applicable; (II) second, any pro-rata bonus payments under Section 6.1(b) or Section 6.2(b); (III) third, any COBRA payments under Section 6.1(d) or Section 6.2(d); and (IV) fourth, any acceleration of equity vesting under Section 6.1(e) or Section 6.2(e). The determination of whether any reduction is required and the amount of such reduction shall be made in good faith by a nationally recognized public accounting firm selected by the Company (the "Accounting Firm"), whose determination shall be conclusive and binding upon Executive and the Company. The costs and expenses of the Accounting Firm shall be borne by the Company.
6.4 Release. As a condition precedent to the receipt of any Severance Benefits under Section 6.1 or Section 6.2, Executive must execute and deliver to the Company a general release of claims in substantially the form attached hereto as Exhibit A (or such updated form as the Company may reasonably require to reflect changes in applicable law) within twenty-one (21) days following the Termination Date (or forty-five (45) days if Executive's termination is part of a group termination or exit incentive program subject to the requirements of the Older Workers Benefit Protection Act), and such release must become irrevocable upon the expiration of the applicable revocation period (seven (7) days following Executive's execution of the Release). No Severance Benefits shall be paid or provided until the Release has become irrevocable. If the combined consideration and revocation periods span two calendar years, any lump sum payment that would otherwise be paid in the first calendar year shall instead be paid on the first regularly scheduled payroll date in the second calendar year (or such earlier date as is permissible under Section 409A of the Code).
6.5 Section 409A Compliance. The payments and benefits provided under this Agreement are intended to be exempt from, or to comply with, the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder ("Section 409A"), and this Agreement shall be interpreted and administered consistent with such intent. Each payment made under this Agreement shall be treated as a separate payment for purposes of Section 409A. In no event shall Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement.
(a) Specified Employee Delay. Notwithstanding any other provision of this Agreement, if Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code on the Termination Date, any payment or benefit under this Agreement that constitutes nonqualified deferred compensation subject to Section 409A and that is payable on account of Executive's "separation from service" (within the meaning of Section 409A) shall not be paid until the first business day following the expiration of the six (6)-month period following the Termination Date (or, if earlier, the date of Executive's death) (the "Delayed Payment Date"). On the Delayed Payment Date, Executive shall receive a lump sum payment equal to the aggregate amount of all payments that were delayed pursuant to this Section 6.5(a), without interest.
(b) Reimbursements and In-Kind Benefits. Any reimbursement of expenses or in-kind benefits provided under this Agreement that constitutes nonqualified deferred compensation subject to Section 409A shall be subject to the following conditions: (I) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (II) the reimbursement of an eligible expense shall be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (III) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, all in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv).
SECTION 7 — RESTRICTIVE COVENANTS
7.1 Non-Competition. During Executive's employment with the Company and for the Restricted Period, Executive shall not, directly or indirectly, whether as an owner, partner, member, shareholder, investor, officer, director, employee, consultant, advisor, agent, independent contractor, or in any other capacity, own, manage, operate, control, be employed by, provide services to, consult for, or participate in the ownership, management, operation, or control of any business, enterprise, or entity that provides post-acute care, rehabilitation services (inpatient or outpatient), long-term care, skilled nursing, home health, hospice, or other healthcare services that are competitive with the businesses conducted by the Company or any of its subsidiaries as of the Termination Date, within the Restricted Territory. Notwithstanding the foregoing, passive ownership by Executive of not more than two percent (2%) of the outstanding securities of any class of any publicly traded company shall not constitute a violation of this Section 7.1, provided that Executive does not otherwise participate in or provide services to such company.
7.2 Non-Solicitation of Employees. During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any employee, independent contractor, or consultant of the Company or any of its subsidiaries (who was employed or engaged by the Company or any of its subsidiaries at any time during the twelve (12)-month period immediately preceding the Termination Date) to terminate, reduce, or modify such person's employment or engagement with the Company or any of its subsidiaries, or to accept employment or engagement with any other person or entity. Without limiting the generality of the foregoing, Executive shall not, during the Restricted Period, directly or indirectly, hire or engage, or cause to be hired or engaged, any such person.
7.3 Non-Solicitation of Business Relationships. During the Restricted Period, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, the business of any patient, customer, referral source, payor, supplier, or vendor of the Company or any of its subsidiaries with whom Executive had material contact or about whom Executive obtained Confidential Information during the last twenty-four (24) months of Executive's employment, for the purpose of providing services competitive with those provided by the Company or any of its subsidiaries. Without limiting the foregoing, the restrictions in this Section 7.3 shall expressly apply to Executive's relationships with BlueLine Health Plan of Tennessee and SouthPoint Insurance Co. and their respective affiliates, and all referral sources, physicians, and clinical partners with whom Executive had material contact during Executive's employment.
7.4 Confidentiality. Executive acknowledges that, during the course of Executive's employment with the Company (and previously with the Target), Executive has received and will receive Confidential Information of the Company and its Affiliates and subsidiaries. Executive agrees that, both during Executive's employment and at all times thereafter (the obligations under this Section 7.4 being perpetual in duration), Executive shall not, directly or indirectly, disclose, publish, communicate, or use for Executive's own benefit or the benefit of any other person or entity, any Confidential Information, except (a) in the performance of Executive's duties hereunder and in furtherance of the business interests of the Company, or (b) as otherwise expressly authorized in writing by the Board.
Notwithstanding the foregoing, the restrictions set forth in this Section 7.4 shall not apply to information that: (I) is or becomes generally available to the public other than as a result of Executive's breach of this Agreement; (II) is required to be disclosed by applicable law, regulation, or legal process (including by subpoena, civil investigative demand, or similar compulsory process), provided that Executive shall provide the Company with prompt written notice of such requirement (to the extent legally permissible) so that the Company may seek a protective order or other appropriate remedy, and Executive shall disclose only that portion of the Confidential Information that is legally required to be disclosed; or (III) is disclosed by Executive to Executive's personal legal, tax, or financial advisors who are bound by obligations of confidentiality at least as restrictive as those set forth herein.
Without limiting the generality of the foregoing, Executive acknowledges and agrees that Confidential Information includes patient health information that is protected under the Health Insurance Portability and Accountability Act of 1996, as amended, and the regulations promulgated thereunder ("HIPAA"). Executive shall comply with all applicable HIPAA policies and procedures of the Company, as well as all applicable federal and state privacy and data security laws, both during and after Executive's employment. Upon termination of Executive's employment for any reason, Executive shall promptly return to the Company all documents, files, records, materials, equipment, and other property of the Company and its Affiliates and subsidiaries in Executive's possession or control, including all copies (whether in paper, electronic, or other form) of any Confidential Information.
7.5 Non-Disparagement. During Executive's employment and at all times thereafter, Executive shall not make, publish, or communicate any disparaging, defamatory, or derogatory statements, whether written or oral, about the Company, Parent, Ardent GP, or any of their respective Affiliates, subsidiaries, directors, officers, investors, members, partners, employees, or agents. The Company shall instruct its senior officers and members of the Board not to make, publish, or communicate any disparaging, defamatory, or derogatory statements about Executive. Notwithstanding the foregoing, nothing in this Section 7.5 shall restrict either party from (a) making truthful statements in response to a subpoena, legal process, or governmental inquiry or investigation, (b) providing truthful testimony in any judicial, arbitral, or administrative proceeding, or (c) making disclosures that are required by applicable law, regulation, or the rules of any stock exchange.
7.6 Inventions and Work Product. Executive acknowledges and agrees that all inventions, discoveries, developments, improvements, ideas, concepts, designs, methods, processes, techniques, works of authorship, software, trade secrets, and other intellectual property (whether or not patentable or copyrightable) that are conceived, created, developed, reduced to practice, or otherwise made by Executive, alone or jointly with others, during the period of Executive's employment with the Company (or the Target), and that relate to the business, operations, products, services, research, or development of the Company or any of its Affiliates or subsidiaries (collectively, "Work Product"), are and shall be the sole and exclusive property of the Company. To the extent that any Work Product qualifies as a "work made for hire" under the Copyright Act of 1976, as amended, it shall be considered a work made for hire, with all rights, title, and interest therein vesting exclusively in the Company. To the extent that any Work Product does not so qualify, Executive hereby irrevocably assigns to the Company all right, title, and interest in and to such Work Product, including all intellectual property rights therein. Executive shall, at the Company's expense, execute all documents and take all actions reasonably requested by the Company to perfect, register, or enforce the Company's rights in and to any Work Product, both during and after Executive's employment.
7.7 Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b), Executive is hereby notified that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.
7.8 Enforcement and Remedies. Executive acknowledges and agrees that the Company's remedies at law for any breach or threatened breach of the provisions of this Section 7 would be inadequate, and that a breach or threatened breach of such provisions would cause irreparable harm to the Company and its Affiliates for which monetary damages alone would not be an adequate remedy. Accordingly, Executive agrees that, in addition to all other remedies available to the Company at law or in equity, the Company shall be entitled to seek temporary, preliminary, and permanent injunctive relief, specific performance, and other equitable relief to enforce the provisions of this Section 7, without the necessity of proving actual damages and without the requirement of posting any bond or other security. The parties agree that any court or arbitrator of competent jurisdiction may grant such injunctive or equitable relief.
If Executive breaches any of the restrictive covenants set forth in Sections 7.1, 7.2, or 7.3, the Restricted Period applicable to such covenant shall be tolled during the period of such breach and shall not resume running until such breach has been cured or otherwise ceased.
Executive acknowledges that the restrictions set forth in this Section 7, including the scope, duration, and geographic extent thereof, are reasonable and necessary to protect the legitimate business interests of the Company and its Affiliates, including their Confidential Information, goodwill, customer and employee relationships, and competitive position. If a court of competent jurisdiction determines that any provision of this Section 7 is unenforceable by reason of its extending for too great a period of time, over too great a geographic area, or over too great a range of activities, such provision shall be reformed and interpreted to extend only over the maximum period of time, geographic area, and range of activities as to which it may be enforceable, and such court is hereby authorized and directed to reform such provision accordingly.
The prevailing party in any action to enforce the provisions of this Section 7 shall be entitled to recover its reasonable attorneys' fees and costs incurred in connection with such action.
SECTION 8 — REPRESENTATIONS AND WARRANTIES
Executive represents and warrants to the Company as follows:
(a) The execution, delivery, and performance of this Agreement by Executive does not and will not violate, conflict with, or result in a breach of any agreement, obligation, or understanding to which Executive is a party or by which Executive is bound, including, without limitation, any prior employment agreement, non-competition agreement, non-solicitation agreement, confidentiality agreement, or similar restrictive covenant.
(b) Executive is not subject to any non-competition covenant, non-solicitation covenant, or other restrictive covenant or agreement that would in any manner limit or impair Executive's ability to perform Executive's duties and obligations under this Agreement.
(c) Executive has not been, and is not currently, excluded, debarred, suspended, or otherwise ineligible to participate in any Federal Healthcare Program, including, without limitation, Medicare, Medicaid, and TRICARE, and Executive is not subject to any pending or threatened investigation, proceeding, or action that could reasonably be expected to result in such exclusion, debarment, or suspension.
(d) Executive has disclosed to the Company in writing all pending or threatened litigation, arbitration, administrative proceedings, or governmental investigations in which Executive is a party or a named subject, and all material facts related thereto.
(e) All information provided by Executive to the Company, Parent, Ardent GP, and their respective advisors during the hiring and transition process in connection with the transactions contemplated by the Purchase Agreement was, at the time provided, accurate and complete in all material respects and did not omit any material fact necessary to make such information not misleading.
SECTION 9 — INDEMNIFICATION
9.1 Indemnification. The Company shall indemnify, defend, and hold harmless Executive to the fullest extent permitted by the General Corporation Law of the State of Delaware (as may be amended from time to time) and the Company's certificate of incorporation and bylaws, as the same may be amended, restated, or supplemented from time to time, against all liabilities, losses, damages, costs, and expenses (including reasonable attorneys' fees and costs of investigation) actually and reasonably incurred by Executive in connection with any threatened, pending, or completed action, suit, proceeding, or investigation (whether civil, criminal, administrative, or investigative) arising out of or relating to Executive's service as an officer or director of the Company or any of its subsidiaries or Affiliates, or as a fiduciary of any employee benefit plan maintained by the Company or any of its subsidiaries. The Company's obligations under this Section 9 shall not be reduced or limited by any change in the Company's certificate of incorporation, bylaws, or applicable law that would diminish Executive's rights hereunder, and shall continue after the termination of Executive's employment for any reason.
9.2 Directors' and Officers' Insurance. The Company shall maintain directors' and officers' liability insurance ("D&O Insurance") covering Executive during the entire period of Executive's employment with the Company and for a period of six (6) years following the termination of Executive's employment for any reason, with coverage limits and terms at least as favorable as those maintained by the Company for its other directors and officers. The Company shall use commercially reasonable efforts to maintain a D&O tail policy (including through the Sentinel Indemnity Group D&O tail policy program or a substantially equivalent program), providing claims-made coverage for acts or omissions occurring during the period of Executive's service.
9.3 Advancement of Expenses. The Company shall advance to Executive, to the fullest extent permitted by the General Corporation Law of the State of Delaware, all reasonable attorneys' fees, costs, and expenses incurred by Executive in connection with any proceeding described in Section 9.1, upon receipt of an undertaking by Executive to repay such amounts if it is ultimately determined that Executive is not entitled to indemnification.
SECTION 10 — MISCELLANEOUS
10.1 Governing Law. This Agreement and all disputes or controversies arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Tennessee, without regard to the conflict of laws principles thereof that would result in the application of the laws of any other jurisdiction.
10.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be settled by binding arbitration in accordance with the Employment Arbitration Rules of the American Arbitration Association ("AAA") then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with the AAA rules and shall take place in Nashville, Tennessee. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including, without limitation, specific performance, injunctive relief, and compensatory damages. The arbitrator's award shall be final and binding on the parties, and judgment on such award may be entered in any court of competent jurisdiction. The costs of the arbitration, including the arbitrator's fees, shall be borne by the Company, except that each party shall bear its own attorneys' fees and costs unless the arbitrator determines that a different allocation is appropriate. Notwithstanding the foregoing, claims for injunctiv

EMPLOYMENT AGREEMENT

ARDENT HEALTHCARE HOLDINGS INC.

EMPLOYMENT AGREEMENT

RECITALS

Record

Parties

Dates

Amounts