PARTIAL RELEASE OF NON-COMPETE PROVISIONS OF EMPLOYMENT AGREEMENT
BETWEEN XXXXXX X. XXXXX, M.D.
AND
COASTAL PHYSICIAN GROUP, INC.
This Partial Release of Non-Compete Provisions of Employment Agreement is
made and entered into this the ____ day of March, 1998, by and between Xxxxxx X.
Xxxxx, M.D. ("Xxxxx") and Coastal Physician Group, Inc. ("Coastal").
Xxxxx and Coastal are parties to an Employment Agreement dated April 1,
1991, ("Agreement") pursuant to which Xxxxx is employed by Coastal as its
President and Chief Executive Officer; and
The Agreement contains certain provisions restricting Xxxxx'x activities
that are in competition with Coastal or its subsidiaries; and
An affiliate of Xxxxx, Coastal and certain of its subsidiaries, have
entered into an agreement dated the date hereof (the "Purchase Agreement")
pursuant to which such affiliate of Xxxxx, known as DHP Holdings, LLC, will
purchase the stock of Doctors Health Plan, Inc. ("DHP"); and
The parties are desirous of amending the Agreement in order that the
ownership, operation and potential expansion of DHP into certain areas by Xxxxx
or any of his affiliates shall not be deemed to be a violation of the
non-competition or any other provisions of the Agreement.
NOW, THEREFORE, in consideration of the purchase of the stock of DHP
referred to above, the parties agree as follows:
1. Partial Release of Non-Compete Provisions. Notwithstanding the
non-compete or any other provisions of the Agreement, and notwithstanding any
provisions of any other agreement between Xxxxx or any of his affiliates other
than Coastal or its subsidiaries (collectively, the "Xxxxx Entities") and
Coastal or any of its subsidiaries (collectively, the "Coastal Entities"),
a. except as provided in c. below, the Xxxxx Entities may hereafter
enter into the business of owning, managing, operating or otherwise providing
services to health maintenance organizations, preferred provider organizations
or similar organizations (collectively "HMOs");
b. except as provided in c. below, the Xxxxx Entities shall be
permitted to increase and expand their ownership, management, and operation of
HMOs, including without limitation creating start up locations or acquiring
additional HMOs in any geographic location; and
c. notwithstanding the foregoing, so long as Coastal and/or its
affiliates operate HMOs in the States of Florida and Georgia, the Xxxxx Entities
shall not manage, operate, own or provide any services to any HMO in any
counties in which such HMOs operated by Coastal and/or its affiliates provide
services or any county contiguous to such counties.
For so long as the Coastal Entities' non-compete agreement pursuant to
Section 5.9 of the Purchase Agreement remains in effect, the Xxxxx Entities
shall not be required to first offer the Coastal Entities any opportunities
which the Xxxxx Entities may have to increase or expand their ownership,
management or operation of, or other business relationships with HMOs (other
than opportunities in the counties in Florida and Georgia in which Coastal
and/or its affiliates operate HMOs and contiguous counties, which the Xxxxx
Entities are prohibited from pursuing). Upon expiration of the Coastal Entities'
non-compete agreement in accordance with Section 5.9 of the Purchase Agreement,
if any opportunities to own, operate, manage or otherwise provide services to
HMOs are made available to Xxxxx or any of the other Xxxxx Entities by reason of
Xxxxx'x position as an officer, employee, director or shareholder of Coastal,
then Xxxxx shall first make reasonable efforts to determine whether Coastal
desires to avail itself of such opportunity. If Coastal informs Xxxxx that it
intends to avail itself of such opportunity, then Xxxxx and the other Xxxxx
Entities shall not pursue such opportunity or enter into any transaction with
respect to such opportunity unless and until Coastal shall advise Xxxxx that no
Coastal Entity has any further interest in pursuing such opportunity.
2. Ratification of Remainder of Agreement. Except as specifically modified
herein, the remaining terms of the Agreement are hereby specifically ratified
and confirmed in all respects.
IN WITNESS WHEREOF, the parties have executed this agreement as of the day
and year first above written.
COASTAL PHYSICIAN GROUP, INC.
By:
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Title:
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Xxxxxx X. Xxxxx, M.D.
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