EXHIBIT 10.9
THIRD AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is made
and entered into effective as of January 1, 2001 by and between PHYAMERICA
PHYSICIAN GROUP, INC., f/k/a COASTAL PHYSICIAN GROUP, INC., a Florida
corporation ("Employer" or the "Company") and XXXXXX X. XXXXXXXX, XX.
("Employee").
W I T N E S S E T H:
WHEREAS, Employer and Employee have previously entered into an
employment agreement dated July 1, 1997, as amended by that certain First
Amendment to Employment Agreement dated January 1, 1999, as further amended by
that certain Second Amendment to Employment Agreement dated January 1, 2000,
(collectively the "Agreement") under which Employee is currently employed by
Employer;
WHEREAS, compensation under the Agreement is set for each calendar year
during the term of the Agreement by agreement of Employer and Employee, and the
Employer and Employee have agreed upon the compensation arrangements for
calendar year 2001 and now desire to substitute the attached Exhibit A as
Exhibit A to the Agreement effective as of January 1, 2001;
NOW, THEREFORE, in consideration of the terms and conditions set forth
in this Amendment, the parties hereby agree that the Agreement is hereby
modified as follows:
1. Replacement of Exhibit A. Exhibit A, Compensation, attached to the
Agreement is hereby replaced by the Exhibit A dated January 1, 2001 and
attached to this Amendment.
2. This Amendment shall be an amendment and modification to the Agreement and
shall become part of the Agreement and employment arrangement between
Employee and Employer from and after the date of this Amendment. All
capitalized terms not defined herein shall have the same meaning as set
forth in the Agreement. Any conflict between terms of this Amendment and
the Agreement will be resolved in favor of this Amendment. Except as
amended herein, all terms of the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
EMPLOYEE: PHYAMERICA PHYSICIAN
GROUP, INC.
(SEAL) By:
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Xxxxxx X. Xxxxxxxx, Xx. Its:
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EXHIBIT A
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Compensation
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January 1, 2001
1. Base Salary. For services provided as an employee of Employer, Employee
shall receive, a base salary of $240,000 per annum (the "Base Salary")
payable in accordance with Employer's current payroll practices. The Base
Salary shall be subject to annual review and adjustment as of each January
1, with the next review and adjustment to be effective January 1, 2002.
2. Incentive Bonus. For calendar year 2001, Employee shall be entitled to an
incentive or performance bonus (the "Incentive Bonus") of up to 40% of
annual Base Salary, based on the following:
(a.) Employee must be employed by Employer on the last day of the measuring
period for the incentive performance bonus (the last day of the
calendar quarter for quarterly incentives, and the last day of the
calendar year for annual incentives) unless Employee's employment has
been terminated (i) by Employer without cause under Section 12(a),
(ii) by death or disability of Employee under Section 12(d) where such
death or disability occurs within the last 4 months of 2001 or (iii)
by Employee because of a material breach by Employer as provided in
Section 12(e).
(b.) Employee's Incentive Bonus shall be based on the following criteria,
subject to a cap of 40% of annual Base Salary as previously indicated:
(i) 2.5% of Base Salary for each calendar quarter (up to a total of
10% of Base Salary per year) in which PhyAmerica Physician
Services, Inc. ("PPS") achieves an operating profit of 5% or
greater. For purposes of this incentive calculation only,
operating profit shall be determined prior to debt and financing
expense allocated to PPS, including program fees or other
financing costs arising out of the receivables financing
provided by affiliates of National Century Financial
Enterprises, Inc. ("NCFE").
(ii) up to 5% of Base Salary for successful implementation of a
managed care contracting department and a physician or group
enrollment process for the Company, in which it is demonstrated
that the collections for physician services have been increased,
using PPS' largest fifteen client accounts, as measured by
increased collections per relative value unit ("RVU") produced
or by increased collections per visit.
(iii) up to 5% of Base Salary for (1) renewal of the professional
liability insurance (malpractice) program for the Company, its
subsidiaries and all independent contractor physicians and other
contracted or employed healthcare providers, and (2) the
implementation of a risk management department, including
oversight over the hiring of a senior level manager for the
department and the appropriate staffing of the department to
track and manage the reporting of all malpractice claims and
incidents, oversight over the claims management and resolution
of claims and malpractice lawsuits and the maintenance of claims
loss runs and other related information in a loss run and claims
database system.
(iv) 2.5% of Base Salary for each calendar quarter (but limited to a
maximum of 5% of Base Salary per year) in which the Company, on
a consolidated basis, achieves or exceeds budgeted net operating
results, after debt expense, including the program fees and
related costs of the NCFE financing.
(v) up to 15% of Base Salary as determined solely in the discretion
of the Compensation Committee of the Board of Directors of
PhyAmerica Physician Group, Inc.
