Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of the Effective Date (as hereinafter defined) by and between PHYAMERICA
PHYSICIAN SERVICES, INC. (the "Employer"), a Delaware corporation with its
principal place of business in Durham, North Carolina, and XXXX X. XXXXXX
("Employee"), a resident of Oakland, New Jersey.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Employee was previously employed as Executive Vice President and
Chief Financial Officer by America Physician Group, Inc., the parent company of
Employer pursuant to an Employment Agreement dated January 1, 2001 (the
"Previous Agreement"), and
WHEREAS, subject to the terms and conditions hereinafter provided,
Employer desires to employ Employee, and Employee desires to accept such
employment, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, and the agreements and covenants set forth herein,
Employee and Employer hereby agree as follows:
1. Employment. Employer hereby employs Employee, and Employee hereby
accepts such employment, subject to the terms and conditions stated herein. Upon
the commencement of the term of this Agreement on the Effective Date, the
Previous Agreement shall terminate and be of no further force and effect (except
that the provisions of Sections 8, 9, 10 and 11, dealing with confidentiality,
non-compete and non-solicitation shall survive and are continued by the
provisions of this Agreement).
2. Term. This Agreement shall be effective as of June 11, 2001 (the
"Effective Date") and shall continue until June 30, 2002 (the "Initial Term")
unless either Employer or Employee terminates this Agreement pursuant to Section
12 herein. Subsequent to the Initial Term, unless Employer or Employee
terminates this Agreement pursuant to Section 12 herein, this Agreement shall
automatically renew itself for successive one-year periods (the Initial Term
plus all such renewal periods, if any, collectively, the "Term").
3. Duties. During the Term the Employee shall perform the following duties
pursuant to this Agreement:
(a) Employee shall serve as Chief Operating Officer and an Executive
Vice President of Employer. Employee shall perform such services principally at
Employer's headquarters in Durham, North Carolina, where Employer will provide
office space and administrative support for Employee.
(b) Employee shall at all times abide and observe Employer's written
policies and procedures as are in effect from time to time. Employee
acknowledges that Employer is an equal opportunity employer and that Employer's
established policy is not to discriminate on the basis of age, marital status,
race, color, sex, religion or national origin, or to violate any federal or
state anti-discrimination law. Employee shall be responsible for carrying out
and implementing the foregoing policy throughout the operations and activities
of Employer.
(c) Employee may be elected to the Board of Directors of Employer,
or of one or more of the Employer's parent company or affiliates. If so elected,
Employee may be removed at any time from any board position by action of the
shareholders of such company or otherwise as provided in the bylaws or laws
applicable to such company, and such removal shall not be considered to be a
breach by the Employer or Employee of this Agreement.
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4. Compensation. For the services provided by Employee as an employee of
Employer, Employer shall pay Employee the annual base salary (the "Base Salary")
and other compensation identified on Exhibit A.
5. Additional Benefits. During the term of this Agreement, Employee shall
be entitled to and Employer shall provide to Employee, at no cost to Employee,
all employment benefits which are generally provided to senior executive
officers of Employer and its affiliates, including without limitation the
following:
(a) Vacation and Sick Leave. Employee shall be entitled to paid
vacation in accordance with that provided to other senior executive officers of
Employer, plus all legal holidays observed by Employer and in accordance with
the Company's policy. The dates of Employee's vacation shall be reasonably
selected by Employee to reasonably minimize the inconvenience to Employer and
with due regard to his responsibilities and duties hereunder, including, without
limitation, making reasonable provision for coverage of Employees
responsibilities and duties. Employee shall be entitled to paid sick leave in
accordance with the Company's policy. Unused sick days for any calendar year may
be carried over and shall accrue for use upon Employee's subsequent illness;
provided, however, that upon Employee's termination of employment hereunder for
any reason, Employee shall not be entitled to any payment or other compensation
for any current or accrued sick days.
(b) Medical, Dental and Other Insurance. Employee may elect to be
covered by medical, dental, life, long term disability and other insurance
programs provided by Employer, or Employee may elect to opt out of such
coverage. The compensation payable hereunder shall not be adjusted based upon
any election to participate or not participate in any such programs.
(c) Continuing Professional Education. Employee shall be entitled to
a maximum of five (5) paid days per year to be used for continuing professional
education. Employer will pay the cost of continuing professional education
required to maintain the professional license(s) of Employee up to the amount of
$2,500 per year, and provide reimbursement of usual and customary dues and
license fees consistent with Employer's policies.
(d) Short-term Disability. During the Term, Employee shall be
eligible for participation in, and shall receive all benefits under, Employer's
short-term disability insurance plan, in accordance with such plan's terms as in
effect from time to time.
(e) Paging Service. Employer shall provide and pay the cost of a
paging service for use by Employee.
(f) Business-related Expenses. Employer shall reimburse Employee for
all reasonable actual out of pocket expenses incurred by him in the performance
of his duties hereunder and which are incurred at the direction of Employer and
accounted for in accordance with Employer's written expense guidelines and
reimbursement procedures and practices as in effect from time to time,
including, but not limited to, travel, postage, shipping, copying, fax, long
distance telephone and cellular phone. Employee's automobile expenses shall be
reimbursed based on the then applicable per mile amount allowed as a deduction
for federal income tax purposes.
(g) Travel Expenses for Durham Office. In addition to the benefits
generally provided to senior executive officers of Employer, until such
time as Employee relocates to Durham, North Carolina, Employer will pay
reasonable travel/lodging/automobile expenses incurred by Employee in
order to perform services in Durham, North Carolina in an amount not to
exceed $3,300 per month. This section shall be subject to review and
modification every six (6) months until Employee relocates to the Durham
area.
6. Devotion of Time. During the Term, Employee's full time and attention
shall be devoted to the business of Employer and its affiliates in a manner and
to an extent commensurate with the commitment of other executive officers of
Employer, to fulfill the duties and responsibilities under the Agreement and to
advance the business interests and good reputation of Employer and the direct
and indirect subsidiaries of Employer.
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7. Confidentiality and Non-Disclosure. Employee acknowledges that during
the Term he will gain access to, or possession or knowledge of, numerous trade
secrets, confidential information, other valuable properties not generally
available to the public and proprietary information, including but not limited
to, hospital and healthcare facility client lists, client files and records,
lists of potential clients, prospects or targets, and/or other market and
marketing data and plans, price books, promotional devices and methods, business
methods, manuals and plans, business and sales techniques, strategic plans,
computer programs, hospital and physician contracts, and research and
development (hereinafter referred to collectively as "Confidential
Information"). Employee acknowledges that such Confidential Information is owned
by Employer or by subsidiaries or affiliates of Employer (for purposes of this
Agreement, Employer and its subsidiaries and affiliates are collectively
referred to as the "Company"), is unique and a valuable asset of the Company and
is to be used only for the Company's benefit. Employee shall not, during or
after the term of this Agreement, disclose, divulge, reveal, transfer,
reproduce, sell, capitalize upon or take advantage of such Confidential
Information and, in addition, Employee shall exercise all reasonable efforts and
precautions to protect such Confidential Information from misappropriation,
misuse, disclosure, breach of confidentiality, or other conduct or action
inconsistent with the Company's rights; provided, however, that Confidential
Information may be disclosed to the extent required by law or court order and
Confidential Information shall not include information (i) generally available
to the public other than by unauthorized disclosure, (ii) developed by Employee
independently of his employment hereunder as shown by his written business
records regularly kept; (iii) rightfully obtained by the Employee from a third
party without restriction and without breach of any nondisclosure obligation; or
(iv) released by the disclosing party without restriction on further disclosure
by any individual or entity. Upon termination of this Agreement, Employee shall
return immediately to Employer all of the Company's property (including, without
limitation, Confidential Information) in Employee's possession or control. Any
materials, manuals, documents or records developed, written, edited or designed
by Employee while employed by Employer are the exclusive property of Employer.
8. Covenant Not To Compete. Employee has, as a result of employment under
the Previous Agreement, and will, as a result of this employment under this
Agreement, be responsible for the executive management and direction of
substantial business resources and assets of the Company and will develop
additional contacts and relationships with numerous individuals, executives,
hospitals and healthcare companies. Such individuals and organizations will have
business and contractual relationships with the Company that will be a valuable
asset thereof. Employee therefore agrees, as follows:
(a) For a period of six (6) months after the end of the Term,
Employee will not, in the states in which the Employee is providing services at
the end of the Term, become employed by, own, operate, manage, or provide other
such similar services to any business that provides hospital emergency practice
management or staffing services such as are provided by the Company.
(b) For a period of twelve (12) months after the end of the Term,
Employee will not solicit any hospital, clinic, healthcare facility or other
client having a contractual or business relationship with the Company, or any
prospect or potential client to which a marketing proposal or presentation was
made within six (6) months of termination, and of which Employee was aware,
involving the provision of hospital emergency department management services,
which solicitation would be for the purpose of providing healthcare or
healthcare related services.
(c) For a period of twelve (12) months following the end of the
Term, Employee will refrain from any activity of any nature intended or
reasonably calculated to result in the termination or cancellation of any
contractual or business arrangement between the Company, and any insurer,
client, facility or other business or entity.
(d) Employee shall notify any entity or organization of which he is
a director, significant shareholder (or other equity owner), manager, general
partner, executive officer or as to which he is otherwise a controlling party or
over whom he exerts significant influence (an "Affiliate") of the provisions of
Sections 7, 8 and 9 of this Agreement in the event that such Affiliate
encourages Employee to engage in any activity that would be prohibited for
Employee personally under this Agreement.
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(e) Notwithstanding anything to the contrary in this Agreement,
after the end of the Term Employee shall have the right, during any of the
restrictive time periods set forth in Sections 8, 9 or 10, or otherwise, to be
employed by any hospital as a hospital administrator or a similar position and
such employment shall not constitute a violation of this Agreement. In addition,
nothing in this Agreement shall prevent Employee from making passive investments
in third parties so long as such investments do not require Employee to perform
any services prohibited by any of the provisions of this Section in connection
with any such investments in such third parties.
9. Solicitation of Other Employees. Employee agrees, for a period of
twelve (12) months after the end of the Term, not to solicit or seek to
influence, either directly or indirectly, any employee or any physician or
healthcare provider under contract with the Employer or any of its affiliates at
any time during Employee's employment by Employer, to enter into any employment
agreement, independent contractor arrangement, or any other contractual
arrangement whereby such individual would perform services for compensation,
either directly or indirectly, for any person, firm, corporation or other entity
or business that provides products or services in competition with the Company.
10. Breach and Remedies.
(a) Employee acknowledges that the breach or threatened breach of
any of the covenants set forth in Sections 8, 9 or 10 may result in immediate
and irreparable injury to the Company. Accordingly, Employee agrees that the
provisions of Sections 8, 9 and 10 shall inure to the benefit of and may be
enforced by the Company. In addition to any rights or remedies available to the
Company for a breach by Employee of Sections 8, 9 or 10, the Company shall be
entitled to injunctive relief to enforce the obligations of Employee contained
in such Sections. Nothing herein shall be construed as prohibiting the Company
from pursuing any other legal or equitable remedies that may be available to it
for any such breach or threatened breach, including the recovery of damages from
Employee.
(b) The periods of time provided for in Sections 8, 9 or 10,
respectively, shall be extended by a period of time equal to the duration of any
breach of any such section.
(c) Employee hereby acknowledges that the covenants set forth in
Sections 8, 9 and 10 are reasonable in all respects and are necessary to protect
the legitimate business interests of the Company. It is the intention of the
parties to restrict the activities of Employee only to the extent necessary to
protect the legitimate business interests of the Company, and not to deprive
Employee of the right or ability to earn a livelihood. Employee acknowledges
that the provisions of Sections 8, 9 and 10 are substantially identical to the
provisions of Sections 8, 9 and 10 of the Previous Agreement. The provisions of
Sections 8, 9 and 10 of this Agreement shall be a continuation of the provisions
of the Previous Agreement. Employee acknowledges that he received valuable
consideration in the form of increased compensation and a fixed term in the
Previous Agreement, and he has received additional valuable consideration in the
form of increased compensation, a fixed term, severance benefits and a promotion
in this Agreement to support the non-compete and non-solicitation provisions of
this Agreement.
(d) In the event of a bankruptcy of the Employer and a rejection of
this Agreement pursuant thereto, Sections 8, 9 and 10 hereof shall cease to be
effective immediately upon such rejection.
11. Vacation and Sick Leave. All earned, accrued and unused vacation and
any unused sick pay, upon termination, will be governed by Employer's then
current policies.
12. Termination. This Agreement may be terminated as follows:
(a) Employer may terminate this Agreement without cause effective at
any time after the end of the Initial Term upon thirty (30) days prior written
notice to Employee. The effective date of such termination shall be the date set
forth in such written notice ("Termination Date"); provided, however, that the
Termination Date shall be at least 30 days after the date of such notice (such
30 day or longer period, the "Notice Period"). In the event of such termination,
Employee, if requested by Employer, shall continue to perform the obligations
and duties
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specified under this Agreement and assist with the transition of duties to a new
employee during the Notice Period. Employer, at its option, may notify Employee
at any time during the Notice Period that no further services are to be
performed; provided, however, that Employee shall receive his Base Salary during
the Notice Period. Employee may terminate his continued employment pursuant to
this Agreement without cause at any time during the Term upon thirty (30) days
prior written notice to Employer. Whereupon Employee shall be paid his Base
Salary only through the date his employment term initiates. In the event that
this Agreement is terminated without cause by either party, the covenants set
forth in Sections 8, 9 and 10 shall continue in effect, and the applicable start
date for the periods of time in Sections 8, 9 or 10 shall be the later of the
date that notice of termination is given or the last date upon which services
are performed by Employee.
(b) If this Agreement is terminated without cause by Employer at any
time during the Term, Employer shall pay Employee a severance benefit equal to
six months of Employee's Base Salary then in effect (see Exhibit A), all to be
paid to Employee in equal monthly installments over the period following the
Termination Date in accordance with Employer's regular monthly payroll,
beginning with the first payroll payment date following termination (the
"Severance Benefits"). If the Agreement is terminated without cause by Employer
or Employee, any PhyAmerica ETA Group Incentive Bonus and any Incentive Bonus
described in Sections 2 and 3 of Exhibit A that has been earned as of the date
of termination shall be payable to Employee as provided in Exhibit A.
(c) This Agreement may be terminated by Employer at any time for
cause upon written notice to Employee, which notice shall specify the reason for
termination. For purposes of this Section 12(c), cause shall include, but shall
not be limited to, the following: fraud; dishonesty; substantial and continuous
nonperformance of assigned duties; failure to comply with a material written
policy of Employer; unlawful activities for which Employee is indicted or
convicted of a felony in a jurisdiction of the United States; and material
breach of this Agreement; provided that in the event Employer intends to
terminate this Agreement pursuant to this Section 12(c) for any cause other than
fraud, dishonesty or indictment or conviction of a felony, then it shall first
give written notice of same to Employee with the specific reasons for
termination and afford Employee thirty (30) days to cure such deficiency or
default.
(d) This Agreement shall terminate upon the death or total and
permanent disability of Employee. In the event that this Agreement terminates
due to Employee's death or total and permanent disability, Employer shall pay
upon such termination to Employee, or the Employee's estate or personal
representative, as the case may be, Employee's Base Salary accrued through the
date of Employee's death or the date Employee becomes totally and permanently
disabled, as the case may be. Any PhyAmerica ETA Group Incentive Bonus and any
Incentive Bonus described in Sections 2 and 3 of Exhibit A that has been earned
as of the date of termination as a result of death or disability shall be
payable to Employee, or his estate or personal representative, as the case may
be, as provided in Exhibit A. Permanent disability for purposes of this
Agreement shall mean the inability to perform the functions of Employee's
position for a continuous period of six (6) months as determined by a physician
selected by both Employee and Employer or, in the event they do not agree, a
physician that is mutually selected by Employee's physician and a physician
designated by Employer to make such selection.
(e) This Agreement may be terminated by Employee upon a material
breach of the terms of this Agreement by Employer upon written notice to
Employer, which shall specify the reason for termination, and if this Agreement
is terminated at any time during the term hereof by Employee under this section
12(e), then Employer shall pay Employee the Severance Benefits. Any PhyAmerica
ETA Group Incentive Bonus and any Incentive Bonus described in Sections 2 and 3
of Exhibit A that has been earned as of the date of termination shall be payable
to Employee as provided in Exhibit A.
(f) Except as expressly set forth herein, all of Employer's
obligations for compensation or other benefits shall terminate upon the
effective date of the termination of this Agreement.
(g) Upon termination of Employee's employment for any reason,
Employee agrees to resign any position as a director of Employer or any of its
subsidiaries then held by Employee. In that regard, Employee agrees that if,
during the term of this Agreement, Employee is elected or appointed to be a
director, upon request of
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Employer, Employee shall execute and deliver to an independent escrow agent
designated by Employer, an undated resignation letter with respect to such
director position, which escrow agent is authorized to date and deliver to
Employer upon receipt of notice from Employer that Employee's employment has
terminated.
13. Compliance With Securities Laws. Employee agrees to comply with all
applicable federal and state securities laws and with all applicable policies of
Employer concerning the buying and selling of stock of Employer by employees to
the extent such policies do not restrict Employee's express rights under this
Agreement.
14. Entire Agreement. This Agreement contains the entire understanding
between the parties and supersedes and cancels any prior oral and written
understanding and/or agreements between them respecting the subject matter of
this Agreement. This Agreement may be amended or modified only in a writing
signed by both parties.
15. Severability. If any provision, term, condition, or clause of this
Agreement or the application thereof shall be found to be invalid or
unenforceable to any extent, then the offending portion shall be construed as
valid and enforceable only to the extent permitted by law and the remainder of
this Agreement shall not be affected thereby and shall remain in full force and
effect.
16. Governing Law. This Agreement is made and entered into in the State of
New York and is to be construed in accordance with and take effect under the
laws of the State of New York without regard to principles of conflicts of laws.
17. Dispute Resolution. The parties shall attempt in good faith to settle
any dispute or controversy arising under, out of, or in connection with or in
relation to this Agreement, or any amendment hereof, or the breach hereof, by
negotiation and mutual agreement; provided that if the parties are not able to
agree within a reasonable period of time (but not more than 30 days), then any
such dispute or disagreement shall be resolved by submitting such dispute first
to mediation and second to arbitration in Durham County, North Carolina. Either
party may make written demand for mediation, in which case the parties shall
mediate the dispute or disagreement with a mediator mutually acceptable to the
parties, or if the parties are unable to agree on a mediator, then a mediator
appointed by the Judicial Arbitration & Mediation Services, Inc. ("JAMS"). Fees
and costs of the mediation shall be borne equally by the parties and each party
shall pay its own professional fees and costs. If the dispute or disagreement is
not settled by mediation within a reasonable period of time (but not more than
90 days), then either party may demand arbitration, in which case the dispute or
disagreement shall be arbitrated in accordance with rules and procedures
established by JAMS. The arbitrator shall be allowed, in his or her discretion,
to require the losing party to pay the reasonable attorney's fees and costs of
the prevailing party. Any award rendered by the arbitrator shall be final and
binding upon each of the parties and judgment thereof may be entered in any
court having jurisdiction thereof. The provisions of Article 45A of the North
Carolina General Statutes (the Uniform Arbitration Act) shall apply to any
arbitration under this Agreement.
18. Assignment. No party shall have any right to assign, mortgage, pledge,
hypothecate or encumber this Agreement in whole or in part, or any benefit or
any right accruing hereunder, without in any such case first obtaining the prior
written consent of the other party hereto, except that Employer may assign this
Agreement to one of its affiliates or wholly-owned subsidiaries with written
notice to Employee, provided that in the event of such an assignment, Employer
shall remain primarily responsible for its obligations hereunder. All rights
hereunder are personal to the Employee and shall cease upon the termination of
this Agreement unless otherwise stated herein; provided, however, that the
provisions hereof shall inure to the benefit of the personal representatives,
heirs and legatees of Employee.
19. Notice. Any notice, or other written communication to be given
pursuant to this Agreement for whatever reason shall be deemed duly given and
received (a) if delivered personally, on the date of delivery, or (b) by
certified mail, postage pre-paid, return receipt requested, three (3) days after
the date of mailing, addressed: in the case of Employer, to its principal office
and marked "Attention: President," and in the case of Employee, to the last
known permanent address according to the books and records of Employer.
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20. Miscellaneous. Any protection, benefits, rights or other provisions
given to Employer in this Agreement shall also be deemed to apply to, protect
and inure to the benefit of Employer's affiliates and subsidiaries. All rights
of Employer expressed in this Agreement are in addition to any rights available
under the common law or other legal principles. Section or paragraph titles or
captions contained in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof. All pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of person or persons, firm or firms,
corporation or corporations, and as context may require. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one agreement. References herein to
the "Agreement" shall include all exhibits and the exhibits and recitals to this
Agreement shall be incorporated herein by reference. All references in this
Agreement to a number of days shall mean calendar days unless expressly provided
otherwise and, in the event the day on which any period of time specified in
this Agreement is to end shall fall on a Saturday, Sunday or other legal holiday
recognized in the State of North Carolina, the immediately subsequent business
day shall be the date upon which such period of time shall end.
(signature page to follow)
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IN WITNESS WHEREOF, the parties sign and seal below, effective the date
first written in this Agreement.
EMPLOYEE:
XXXX X. XXXXXX
_________________________________(SEAL)
Date:
_________________________________
EMPLOYER:
PHYAMERICA PHYSICIAN SERVICES, INC.
By:
_________________________________________
Title:
________________________________
Date:
_________________________________
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EXHIBIT A
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Compensation
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1. Base Salary. For services provided as an employee of Employer, Employee
shall receive, beginning on the Effective Date, a base salary of
$235,000 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 during the term of this Agreement.
2. PhyAmerica ETA Group Incentive Bonus. SHG/PhyAmerica Physician Services,
Inc. provides management services to five professional corporations,
including Emergency Treatment Associates, Xxxx X. Xxxxx, M.D. and Xxxxxx
X. Xxxxxxx, M.D., P.C. which has a contractual relationship with St.
Xxxxxxx Hospital located in Poughkeepsie, New York; Beacon Emergency
Services, P.C. which provides services with respect to a Walk In Center
in Beacon, New York owned by St. Xxxxxxx; Rhinebeck Emergency
Physicians, P.C., which has a contractual relationship with Northern
Dutchess Hospital in Rhinebeck, New York; Ulster Emergency Physicians,
P.C., which has a contractual relationship with The Benedictine Hospital
in Kingston, New York; and Passaic Emergency Physicians, P.C. which has
a contractual relationship with St. Mary's Hospital in Passaic, New
Jersey. Collectively, the Employer management company and the
aforementioned professional corporations are referred to as the
"PhyAmerica ETA Group."
Employee shall be entitled to receive an incentive bonus (the
"PhyAmerica ETA Group Incentive Bonus") equal to 10% of the "Net Cash
Flow" from the operations of the PhyAmerica ETA Group. For purposes of
the Incentive Bonus calculation, "Net Cash Flow" shall be defined to
mean an amount equal to (i) net cash receipts of the PhyAmerica ETA
Group (cash receipts from all medical professional services, consulting
services, subsidy payments and all other sources, after patient refunds
and other similar adjustments), less (ii) all direct expenses (physician
and all other similar adjustments) less all direct expenses (physician
and all other provider compensation, professional liability expenses,
billing and collection expense, any amounts paid for continuing
professional education, dues, licenses and other similar physician and
provider expenses) and less all management company operating expenses
(employee salaries and benefits, rent and occupancy expense and all
other office and operating costs and any other expenses directly related
to the operations of the management company). It is the intention of the
parties to provide an incentive based on the cash flow profitability of
the PhyAmerica ETA Group of contracts managed by SHG/PhyAmerica
Physician Services, Inc. and Employee, and to exclude any allocation of
corporate overhead from Employer and its other operating subsidiaries;
provided, however, to the extent that Employer or any of its
subsidiaries provide certain items that would otherwise be provided
directly by management company, such as, for example, professional
liability insurance, other insurance, telecommunications or long
distance service, etc., such costs would be deducted in the above
calculation of Net Cash Flow.
The Net Cash Flow and any PhyAmerica ETA Group Incentive Bonus shall be
calculated for each calendar quarter, beginning with the calendar
quarter commencing January 1, 2001, and shall be paid as soon as
reasonably practical after such determination is made, but not more than
30 days following the end of the calendar quarter. Employee's right to
receive the Incentive Bonus shall continue (i) until August 31, 2004 if
the Term ends prior to such date or (ii) if the Term continues past
August 31, 2004, until the date on which the last hospital contract for
the provision of emergency services by any of the aforementioned
entities which contracts were in effect on the Effective Date shall
terminate.
3. Incentive Bonus. In addition to Base Salary and the PhyAmerica ETA Group
Incentive Bonus, Employee shall be eligible for additional incentive
bonuses under this Paragraph 3 in a maximum amount not to exceed in the
aggregate twenty-five percent (25%) of Base Salary, as follows (the
individual categories listed below exceed the aggregate cap):
(a) An annual bonus of 5% of Base Salary for successfully organizing and
conducting a Medical Director Leadership Development Seminar for
Employer.
(b) A annual bonus of 5% of Base Salary for successful implementation of
a management reporting system for reports to the Board of Directors,
senior management, regional vice presidents and contract managers.
(c) Quarterly bonuses of 2.5% of Base Salary if PhyAmerica Physician
Services, Inc. achieves a 5% or greater operating profit before debt
and financing expenses (including the costs of the current
receivables sale and subservicing program providing funding for the
Company and its subsidiaries by National Century Financial
Enterprises, Inc. and its affiliates (NCFE) for the quarter, to be
paid within fifteen (15) days of completion of the financial
statements for the Company and its subsidiaries on a consolidated
basis for the quarter.
(d) An annual discretionary bonus of up to 10% of Base Salary to be
awarded in the discretion of the Company's Compensation Committee of
the Board of Directors based on the recommendation of the Company's
Chief Executive Officer.
In the event the term of this Agreement is extended past the initial term,
Employer and Employee will review the Base Salary and bonuses each year and
establish appropriate, mutually agreed upon Base Salary and bonuses for each
additional year of the term of this Agreement.
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