EXHIBIT 10.3
EMPLOYMENT AGREEMENT
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Between FOHP, INC. (FOHP) and XXXX X. XXXXXXX (Employee).
WHEREAS, FOHP and Employee believe a written employment agreement is appropriate
to describe their relationship and to serve as the basis for effective
communication between them,
NOW, THEREFORE, FOHP and Employee, for the consideration specified in this
Agreement, agree as follows:
1. TERM. FOHP and Employee hereby agree that FOHP employ Xxxx X. Xxxxxxx as
Executive Vice President, Financial and Business Services of FOHP, Inc.
for an indefinite period which shall be no less than two years from July
1, 1995. During his employment, Employee shall be subject to immediate
termination for egregious misconduct. At the conclusion of the two year
period, Employee's employment agreement shall automatically renew itself
from year to year and thereafter if FOHP wishes to terminate the
employment relationship, it may do so provided a minimum six-months
written notice of non-renewal is provided to Employee of the intention to
end the employment relationship. Also, if FOHP does not wish to continue
the employment relationship at the end of the initial two year period, the
requirement of the minimum six-months written notice of non-renewal shall
also apply. During the period of notice of such non-renewal, Employee may
continue to work (at the discretion of FOHP, Inc.) the remainder of the
contract term.
2. RESPONSIBILITIES. Employee desires to enter into the full and active
employment, reporting directly to the President and CEO of FOHP, Inc. The
general responsibilites the Employee will be accountable for are as
follow:
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a. FINANCIAL FUNCTION. All financial functions of each Strategic Business
Unit (SBU) in the family of FOHP, Inc. Shall be under Employee's
supervision. These shall include Commercial HMO/PPO Programs and
Partnership Program.
Strategic Business Divisions which are part of FOHP, Inc. and all FOHP,
Inc. corporate financial activities shall remain under the control of the
Chief Operating Officer. It is expected that all financial results of each
of the SBU's under Employee's authority will provide information to FOHP,
Inc. For the purposes of consolidated reporting.
Divisions which are not included today, but which may be included later,
are the following: Workers Compensation (FMCO), Medicaid, Medicare, and
Affiliated Health Services.
b. BUSINESS SERVICES. Responsible, within each of the previously described
SBU's, for the assistance and/or direction of the following, which shall
not be considered an all inclusive list:
o Business Plan Development
o Pro-forma Development
o Budgets
o Actuarial and Rating Services
o New Product Pricing/Feasibility studies
c. PARTNERSHIP INITIATIVES. Responsible, with the President and CEO of FOHP,
for:
(i) Development of partnership arrangements and/or corporate structures
which facilitate partnership activities, corporate affiliations
and/or product introductions. As of today (more may be added) these
include the following:
o Health Insurance Plan of New York (HIP)
o United Insurance Companies, Inc. (UICI)
o First Choice of Long Island (working with FOHP, NY)
o Alliance Health Plan (working with GPD, FOHP, Inc.)
(ii) Identifying partnership opportunities and strategies in new or
contiguous geographic areas of operation and bringing these new
programs to market. There are many other activities and
responsibilities which Employee may be asked to take responsibility
for and/or operate. As a newly formed and high
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growth organization, neither FOHP nor the President and CEO of FOHP,
Inc. can commit to a fixed set of responsibilities which do not
change, nor can FOHP stipulate to a fixed set of responsibilities for
any single manager for the duration of their employment
3. SALARY. Xxxx X. Xxxxxxx shall be paid $150,000 per year for his salary.
a. Employee shall be eligible for an annual bonus up to 20% of base
salary. The annual bonus will be determined by the President and CEO
of FOHP, Inc. based on the successful attainment of yearly goals and
objectives and will be payable no later than thirty (30) days after
the end of each year of the Agreement.
b. Employee shall receive a signing bonus of $5,000, payable in
Employee's first paycheck from FOHP.
c. Provided Employee is employed pursuant to this Agreement on July 1,
1997, Employee will be paid a deferred incentive payment equal to
seven percent (7%) of the total amount of base compensation and
annual bonuses paid to Employee during the term of this Agreement.
Said deferred incentive payment will be paid to Employee no later
than July 31, 1997. FOHP will account for, but not be required to
fund the deferred incentive payment until it is required to pay the
Employee said monies in accordance with the terms of this Paragraph
and the Agreement.
4. BENEFITS. The following benefits will be provided by FOHP:
a. HEALTH INSURANCE (MEDICAL AND DENTAL): Coverage will be available in
accordance with that provided to senior management of FOHP.
b. 401-K PENSION AND STOCK OPTIONS: Employee shall be eligible for
participation and the same contributions provided to senior
management of FOHP for such plan(s) as may exist, now or in the
future.
c. VACATION: Employee shall accrue four (4) weeks vacation each contract
year.
d. SICK LEAVE: Employee shall receive annual sick leave in accordance
with the policy of FOHP, provided, however, in the case of Employee's
prolonged and continuous
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illness, FOHP will pay Empl;oyee full salary for the first three (3)
months of such illness.
e. DISABILITY: Short-term and long-term disability insurance will be
available in accordance with the amount of coverage provided to
senior management of FOHP and shall be fully paid for by FOHP.
f. LIFE INSURANCE: Coverage at a fixed amount shall be provided in
accordance with that provided to senior management of FOHP and shall
be fully paid by FOHP. Additional coverage may be obtained at
Employee's expense.
g. Employee shall be provided with an AUTOMOBILE, gasoline credit card,
automobile insurance and maintenance, all at FOHP's expense.
h. Employee shall also be reimbursed for other business-related expenses
in accordance with FOHP policy for employee REIMBURSEMENT.
5. SEVERANCE
a. In the event FOHP terminates the employment of Employee prior to the
expiration of the term of this Agreement for reasons other than those
set forth in Paragraph 1 of this Agreement, (said termination
hereinafter referred to as SEVERANCE) Employee shall be paid the
greater of the amount of monies remaining and due according to this
contract or a one (1) year salary payment (plus earned bonuses and
benefits). In addition, in the event FOHP does not renew this
Agreement, then;
b. FOHP will pay to Employee, in lump sum, on or before September 15,
1997, an amount equal to the sum of the following: (i) One half (1/2)
times the base compensation in effect for the employment year ending
July 31, 1997.
c. In the event employment with FOHP or its successor is involuntarily
terminated, employee will receive professional outplacement support
at company expense.
d. In the event of Severance, FOHP agrees to make no announcement
regarding said Severance unless the timing, form, and manner of any
such announcement is explicitly agreed upon by Employee.
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6. CHANGE TO FOHP OWNERSHIP. FOHP and Employee agree if there is a change in
FOHP ownership which affects Employee's management position, Employee will
receive the considerations provided below. "Change to FOHP Ownership"
shall mean a merger, consolidation, and/or sale of all or a major portion
of the assets or the stock of FOHP. If such change occurs and affects
Employee's position (in terms of compensation, title, authority, duties,
reporting relationships, reports, geographic location, etc.) and no
equivalent or better position is available in FOHP or a new or successor
organization which is acceptable to Employee, Employee shall receive all
the compensation and benefits provided under paragraphs 5 a, b, c, and d
of this Agreement.
7. INDEMNIFICATION. Employee shall be indemnified to the fullest extend
permitted by law against any claims asserted against him personally
arising out of or related to his position with FOHP or its affiliated
entities, provided employee has not acted egregiously, permitted fraud or
other illegal acts, or engaged in gross misconduct. Indemnification shall
include payment of attorneys fees, legal costs and expenses, and costs of
settlement.
8. CHANGES TO AGREEMENT. No written or oral modification, amendment, addition
to this Agreement, nor waiver of any of its provisions, shall be valid or
enforceable unless in writing and signed by the signatories to this
Agreement.
9. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
FOHP and Xxxx X. Xxxxxxx with respect to the subject matter contained
herein and supersedes any other prior or contemporaneous agreement either
oral or in writing purporting to govern this subject matter. Xxxx X.
Xxxxxxx and FOHP have agreed to relocation allowances and/or
reimbursements as shown in Attachment A.
10. SEVERABILITY. The invalidity or unenforceability of any provisions of this
Agreement shall in no way affect the validity or enforceability of any
other provision.
11. WAIVER. Failure to insist upon strict compliance with any of the terms,
covenants, or
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conditions set forth in this Agreement shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment
of any right or power under the Agreement at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time
or times.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey and applicable federal
law.
I UNDERSTAND AND AGREE TO THE TERMS AND CONDITIONS OF THE AGREEMENT AS SET FORTH
ABOVE.
FOHP, INC.
/S/XXXX X. XXXXXX /S/XXXX X. XXXXXXX
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Xxxx X. Xxxxxx Xxxx X. Xxxxxxx
President & Chief Executive Officer Executive Vice President, Financial
& Business Services
7/17/95 7/17/95
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Date Date
Enc.: Attachment A
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ATTACHMENT A
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RELOCATION AND/OR TEMPORARY LIVING:
If you choose to begin work without your family moving with you, FOHP will rent
an apartment for you from February 1 until (no later than) August 30, 1995. In
addition, we will provide you with bi-weekly trips home, and a living allowance.
If you wish to move your family, as soon as possible, we will rent a home until
(no later than) August 30, or until a home can be purchased (whichever comes
first.)
In the latter case, FOHP will assist you in obtaining a bridge loan and either
pay for the bridge loan or current mortgage (whichever is less for up to 12
months from the date the bridge loan is obtained. FOHP will also cover the cost
of the move and provide $10,000 toward closing costs.*
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*If you wish to stay with either your family or your wife's family until you
find a home, FOHP will pay you $10,000 more toward your closing costs.
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