EXHIBIT 6(1)
March 13, 1998
Mr. Xxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000
RE: OFFER OF EMPLOYMENT
Dear Xxxx:
This letter outlines the terms upon which you are being offered full-time
employment as the Chief Financial Officer of MD HealthShares Corporation and
affiliates, including Patient's Choice, Inc. (collectively, the "Company") in
accordance with the position description attached hereto. Some benefits being
offered to you are subject to establishing and/or securing the appropriate
benefit plans, programs and policies. Such plans are subject to a variety of
federal and state laws and regulations and those laws and regulations may
require or warrant changes in or elimination of some of the benefits outlined
below. Consequently, while the Company contemplates providing you with the
benefits as outlined, this offer of benefits is qualified and the benefits
contingent upon a final decision to establish or secure the stated benefits
plans, programs, and policies and the actual terms of such plans, programs and
policies.
The duties and responsibilities of the position of Chief Financial Officer
are outlined in the attached job description. Your employment will be "at will"
and nothing in this letter shall be construed as creating an employment contract
or agreement with Company for any fixed term.
Subject to the foregoing, your employment by the Company will include the
following terms:
. Annual base salary of $140,000, payable semi-monthly while employed at the
Company.
. Eligibility for an annual bonus based upon targets to be set by mutual
agreement between you and the Chief Executive Officer shortly after
commencement of your employment and will be modified annually as the Chief
Executive Officer deems prudent. The first year bonus will be guaranteed at
10% of your annual base salary.
. Restricted stock grants of the Company's Class A Non-Voting Common Stock
upon completion of 18, 36, 48, and 60 months of satisfactory employment, in
the amounts of 1,250, 2,500, 2,500, 4,000 respectively. Actual ownership in
each restricted stock grant will vest at the rate of 1/3 per year pursuant
to the attached step schedule. You will, however, be entitled to receive
any dividends, income, or other ownership privileges from each restricted
stock grant at the time of the grant.
. For example, upon the completion of 18 months of satisfactory employment
service you will receive a grant of 1,250 shares. You will be given actual
ownership of 417 at that time and be entitled to dividends, income or other
ownership privileges in the remaining 833 shares. One year following the
date of the initial grant, you will be entitled to actual ownership of
another 417 shares with the actual ownership of the final 416 shares
provided two years following the date of the initial grant.
. The terms and conditions of your rights to and in any such Common Stock
shall be set forth in a separate agreement or agreements which shall, among
other things, outline any restrictions on the shares of Common Stock.
Should the company sell, merge, or otherwise become part of another
organization, your vesting in the stock grants shall accelerate and become
wholly vested at that time. Should there be a change of control from the
elected Board of Directors of the present physician shareholders of the
Company to another organization or a change in the CEO position, you shall
have the option of continuing employment or resigning with six (6) months
base salary (no benefits other than as required by state or federal law).
. The Company will pay for family health benefits coverage through "Patients
Choice", the Company's HMO subsidiary, or alternative health benefits
coverage available to the Company's employees.
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. The Company will pay for standard long-term disability insurance that will
provide for salary continuation in an amount equal to 50% of your annual
base salary at the time of disability. Eligibility for and duration of
long-term disability benefits will be subject to the policy terms in
force at the time of disability.
. The Company will reimburse you the premium for a term life insurance policy
in an amount equal to three (3) times your annual base salary. Such policy
may be issued by a life insurance company of your choice, provided it has a
"Best" rating of "A" or better. At a future date, this benefit will be
provided through a Group Term Life Insurance program. At that time, the
Company will cease reimbursing you the premium previously referred to.
. Participation in a defined contribution retirement plan based upon a
percent of your base salary. Participation and benefits will be subject to
the terms of the applicable plan documents in force at the time of
retirement. It is expressly understood that establishment of such a defined
contribution retirement plan shall be subject to and contingent upon an
analysis of the relevant tax, ERISA, and other legal and financial
considerations. The Company retains the right to amend, modify or terminate
any such plan hereafter established in accordance with the terms of the
plan document.
. Reasonable travel expenses will be reimbursed for travel on Company-related
business upon submission of supporting documentation. Prior approval may be
required on certain excess amounts as may be defined by the Chief Executive
Officer.
. Car allowance of $500.00 per month.
. Reasonable relocation expenses including moving normal household goods, new
home closing costs, temporary living expenses, traveling to visit family
and costs of having family here for your local housing search, and other
relocation expenses (all grossed up to minimize your tax consequences) will
be reimbursed or paid for by the Company directly, to a maximum of $40,000.
Should you not complete one full year employment for any reason other than
at the Company's convenience, the relocation expenses will be recouped to
the extent possible from your final compensation.
. You will be entitled to four weeks paid vacation annually.
. It is expressly understood and agreed that you are an at-will employee and
that the Company has the right to terminate your employment at any time
with or without stated or actual reason. In the event of termination of
your employment relationship, you will be eligible for the following
benefits:
For Cause Termination. The Company may terminate your employment at any
time for cause and such termination will be effective immediately. For the
purposes of this paragraph "for cause" shall mean dishonest, fraudulent, or
illegal acts; activity harmful to the reputation of the Company; conduct
not in the best interest of the Company's good name; failure by employee to
wilfully perform his obligations under the terms of this agreement; and/or,
a violation of any statutory or common law duty of the Company. If your are
terminated "for cause", you will be entitled to payment of any accrued
salary and benefits through the date of termination and an additional lump-
sum payment of one month's base salary. Any shares of Common Stock that
have vested must be sold back to the Company at the greater of book value
or market price, if a market has been established. All shares of Common
Stock in which you have not yet vested in an actual ownership interest will
revert to the Company. Purchase of shares shall occur within ninety (90)
days of the date of termination.
Termination for the Company's Convenience. The Company may, for its own
convenience, terminate your employment at any time, without a "for cause"
showing, by giving at least thirty (30) days prior written notice. If your
employment is terminated for the Company's Convenience, you will be
entitled to payment of any accrued salary and benefits through the date of
termination. In addition, if the termination for convenience occurs in the
first two years of employment, you will be paid an additional six (6)
months of base salary (no benefits except those required by law) as
severance. If the termination for convenience occurs in the third year,
severance shall be an additional nine (9) months; if in the fourth year or
after, severance shall be twelve (12) months. The
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payment of severance shall be a lump sum due within five (5) days of the
date of termination. Any shares of Common Stock that have vested must be
sold back to the Company at the greater of book value or market price, if a
market has been established. All shares of Common Stock in which you have
not yet vested in an actual ownership interest will revert to the Company.
Purchase of shares shall occur within ninety (90) days of the date of
termination.
Voluntary Termination. You may terminate your employment with the Company
at any time, for any reason, by giving the Company at least thirty (30)
days prior written notice. If you terminate your employment, you will be
entitled to payment of the accrued salary and benefits through the date of
termination. You will be eligible for no additional severance payments. Any
shares of Common Stock that have vested must be sold back to the Company at
the greater of book value or market price, if a market has been
established. All shares of Common Stock in which you have not yet vested in
an actual ownership interest will revert to the Company. Purchase of Shares
shall occur within ninety (90) days of the date of termination.
You agree to execute a separate Confidentiality Agreement that says you
shall not, during or after termination of your employment by the Company,
disclose or communicate any information or knowledge of a confidential nature
relating to the Company or its shareholders, directors, officers, employees,
healthcare providers, members or enrolees, the Company's trade or business
secrets, or any information in respect of which the Company owes an obligation
of confidence to any third party (i.e. any person, firm or corporation not
affiliated with the Company) or in any manner use any such information or
knowledge other than for the benefit of the Company.
This agreement shall become and be effective on and as of the anticipated
start date, or such later date when you assume the actual performance of duties
for the Company under this agreement; provided, however, that this agreement
shall be legally binding on the parties hereto on the date on which it has been
signed by you and the Company.
Please acknowledge your understanding of and agreement to these terms and
conditions by signing the letter where indicated below. We look forward to your
joining the MD HealthShares team as we quickly move forward to becoming the
premier HMO in Louisiana.
Sincerely,
MD HEALTHSHARES CORPORATION
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Chief Executive Officer
Signature Date: 3-13-98
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Acceptance:
/s/ XXXX XXXXX
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Xxxx Xxxxx
Signature Date: 3-16-98
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