<PAGE>
FORM 10-KSB/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended October 31, 1998
------------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________ to _______________
Commission file number 2-98314-W
------------------------------
MEDICAL ADVISORY SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of small business issuer in its charter)
<TABLE>
<S> <C>
Delwware 52-1233960
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(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
8050 Southern Maryland Blvd., Owings, MD 20736
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(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number (301)855-8070
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Securities registered pursuant to Section 12(b) of the Exchange Act:
<TABLE>
<S> <C>
Title of each class Name of each exchange on which registered
None
----------------------------------------- ____________________________________________________
_________________________________________ ____________________________________________________
</TABLE>
Securities registered pursuant to Section 12(g) of the Exchange Act:
None
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(Title of class)
________________________________________________________________________________
(Title of class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No ____.
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment of this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year:
$3,514,135 for the fiscal year ending October 31, 1998.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. (See definition of affiliate in Rule 12b-2 of the Exchange Act):
$13,601,948 based on stock closing price on January 21, 1999.
3,819,938 Shares of Common Stock ($ 0.005 par value per share) were
outstanding at December 31, 1998.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters, and Control Persons.
- ------ -------------------------------------------------------------
Listed below are the directors and executive officers of the Company.
Directors are elected for one year terms or until their successors are elected
and qualified. Officers hold office until their successors are elected and
qualified or until their earlier resignation or removal.
<TABLE>
<CAPTION>
Age at
Name Position January 21, 1999
- ------------------------ ----------------------------------------- ------------------
<S> <C> <C>
Ronald W. Pickett Chairman of the Board of Directors & 51
President Managing Member of Doc-Talk
L.L.C.
Thomas M. Hall, M.D., Chief Executive Officer and Director 46
M.I.M. President of Assistance Services of
America, Inc.,
President of Hall & Associates, P.A.,
Chief Physician of the Company,
President of Hall & AmDoc Associates,
P.A., and
Hall & DocTalk, Associates, P.A.
Jean-Paul Babey Director 43
Robert P. Crabb Secretary 51
Dale L. Hutchins, Ph.D. Executive Vice President, 37
Chief Operating Officer of Doc-Talk
L.L.C.
Robert C. Snyder Chief Financial Officer, Treasurer 42
</TABLE>
Ronald W. Pickett is the founder of the Company, Chairman of the Board of
Directors and President. He has been an officer and director of the Company
since its inception in 1981. A graduate of Gordon College, Mr. Pickett has
engaged in various entrepreneurial activities for 30 years.
Thomas M. Hall, M.D.,M.I.M., a graduate of George Washington University
School of Medicine, "with distinction", has served as President of Hall &
Associates, P.A., and its predecessor firm since April, 1988, as Chief Physician
of the Company since 1982, and as Chief Executive Officer of the Company since
July 1992. Dr. Hall has been a director of the Company since March, 1992. As
Chief Executive Officer of the Company, Dr. Hall supervises all day-to-day
operations. As Chief Physician, Dr. Hall is in charge of the medical personnel
utilized in the Company's medical information, advice and training operations.
Dr. Hall is a diplomat of the National Board of Medical Examiners, the American
Board of Internal Medicine, and the American Board of Preventive Medicine
(Certified Occupational Medicine Specialist). He is a member of Phi Beta Kappa
and Alpha Omega Alpha honor societies. Dr. Hall also holds a Masters degree in
International Management from the University of Maryland.
Jean-Paul Babey, an electronic engineer, is a graduate of Centrale School,
Lilles (France) 1979, and received an MBA at ISA, Paris (France) in 1981. After
having worked as a Consultant for 5 years, Mr. Babey has served as International
Director for Mondial Assistance Group (headquarters in Paris, France) since
April 1987. Additionally, Mr. Babey is the Managing Director of Mondial
Assistance UK Limited (London, England) since January 1993. Mr. Babey is also a
director of ASCI Incorporated (Ireland) and DIMA Incorporated (Netherlands).
1
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Robert P. Crabb, Secretary, joined the Company in 1998. Mr. Crabb has over
30 years of sales and marketing and public and private corporate management
experience, including 15 years with the Metropolitan Life Insurance Company
where he played an integral role in the company's development and implementation
of its marketing and training programs. His entrepreneurial expertise includes
marketing and financial consulting and commercial and residential real estate
development. Mr. Crabb serves as the Director of Corporate Development of the
Company and he is the Vice President of Marketing for Doc-Talk L.L.C. Mr. Crabb
studied Accounting and Finance at Benjamin Franklin University in Washington,
D.C. and Business Finance and Estate Planning at the University of North
Carolina.
Dale L. Hutchins, Ph.D., Executive Vice President, joined the Company in
1982. He also serves as the Chief Operating Officer of Doc-Talk L.L.C. He has 18
years of experience in management, operations, and marketing. Dr. Hutchins also
has considerable import, export, foreign product/capability representation, and
counter-trade experience. He holds a Ph.D. in business administration, as well
as varied medical certifications. He is active in a wide range of charitable,
industry, technology, and civic organizations.
Robert C. Snyder, Chief Financial Officer, joined the Company in May of
1996. Mr. Snyder has over 20 years of accounting experience working in the
private sector in Washington, D.C. His experience includes serving as senior
financial and administrative director for several rapid growth software R & D
companies and director of three Maryland based non-profit organizations. He
brings to the Company the talents necessary to provide for the successful and
controlled financial growth of the Company. Mr. Snyder has degrees from the
University of Maryland in Accounting, Business Administration and Economics.
Item 10. Executive Compensation.
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The Company's compensation policies for executive officers are to (i)
provide compensation packages, so as to attract, motivate and retain executives,
(ii) link a significant portion of compensation to financial results, so as to
reward successful performance, and (iii) provide long-term equity based
compensation, so as to further align the interests of executives with those of
the stockholders and further reward success and performance. The principal
components of the Company's executive compensation are base salary, incentive
compensation and stock options.
In determining compensation levels, the Company considers compensation
packages offered by similar sized companies within the health care industry.
Compensation levels for individual executive officers may be more or less than
those offered by such other companies, depending on a subjective assessment of
individual factors, such as the executive's position, skills, achievements,
tenure with the Company and historical compensation levels.
The Company has employment agreements with Thomas M. Hall, M.D., Ronald W.
Pickett, Dale L. Hutchins, Ph.D., and Robert C. Snyder. In addition, the Company
has a consulting agreement with Susquehanna Development Corporation, which is
wholly owned by Mr. Crabb.
Under the stock option plans established by the Company, stock options are
periodically granted to employees at the discretion of the Board of Directors or
Compensation Committee. It is contemplated that executives of the Company will
be eligible to receive stock option grants, subject to individual performance
and the performance of the Company as a whole.
2
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Summary Compensation Table
The following table sets forth certain information regarding the
compensation paid to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for services rendered in
all capacities for fiscal 1998, fiscal 1997 and fiscal 1996.
<TABLE>
<CAPTION>
Other Annual
Name and Principal Position Fiscal Year Salary Bonus Compensation
- ---------------------------- ------------ -------- ------------- --------------
<S> <C> <C> <C> <C>
Thomas M. Hall, M.D.,
M.I.M. 1998 $61,538 $110,231/(2)/ $83,260/(3)/
CEO and 1997 $50,000 $ 95,105/(2)/ $85,694/(3)/
Chief Physician/(1)/ 1996 $50,000 $ 65,135/(2)/ $87,625/(3)/
Ronald W. Pickett 1998 $86,538 -- --
Chairman of the Board, 1997 $50,000 -- --
President and Treasurer 1996 $50,000 -- --
Robert P. Crabb
Secretary 1998 $ 3,231 -- $36,175/(4)/
Dale L. Hutchins, Ph. D.
Executive Vice President 1998 $55,230 $ 8,077 --
Robert C. Snyder
Chief Financial Officer and 1998 $52,500 $ 5,000 --
Treasurer
</TABLE>
_________________________
(1) Prior to November 1, 1998, Dr. Hall also received income from the
Company as an independent contractor and independent commissioned
sales agent, as detailed in notes (2) and (3) below. Dr. Hall is
required to pay certain of his own business and travel expenses
related to this income.
(2) Received as an independent commissioned sales agent, representing a
percentage of the Company's gross sales of certain travel-related
medical advisory services. See "Item 12 - Certain Relationships and
Related Transactions."
(3) Received as an independent contractor through the Company's agreement
with Hall & Associates, P.A., under which Hall & Associates, P.A.
provides the Company with medical staff personnel. See "Item 12 -
Certain Relationships and Related Transactions."
(4) Received as an independent consultant to DocTalk, L.L.C. through
Susquehanna Development Corporation which is controlled by Mr. Crabb.
See "Item 12 - Certain Relationships and Related Transactions."
3
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No person (other than the Chief Executive Officer) who served as an
executive officer of the Company at the end of the fiscal year ended October 31,
1998 had total annual salary and bonus for that year in excess of $100,000. But
see "Item 12 - Certain Relationships and Related Transactions."
Directors who are not officers of the Company receive $250 for each meeting
of the Board of Directors or committee of the Board of Directors that they
attend. Officers of the Company do not receive additional compensation for
attending board meetings.
Employment Agreements
Dr. Hall, Mr. Pickett, Dr. Hutchins and Mr. Snyder have written employment
contracts with the Company. The terms of each are summarized below.
Dr. Hall's employment contract is for a 3-year term which commenced
November 1, 1998. Dr. Hall receives a salary of $260,000 for each Fiscal Year of
the Company during the term of the employment contract, and is eligible for
bonuses and benefits commensurate with the Company's internal policies. This
contract replaces a previous agreement whereby Dr. Hall received a salary plus
commission and contractor income.
Mr. Pickett's employment contract is for a 3-year term which commenced
November 1, 1998. Mr. Pickett receives a salary of $130,000 for each Fiscal Year
of the Company during the term of the employment contract, and is eligible for
bonuses and benefits commensurate with the Company's internal policies.
Dr. Hutchins' employment contract is for a 1-year term which commenced
November 1, 1998. Dr. Hutchins receives a salary of $70,000 for each Fiscal Year
of the Company during the term of the employment contract, and is eligible for
bonuses and benefits commensurate with the Company's internal policies.
Mr. Snyder's employment contract commenced May 6, 1996. Mr. Snyder receives
an annual salary of $55,000 plus a quarterly bonus of $1,250. Mr. Snyder is
eligible for other bonuses and benefits commensurate with the Company's internal
policies.
Retirement Plan
The Company has a 401(k) retirement plan for which all employees who have
served with the Company at least one year are eligible.
Stock Option Plans
The Company presently maintains the "June 23, 1993 Employee Stock Option
Plan" pursuant to which awards are made based on the Company's performance
during the prior Fiscal Year and upon the individual participants' performance
and achievement of certain goals.
Option Grants
The following table sets forth certain information concerning stock options
granted and not forfeited under the Employee Stock Option Plan during fiscal
1998 to Mr. Pickett, Mr. Hall and Mr. Crabb:
4
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Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Price
Appreciation for
Individual Grants Option Term
------------------------ -----------------------------
Percent of
Total Options
Granted to Option
Options Employees In Exercise Expiration
Name Granted Fiscal Year Price Date 5% 10%
------------------- -------- ------------- --------- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald W. Pickett -- -- -- -- -- --
Thomas M. Hall -- -- -- -- -- --
Robert P. Crabb 100,000 82.6% $.50 6/30/2001 $117,193 $160,976
</TABLE>
The following table sets forth certain information concerning the shares
acquired upon exercise of options, the number of unexercised options and the
value of unexercised options at the end of fiscal 1998 held by Mr. Pickett, Mr.
Hall and Mr. Crabb:
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values
<TABLE>
<CAPTION>
Number of
Unexercised Value of Unexercised
Options at Fiscal In-the-Money
Shares Year-End Options at Fiscal
Acquired on Value Exercisable/ Year-End
Name Exercise Realized Unexercisable Exercisable/Unexercisable
------------------- ---------------- -------------- ---------------------- -----------------------------
<S> <C> <C> <C> <C>
Ronald W. Pickett -- -- -- --
Thomas M. Hall -- -- 200,000/0 $162,000/0
Robert P. Crabb -- -- 100,000/0 $ 81,000/0
</TABLE>
For purposes of this table, the value of the Common Stock is $1.31 per
share, the last sales price of the Common Stock on October 31, 1998, as reported
on the NASDAQ Bulletin Board System.
Item 11. Security Ownership of Certain Beneficial Owners and
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Management.
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The following table sets forth as of December 31, 1998, certain information
with respect to the beneficial ownership of the Company's Common Stock (i) by
each person who is known by the Company
5
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to be the beneficial owner of more than five percent of the Common Stock, (ii)
by each director, (iii) by the Company's Chief Executive Officer and its four
most highly compensated executive officers and (iv) by all directors and
executive officers as a group.
<TABLE>
<CAPTION>
Shares of Percent of
Common Stock Common Stock
Beneficially Owned Owned
------------------ ------------
<S> <C> <C>
Thomas M. Hall, M.D., M.I.M. 1,182,750/(1)/ 29.42%
8050 Southern Maryland Boulevard
Owings, MD 20736
Ronald W. Pickett 637,568/(2)/ 16.69%
8050 Southern Maryland Boulevard
Owings, MD 20736
Jean-Paul Babey 305,378/(3)/ 7.99%
SACNAS International
2, rue Fragrant
Paris XVII, France
Robert P. Crabb 100,000/(4)/ 2.55%
583 Lombard Road
Rising Sun, MD 21911
Dale L. Hutchins, Ph.D. 68,111/(5)/ 1.76%
8050 Southern Maryland Boulevard
Owings, MD 20736
Robert C. Snyder 12,000/(6)/ 0.31%
8050 Southern Maryland Boulevard
Owings, MD 20736
All directors and executive officers 2,305,807 55.14%
as a group (6 individuals)
</TABLE>
____________________
(1) Includes immediately exercisable options to purchase 200,000 shares of
the Company's Common Stock at $.50 per share.
(2) Includes 304,678 shares of Common Stock owned by family members and
associates, and 332,890 shares beneficially owned by Ronald W. Pickett
and Cynthia P. Pickett (his spouse).
(3) Consists of 305,378 shares of Common Stock held in the name of SACNAS
International, as to which Mr. Babey shares voting power and
investment power, but of which Mr. Babey disclaims beneficial
ownership.
6
<PAGE>
(4) Consists of immediately exercisable options to purchase 100,000 shares
of the Company's Common Stock at $0.50 per share.
(5) Includes immediately exercisable options to purchase 50,000 shares of
the Company's common stock at $.50 per share.
(6) Consists of immediately exercisable options to purchase 12,000 shares
of the Company's common stock at $0.50 per share.
Item 12. Certain Relationships and Related Transactions
- ------- ----------------------------------------------
The Company has an agreement with Hall & Associates, P.A. (the "Hall
Agreement") to provide the Company with medical personnel as needed to staff its
maritime and international travel operations. The Company pays fees in equal
amounts every two-week pay period for personnel provided, plus reimbursement for
professional liability insurance, the direct costs of any extra physicians for
coverage of the call center, training costs and incidental expenses. The
agreement with Hall & Associates derives from a written agreement with the
predecessor of Hall & Associates, Vaillancourt Associates, P.A., which was
executed in 1982. The written agreement has been modified by oral agreement on
several occasions. Ronald W. Pickett, the Chairman, President and second largest
stockholder of the Company, is the Treasurer of Hall & Associates, but has no
direct or indirect financial interest in Hall & Associates. Thomas M. Hall,
M.D., M.I.M., who is the Chief Executive Officer of the Company and the largest
stockholder, is the sole owner of Hall & Associates, P.A. Pursuant to the Hall
Agreement, in Fiscal Year 1998, the Company paid $319,117.50 to Hall &
Associates, P.A. for services rendered.
On December 4, 1998, two new Professional Associations were created: Hall &
AmDoc Associates, P.A., and Hall & DocTalk Associates, P.A. The Company plans to
enter into agreements with these Professional Associations to provide medical
staffing for its programs with AmericasDoctor.com, Inc., and Doc-Talk, LLC,
respectively. Ronald W. Pickett, the Chairman, President and second largest
stockholder of the Company, is the Treasurer of Hall & AmDoc, Associates, P.A.,
and Hall & DocTalk Associates, P.A., but has no direct or indirect financial
interest in either Professional Association. Thomas M. Hall, M.D., M.I.M., who
is the Chief Executive Officer of the Company and the largest stockholder,
controls the two new professional associations.
The Company has an annually renewable marketing consulting agreement with
Susquehanna Development Corporation which is wholly owned by Robert Crabb, the
Secretary of the Company. The Company pays Susquehanna Development Corporation
an annual consulting fee of $98,400.
Item 13. Exhibits List and Reports on Form 8-K.
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(a) Exhibits:
The following exhibits are filed as part of this report:
Exhibit No. Description
- ----------- -----------
3.1 Restated Certificate of Incorporation, dated May 31, 1985
(incorporated herein by reference to Exhibit 1 to Form 8-A/A
filed on August 13, 1999).
7
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3.2 Certificate of Amendment of Certificate of Incorporation, dated
February 6, 1986 (incorporated hereby by reference to Exhibit 2 to
Form 8-A/A filed on August 13, 1999).
3.3 Certificate of Amendment of Certificate of Incorporation, dated
September 6, 1988 (incorporated hereby by reference to Exhibit 3 to
Form 8-A/A filed on August 13, 1999).
3.4 Certificate of Amendment of Certificate of Incorporation, dated
December 9, 1996 (incorporated herein by reference to Exhibit 4 to
Form 8-A/A filed on August 13, 1999).
3.5 Bylaws (incorporated herein by reference to Exhibit 5 to Form 8-A/A
filed on August 13, 1999).
10.1 Letter dated December 2, 1988 evidencing agreement between Medical
Advisory Systems, Inc. and Hall and Associates, P.A. with respect to
provision of medical services to Customers of Medical Advisory
Systems, Inc., filed as Exhibit 10(c) to Form 8 amending Annual Report
on Form 10-K on April 18, 1989.
10.2 Call Center Service Agreement, dated July 2, 1999 by and between
America's Doctor, Inc. and Medical Advisory Systems, Inc.
10.3 Addendum No. 1 to The Call Center Service Agreement, dated July 2,
1998, by and between America's Doctor, Inc. and Medical Advisory
Systems, Inc.
10.4 Addendum No. 2 to The Call Center Service Agreement, dated July 2,
1998, between America's Doctor, Inc. and Medical Advisory Systems,
Inc.
10.5+ Professional Personnel Services Agreement, dated December 11, 1998, by
and between Medical Advisory Systems, Inc. and Hall & Doc-Talk
Associates, P.A.
10.6+ Professional Personnel Services Agreement, dated December 11, 1998, by
and between Medical Advisory Systems, Inc. and Hall & Associates, P.A.
10.7+ Professional Personnel Services Agreement, dated December 11, 1998, by
and between Medical Advisory Systems, Inc. and Hall & Amdoc
Associates, P.A.
10.8+ Executive Employment Agreement, effective November 1, 1998, by and
between Medical Advisory Systems, Inc. and Ronald W. Pickett.
10.9+ Executive Employment Agreement, effective November 1, 1998, by and
between Medical Advisory Systems, Inc. and Thomas M. Hall, M.D.,
M.I.M.
8
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10.10+ Employment Agreement, dated August 13, 1997, between Medical Advisory
Systems, Inc. and Robert L. Snyder.
10.11+ Medical Advisory Systems, Inc. Stock Option Plan.
11.1* Statement regarding Computation of earnings or loss per share filed as
Exhibit 11 to Annual Report on Form 10-KSB on January 29, 1999.
21.1 Subsidiaries of the Company
______________________
* Previously filed
+ Management contract or compensatory plan or arrangement
(b) Current Reports on Form 8-K:
No report on Form 8-K was filed on behalf of the Company during the last
quarter of the period covered by this report.
9
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MEDICAL ADVISORY SYSTEMS, INC.
Date: August 27, 1999 By: /s/ Ronald W. Pickett
--------------- -----------------------------------------
Ronald W. Pickett
Chairman of the Board and President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date: August 27, 1999 By: /s/ Ronald W. Pickett
--------------- ----------------------------------
Ronald W. Pickett
Chairman of the Board
President
Date: August 27, 1999 By: /s/ Thomas M. Hall, M.D., M.I.M.
--------------- ----------------------------------
Thomas M. Hall, M.D., M.I.M.
Chief Executive Officer
Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Date: August 27, 1999 By: /s/ Robert P. Crabb
--------------- ----------------------------------
Robert P. Crabb
Director
10
<PAGE>
EXHIBITS INDEX
--------------
Exhibit No. Description of Exhibit
- ----------- ----------------------
3.1 Restated Certificate of Incorporation, dated May 31, 1985
(incorporated herein by reference to Exhibit 1 to Form 8-A/A
filed on August 13, 1999).
3.2 Certificate of Amendment of Certificate of Incorporation, dated
February 6, 1986 (incorporated hereby by reference to Exhibit 2
to Form 8-A/A filed on August 13, 1999).
3.3 Certificate of Amendment of Certificate of Incorporation, dated
September 6, 1988 (incorporated hereby by reference to Exhibit 3
to Form 8-A/A filed on August 13, 1999).
3.4 Certificate of Amendment of Certificate of Incorporation, dated
December 9, 1996 (incorporated herein by reference to Exhibit 4
to Form 8-A/A filed on August 13, 1999).
3.6 Bylaws (incorporated herein by reference to Exhibit 5 to Form 8-
A/A filed on August 13, 1999).
10.1 Letter dated December 2, 1988 evidencing agreement between
Medical Advisory Systems, Inc. and Hall and Associates, P.A. with
respect to provision of medical services to Customers of Medical
Advisory Systems, Inc., filed as Exhibit 10(c) to Form 8 amending
Annual Report on Form 10-K on April 18, 1989.
10.2 Call Center Service Agreement, dated July 2, 1999 by and between
America's Doctor, Inc. and Medical Advisory Systems, Inc.
10.3 Addendum No. 1 to The Call Center Service Agreement, dated July
2, 1998, by and between America's Doctor, Inc. and Medical
Advisory Systems, Inc.
10.4 Addendum No. 2 to The Call Center Service Agreement, dated July
2, 1998, between America's Doctor, Inc. and Medical Advisory
Systems, Inc.
10.5+ Professional Personnel Services Agreement, dated December 11,
1998, by and between Medical Advisory Systems, Inc. and Hall &
Doc-Talk Associates, P.A.
10.6+ Professional Personnel Services Agreement, dated December 11,
1998, by and between Medical Advisory Systems, Inc. and Hall &
Associates, P.A.
10.7+ Professional Personnel Services Agreement, dated December 11,
1998, by and between Medical Advisory Systems, Inc. and Hall &
Amdoc Associates, P.A.
11
<PAGE>
10.8+ Executive Employment Agreement, effective November 1, 1998, by
and between Medical Advisory Systems, Inc. and Ronald W. Pickett.
10.9+ Executive Employment Agreement, effective November 1, 1998, by
and between Medical Advisory Systems, Inc. and Thomas M. Hall,
M.D., M.I.M.
10.10+ Employment Agreement, dated August 13, 1997, between Medical
Advisory Systems, Inc. and Robert L. Snyder.
10.11+ Medical Advisory Systems, Inc. Stock Option Plan.
11.1* Statement regarding Computation of earnings or loss per share
filed as Exhibit 11 to Annual Report on Form 10-KSB on January
29, 1999.
21.1 Subsidiaries of the Company
______________________
*Previously filed.
+ Management contract or compensatory plan or arrangement
12
<PAGE>
Exhibit 10.2
CALL CENTER SERVICE AGREEMENT
-----------------------------
This Call Center Service Agreement (the "Service Agreement") is made this
2nd day of July, 1998 (the "Effective Date") by and between America's Doctor,
Inc., a Delaware corporation ("AD") and Medical Advisory Systems, Inc., a
Delaware corporation ("MAS").
RECITALS
--------
WHEREAS, AD is a company formed to implement real-time medical information
and related services via the Internet; and
WHEREAS, AD will provide its services to its users through Physicians and
other health staff located at one or more call center(s) (the "Call Center");
and
WHEREAS, AD does not and will not engage in the practice of medicine; and
WHEREAS, MAS is a company headquartered at 8050 Southern Maryland
Boulevard, Owings, Maryland 20736 (the "MAS Office") providing medical
assistance products and services twenty-four hours (24) a day utilizing a
worldwide telecommunications system; and
WHEREAS, MAS will operate the AD Call Center in a manner such that neither
MAS nor AD will engage in the practice of medicine; and
WHEREAS, MAS has agreed to purchase Fifty Thousand (50,000) shares of
common stock of AD (the "MAS Stock") pursuant to the terms of a Stock Purchase
Agreement of even date herewith; and
WHEREAS, in consideration for the MAS Stock, MAS has agreed to pay AD the
sum of One Million Dollars ($1,000,000) (the "Stock Purchase Price"); and
1
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WHEREAS, the Stock Purchase Price shall be paid by MAS to AD by way of
credits for services rendered, certain assets purchased by MAS and cash payments
by MAS to AD pursuant to this Service Agreement; and
WHEREAS, AD has agreed to promote MAS's core programs and core lines of
business, including its 800 Series and 900 voice telephone service, on AD's site
on America Online ("AOL").
NOW THEREFORE, in consideration of the foregoing recitals and the promises
and the consideration set forth herein, AD and MAS hereby agree as follows:
1. Incorporation of Recitals. The foregoing recitals are incorporated as
-------------------------
part of this Service Agreement as if set forth fully herein.
2. Term.
----
(a) The term of this Service Agreement shall be for two (2) years (the
"Initial Term") commencing on the Effective Date. At the conclusion of the
Initial Term, unless either party hereto gives notice of termination as provided
in Section 2(b) below, the Service Agreement shall automatically renew for a
term of one (1) year (the "Renewal Term"). At the conclusion of the Renewal
Term, unless either party hereto gives notice of termination as provided in
Section 2(b) below, the Service Agreement shall automatically renew for a term
of two (2) years (the "Extended Term").
(b) Either party to this Service Agreement may terminate the Service
Agreement without cause by providing written notice of termination not less than
ninety (90) days prior to the expiration of the Initial Term, the Renewal Term
or the Extended Term.
3. Exclusivity. During the Term of this Service Agreement, or unless
-----------
other-wise agreed to by MAS, during the term of this Service Agreement, MAS
shall be the exclusive provider of Call Center services to AD.
2
<PAGE>
4. Goals and Objectives. AD and MAS agree that the goals and objectives to
--------------------
be achieved through this Service Agreement are as follows:
(a) Create and operate a twenty-four (24) hour a day three hundred sixty-
five (365) a day year Call Center to service the needs of AD's users;
(b) Establish and maintain high quality services for AD's users;
(c) Commence operations of the Call Center in a timely manner as set forth
in AD's Business Plan;
(d) Provide and maintain AD's Call Center services within the budget for
such services set forth in AD's Business Plan;
(e) Respond to a minimum of thirty thousand (30,000) AD user transactions
in the first month of operation of the Call Center, with monthly increases
pursuant to AD's Business Plan or actual usage, whichever is greater;
(f) Minimize wait time for AD's users;
(g) Respond to each user's questions timely, accurately and completely; and
(h) Staff the Call Center with qualified Board Eligible/Board Certified
Physicians and other qualified health care professionals;
(i) Training Call Center Physicians and other health care professionals to
respond to a minimum of eight (8) user inquiries per hour.
5. MAS Responsibilities. MAS shall use reasonable business efforts to
----------------------
provide and maintain the following goods and services in a timely, efficient and
effective manner:
(a) Installation of fifteen (15) work stations. MAS shall purchase and
maintain all of the furnishings, computer equipment, connections, communication
lines, service, software (other than software being developed by The Brook
Group). MAS shall further purchase the server(s) and other
3
<PAGE>
equipment necessary to operate the Call Center. MAS shall comply with all of the
specifications set forth in the proposal by Management Works attached to this
Service Agreement as Exhibit A (the "Specification"). The Specifications may be
modified by AD provided that such modification(s) do(es) not increase the cost
to MAS of fulfilling the Specifications. AD shall provide MAS with any such
modifications prior to MAS ordering any item in the Specifications. MAS, with
AD's consent, may modify the Specifications provided that any such
modification(s) provide for matching equivalent specifications sufficient to
fulfill AD's needs for the project;
(b) Recruit and hire a sufficient number of Board Eligible/Board Certified
Physicians (the "Physicians") as per the Business Plan, as well as other
qualified professionals, such as dieticians, nurses, etc. (the "Health Staff')
to staff and service the Call Center in a manner allowing AD to accurately
respond to its users' requests in a timely manner;
(c) Develop a training program for and train the Physicians and the Health
Staff;
(d) Provide twenty-four (24) hour supervision of the Physicians and the
Health Staff;
(e) Provide AD with spillover access to physicians employed by MAS who
primarily provide services for MAS core business operations (the "MAS
Physicians") to assist with the AD Call Center;
(f) Provide the AD Call Center Physicians and Health Staff with access to
MAS's health care reference data bases and other resource materials;
(g) Enter into a joint venture with AD for the purpose of the marketing and
sales of MAS's premium services to corporations, insurance companies, HMO's,
medical institutions, sophisticated medical consumers and medically troubled
populations.
(h) Provide such other services and resources as are necessary to operate
the Call Center in an efficient and effective manner.
4
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6. Physician and Health Staff Recruitment and Hiring. Immediately upon the
-------------------------------------------------
execution of this Service Agreement, MAS shall commence recruiting and hiring
the Physicians and Health Staff necessary to adequately staff the AD Call
Center. Unless otherwise directed by AD in accordance with Section 23(b) herein,
the Physicians and Health Staff shall be hired as independent contractors by MAS
or an MAS subsidiary or affiliate. MAS shall require all Physicians and Health
Staff to sign a contract containing a non-competition clause restricting the
Physicians and Health Staff from working for another online medical information
service in competition with AD. In addition to the non-competition provision,
the contract between MAS and the Physicians and Health Staff shall contain
provisions requiring the Physicians and Health Staff to comply with the
procedures and protocols which shall be developed by AD and implemented by MAS.
MAS may pay Physicians up to $60.00 per hour, exclusive of any benefits and
other payroll costs. If MAS wishes to pay a Physician more than $60.00 per hour,
MAS must first obtain the approval of AD, which approval shall not be
unreasonably withheld. MAS shall obtain approval from AD for the hourly rates to
be paid to the Health Staff. Such approval shall not be unreasonably withheld.
7. Training. MAS shall design and administer a program to train the AD Call
--------
Center Physicians and Health Staff. This training program shall be approved by
AD. In addition to the initial training, MAS shall provide AD Call Center
Physicians and Health Staff with ongoing continuing education and training. The
content and frequency of the ongoing training shall be agreed upon by AD and
MAS.
8. Online Service/Equipment Issues. MAS agrees that if AD suffers an
-------------------------------
interruption in service as a result of any equipment failure or other problem
attributable to the Call Center, MAS shall provide AD with an assessment
evaluation within fifteen (15) minutes of the system failure,
5
<PAGE>
and a full evaluation within thirty (30) minutes of the system failure. MAS
shall notify an AD designee within fifteen (15) minutes of any system failure.
9. Backup/Redundancy Plan. MAS shall implement the backup/redundancy plan
----------------------
agreed to between AD and MAS.
10. MAS Report Data Delivery.
------------------------
MAS shall provide such reports and data reasonably requested by AD.
Such reports and data shall include, but not be limited to: Call Center usage;
user wait time; response time; and zip code specific usership reports. MAS shall
provide such reports and data to AD upon request by a designated AD
representative.
11. Ownership of Equipment/ Risk of Loss.
------------------------------------
(a) All equipment, including connections, furnishings and software
purchased by MAS for the AD Call Center (the "Equipment") pursuant to this
Service Agreement shall be titled in the name of and owned by AD. MAS shall
provide AD with written documentation specifying the Equipment purchased and
containing proof of payment. Any additional furnishings and equipment purchased
by MAS for the AD Call Center shall be owned by MAS unless by agreement, AD
shall reimburse MAS for such furnishings and equipment in which event such
furnishings and equipment shall become part of the Equipment. The term Equipment
also includes any equipment, including connections, furnishings and software
purchased directly by AD and placed at the AD Call Center. All of the Equipment
shall be clearly labeled as owned by AD and MAS shall maintain a complete and
up-to-date lists of all of the Equipment.
(b) AD shall bear the risk of loss for damage to the Equipment, except
however, if such damage is caused by the gross negligence or willful neglect of
MAS, then, in such event, MAS shall bear the risk of loss.
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12. Call Center Start-up. For purposes of this Service Agreement, the
--------------------
start-up date for the Call Center shall be two (2) weeks prior to the soft
launch of the AD service, pursuant to AD's contract with AOL. The period from
the Effective Date through the Start-up Date shall be referred to herein as the
"Pre-Start-up Period." The period after the Start-up Date shall be referred to
herein as the "Post-Start-up Period.
13. Credit Against Stock Purchase Price.
-----------------------------------
(a) In consideration for the services enumerated below, which shall be
performed during the Pre-Start-Up Period, MAS shall receive as a credit against
the Stock Purchase Price the total sum of $360,000.
<TABLE>
<CAPTION>
Service Credit
<S> <C>
(i) May and June Rent ($5,000 per month) $ 10,000
(ii) Installation of fifteen (15) Work Stations, including but not
limited to, workstations, furniture, server(s), communication
connectors and software per Management Works specifications $200,000
(iii) Hiring and Start-up training of Physicians, Health Staff and
Supervisors (not including the actual cost of salaries, which
shall be treated in accordance with Sections 15 and 16 herein) $ 60,000
(iv) MAS Management Salaries $ 60,000
(v) Benefits on Management Salaries $ 15,000
(vi) Systems Coordination, Hardware and Generator $ 15,000
Total: $360,000
</TABLE>
(b) If the cost of providing the fifteen (15) Work Stations and related
Equipment and connections exceeds the projected cost as set forth in the
Management Work Specifications, MAS
7
<PAGE>
shall receive additional credit against the Stock Purchase Price for each dollar
the actual cost exceeds the total Management Works projected cost.
14. Payment Against The Stock Purchase Price And Issuance of the MAS Stock.
-----------------------------------------------------------------------
(a) MAS shall make total cash payments of Six Hundred Forty Thousand
Dollars ($640,000) against the Stock Purchase as follows: (i) commencing seven
(7) days from the date on which AD shall first pay a MAS monthly invoice in
accordance with Section 16 below (the "Initial MAS Payment Date"), and on the
7th day following the date on which AD pays each MAS monthly invoice for each of
ten (10) successive months following the Initial MAS Payment Date, MAS shall pay
AD the sum of Fifty Three Thousand Three Hundred Twenty Dollars ($53,320.00);
and (ii) on the 7th day following the date on which AD pays the monthly invoice
for the eleventh (11 th) month following the Initial MAS Payment Date, MAS shall
pay AD the sum of Fifty Three Thousand Four Hundred Eighty Dollars ($53,480.00).
(b) Provided MAS has fully performed in accordance with Section 13(a)
herein, upon the Start-up Date, AD shall issue MAS the total of Eighteen
Thousand (18,000) shares of the MAS Stock.
(c) AD shall issue to MAS Two Thousand Six Hundred Sixty Six (2,666) shares
of the MAS Stock upon receipt by AD of each payment of Fifty Three Thousand
Three Hundred Twenty Dollars ($53,320.00) in accordance with Section 14(a)
herein.
(d) AD shall issue to MAS Two Thousand Six Hundred Seventy Four (2,674)
shares of the MAS Stock upon receipt by AD of the final payment of Fifty Three
Thousand Four Hundred Eighty Dollars ($53,480.00) in accordance with Section
14(a) herein.
8
<PAGE>
15. Post Start-up Period Management. During the Post Start-up Period MAS
---------------------------------
shall provide Call Center management oversight such that AD shall be able to
fill the following positions at a cost less than projected in the AD Business
Plan (as defined in the MAS Stock Purchase Agreement):
(a) Vice President of Information Technology;
(b) Vice President of Health Services;
(c) Director of Provider Education; and
(d) Administrator/Coordinator
16. MAS Billing.
(a) MAS shall bill AD monthly for services provided AD under the terms of
this Service Agreement, including the services provided pursuant to Section 6
herein. Subject to Section 16(f) below, payment shall be due ten (10) days after
receipt of MAS's invoice by AD. When MAS's total monthly bills to AD exceed Two
Hundred Thousand Dollars ($200,000), MAS may, at its option, bill AD every two
(2) weeks. Subject to Section 16(f) below, payment shall be due within ten (10)
days of AD's receipt of each biweekly billing statement.
(b) MAS shall charge AD, MAS's actual cost plus ten percent (10%), but in
no event less than Twenty Six Thousand Dollars ($26,000) per month, for
Physicians, other Health Staff and Supervisory Personnel. Upon the earlier to
occur of, (i) AD being profitable on a cash basis for three (3) consecutive
months; or (ii) the tenth (10th) month after the Effective Date, MAS may
increase its charge to AD for Physicians and Health Staff to its actual cost
plus twenty percent (20%), but in no event less than Twenty Six Thousand Dollars
($26,000) per month. Provided, however, that pursuant to Section 25 herein, if
MAS is permitted by AD, pursuant to Section 25 herein, to contribute an
additional Five Hundred Thousand ($500,000) of ongoing operation and management
services in exchange for additional common stock in AD at a valuation to be
determined by AD,
9
<PAGE>
MAS shall continue to charge its actual cost plus ten percent (10%), but in no
event less than Twenty Six Thousand Dollars ($26,000) per month, until such
additional investment is fully paid by MAS, during the Term of this Service
Agreement, including any extensions thereof.
(c) If MAS purchases additional equipment for the Call Center with AD's
consent, MAS may bill AD for the actual cost of such equipment.
(d) MAS may bill AD for the actual cost of expenses such as overnight
deliveries, postage, long distance telephone charges, facsimiles and
miscellaneous office supplies, such as pencils, pens, paper, etc.
(e) Except for Post Start-up Period rent charges ($5,000 per month), MAS
shall not bill AD for any general overhead expenses including, but not limited
to, electric charges, building maintenance and local telephone charges.
(f) AD shall prepay MAS's payroll for Physicians, Health Staff and
Supervisory Personnel pursuant to the following procedure: not less than seventy
two (72) hours prior to the date payroll -checks are to be distributed, MAS
shall provide AD, in writing, the amount of the payroll; (ii) not less than
twenty four (24) hours prior to the date payroll checks are to be distributed,
AD shall transfer to MAS an amount sufficient to pay the payroll. AD's failure
to prepay the payroll in accordance with this Section 16(f) shall constitute a
breach of this Service Agreement by AD.
17. Additional Locations.
--------------------
(a) In the event MAS is unable to adequately staff all of AD's Call Center
needs at the MAS Office location, AD shall open additional call centers at other
locations.
(b) MAS shall have the responsibility for recruiting, training and
supervising Physicians and Health Staff at any such additional location.
10
<PAGE>
(c) AD and MAS shall mutually agree upon any additional costs (including
costs of additional supervisory personnel) MAS may incur in its operation of
additional Call Center locations. MAS shall charge AD in accordance with Section
16 above for any such additional costs.
18. Noncompetition.
--------------
(a) During the term of this Service Agreement and provided that MAS is not
in default hereunder, MAS has the exclusive right to provide Call Center
services to AD, and AD shall not operate any competing Call Center.
(b) During the term of this Service Agreement and for a period of one (1)
year after the termination of this Service Agreement, AD shall not compete with
MAS in any of MAS's core business activities, including specifically, MAS's "800
Series" and "900" voice/telephone services.
(c) During the term of this Service Agreement, and for a period of one (1)
year after the termination of this Service Agreement, MAS shall not compete with
AD by providing real time medical information and related services via the
Internet.
(d) In the event this Service Agreement is terminated for any reason, AD
may contract with or employ the Physicians and Health Staff dedicated primarily
to the AD Call Center. In no event shall AD recruit, contract with or employ any
member of MAS's staff, including MAS Physicians, not dedicated primarily to the
AD Call Center.
19. MAS Standard of Care. MAS shall use reasonable business efforts to
--------------------
operate the Call Center efficiently and effectively and to comply with all of
the protocols and procedures agreed to between AD and MAS. MAS shall take care
to ensure that the Physicians and Health Staff comply with AD's protocols and
procedures such that AD does not engage in the practice of medicine or any other
health related field. MAS has not violated its standard of care pursuant to this
Section 19 if it complies with all of the protocols and procedures agreed to
between AD and MAS but
11
<PAGE>
nevertheless, a Physician(s) or member(s) of the Health Staff is/are found to
have engaged in the practice of medicine or some other health related field.
20. Indemnification. AD hereby agrees to indemnify, hold harmless and
---------------
defend MAS, the Physicians and/or the Health Staff from and against any and all
claims of any nature whatsoever arising directly from the operation of the Call
Center brought against MAS, any Physician or member of the Health Staff provided
that there is no finding that MAS, the Physicians and/or the Health Staff have
not complied with all of the protocols and procedures for operating the Call
Center agreed to between MAS and AD. AD shall maintain general liability
business insurance with coverage limits of $1,000,000 per occurrence and
$3,000,000 in the aggregate.
21. Operations Committee: Operational Criteria. During the term of this
------------------------------------------
Service Agreement, the Board of Directors of AD shall appoint a Call Center
Operations Committee (the "Operations Committee") consisting of three (3)
members. The Operations Committee shall be composed of Scott Rifkin, the PRWW
Board Representative and the MAS Board Representative. The Operations Committee
shall establish reasonable performance criteria that MAS must comply with under
this Service Agreement (the "Performance Criteria"). The Performance Criteria
shall change from timeto-time. The Operations Committee shall present proposed
Performance Criteria to MAS in writing, and MAS shall have five (5) business
days to comment upon the proposed Performance Criteria. Within five (5) business
days of MAS's response to the proposed Performance Criteria, the Operations
Committee shall present MAS with the written Performance Criteria with which MAS
shall comply until such time as the Operations Committee amends or modifies the
performance criteria.
12
<PAGE>
22. Default by MAS.
--------------
(a) The failure of MAS to comply with any of the terms of this Service
Agreement including, but not limited to, the failure to comply with the
Performance Criteria, described in Section 21 above, shall constitute a breach
of the Service Agreement by MAS. MAS shall be deemed to have failed to comply
with the Performance Criteria if two (2) of the three (3) members of the
Operations Committee determine that there is noncompliance. In such event, the
Operations Committee shall give MAS written notice of such noncompliance, which
written notice shall specify the nature of such noncompliance (the "Notice of
Noncompliance"). MAS shall have fifteen (15) days after receipt of the Notice of
Noncompliance to cure such noncompliance. If two (2) of the three (3) members of
the Operations Committee determine that MAS has failed to cure in accordance
with the Notice of Noncompliance, the Operations Committee shall so notify MAS
in writing and MAS shall be in breach of this Service Agreement.
(b) Upon MAS's breach of this Service Agreement, this Service Agreement
shall automatically terminate. Upon termination, AD may, at its sole option,
take any or all of the following actions:
(i) Subject to Section 29 herein, pursue any and all remedies
available by law including damages;
(ii) Take possession of all Call Center Equipment owned by AD
pursuant to Section 22(d) below;
(iii) In accordance with and subject to the provisions of
Section 18(d), contract with or employ the Physicians and/or
Health Staff; and
(iv) Take any and all other actions AD deems in its best
interest to facilitate the continued operation of the AD Call
Center.
13
<PAGE>
(c) Upon termination, AD shall promptly deliver to MAS the balance of any
shares paid for and due MAS pursuant to Section 14 herein.
(d) Upon the termination of this Service Agreement, MAS shall have the
right to purchase the balance of the MAS Stock then unpaid for by paying the
remaining balance of the Stock Purchase Price to AD in cash within thirty (30)
days of the termination of the Service Agreement. Upon payment by MAS of the
balance of the Stock Purchase Price, AD shall promptly deliver the balance of
the MAS Stock to MAS.
(e) Upon termination of this Service Agreement, MAS shall cooperate with AD
in order to effect an orderly transition of the Call Center from MAS to AD or
AD's designee. MAS shall continue to operate the Call Center for a period of
thirty (30) days after termination. MAS shall surrender and turnover the AD Call
Center Equipment within such thirty (30) day period. If MAS fails to turnover
the Equipment in a timely manner, then AD or its designee may enter the MAS
Office and remove the AD Call Center Equipment. AD shall take care to remove the
Equipment in a manner which will cause the least disruption to MAS's core
business services.
(f) In the event AD wrongfully terminates or otherwise breaches this
Service Agreement, subject to Section 29 herein, MAS may pursue any and all
remedies available by law including seeking damages.
23. Independent Contractors.
------------------------
(a) In the event that any State or Federal taxing authority asserts that
the Physicians and/or Health Staff are employees of MAS (or an MAS subsidiary or
affiliate), MAS shall immediately so notify AD in writing. AD may, in its
discretion, participate in any negotiation or litigation with such taxing
authority. If AD wishes to challenge the taxing authority, AD shall be
responsible for the costs of such challenge, including any costs incurred by
MAS. If it is determined that the
14
<PAGE>
Physicians and/or Health Staff are employees and not independent contractors, AD
shall be responsible to reimburse MAS and pay for any payroll withholding or
other taxes associated with the employment of the Physicians and/or Health
Staff.
(b) AD, in its sole discretion, may require MAS to treat the Physician
and/or Health Staff as employees rather than independent contractors. In such
event, AD shall pre-pay, pursuant to Section 16(f) herein, all sums required to
comply with state and federal withholding obligations.
24. AD Responsibilities to MAS.
--------------------------
(a) In addition to all of AD's obligations set forth above, AD shall do the
following:
(i) Jointly develop a program with MAS to promote and market
at no cost to MAS, MAS's core programs and lines of business on
AD's site on AOL;
(ii) Participate in the marketing of MAS's 800 Series telephone
product so long as such participation results in no financial
costs to AD, is limited to the referral of AD users to the MAS
800 Series telephone service, and is determined by AD's Board as
not being detrimental to AD;
(iii) Provide direct links from the AD site on AOL to MAS's
website(s);
(iv) Include the MAS sponsored Doc-Talk, LLC. 800 Series
telephone service in its banner advertisement cycle on the AD
main page at no cost to MAS;
(v) Enter into a joint venture with MAS for the purpose of the
marketing and sales of MAS's premium services to corporations,
insurance companies, HMO's, medical institutions, sophisticated
medical consumers and medically troubled populations; and
(vi) Analyze with MAS and, if feasible, pursue the marketing and
sales of MAS's premium services in international markets.
15
<PAGE>
25. Additional Stock Purchase by MAS. AD, in its sole and absolute
--------------------------------
discretion, may request MAS to contribute up to an additional Five Hundred
Thousand Dollars ($500,000) of ongoing services in accordance with the terms of
this Service Agreement (the "Additional Services") in exchange for additional
common stock in AD (the "Additional MAS Stock"). The valuation of the Additional
MAS Stock shall be set by the AD Board of Directors. MAS, in its sole and
absolute discretion, may agree to perform the Additional Services, or may
decline to do so.
26. Eligibility for AD Stock Options. To the extent permitted by law and
--------------------------------
the corporate Bylaws of AD, the MAS Supervisory Personnel, the Physicians and
the Health Staff shall be eligible for the AD employer stock option plan, at the
sole and absolute discretion of the AD Board and Compensation Committee.
27. Representations, Warranties and Disclaimers.
-------------------------------------------
(a) AD is a corporation duly incorporated under the laws of the State of
Delaware and is authorized to enter into this Service Agreement.
(b) MAS is a corporation duly incorporated under the laws of the State of
Delaware and is authorized to enter into this Service Agreement.
(c) The parties hereto understand and agree that Doc-Talk, LLC is an
affiliate of MAS which has been formed for the purpose of marketing premium
medical services telephonically and via the Internet.
(d) Except as specifically provided herein, this Service Agreement does not
constitute a joint venture between MAS and AD.
28. Force Majeure. Neither party hereunder shall be liable to the other for
-------------
any failure or delay in performance, of its obligations under this Service
Agreement due to causes beyond the reasonable control of the party in question
such as governmental action or rioting, civil commotion,
16
<PAGE>
fire, flood, epidemic or other act of God. Performance of the contractual
obligation which has been delayed by the force majeure shall be deemed suspended
only for a period equal to the delay caused by such event.
29. Arbitration and Governing Law.
-----------------------------
(a) This Service Agreement shall be governed and construed in accordance
with the laws of the State of Maryland.
(b) In the event the parties have any material dispute under this Service
Agreement, the parties hereby agree to submit any such dispute to binding
arbitration in the State of Maryland.
30. Assignment.
----------
(a) MAS may not assign this Service Agreement or any of its obligations and
rights under this Service Agreement to any party without the express written
consent of AD.
(b) AD may assign its rights and obligations under this Service Agreement
to a third party provided such third party agrees to comply with all of the
terms of this Service Agreement.
31. Notices. All notices and demands required or permitted to be given by
either party to the other under this Service Agreement shall be in writing, sent
certified mail, return receipt requested, postage prepaid, or by Federal Express
or other reputable overnight courier service, or by hand delivery and shall be
deemed to have been received upon hand delivery, or one (1) business day
following deposit with Federal Express or other reputable overnight courier
service, or three (3) days following deposit in the U.S. Mail if sent by
certified mail to the address shown below or to such other address as either
party may designate by notice to the other.
Medical Advisory Systems, Inc.
8050 Southern Maryland Boulevard
Owings, Maryland 20736
17
<PAGE>
America's Doctor, Inc.
11403 Cronridge Drive
Suite 200
Owings Mills, Maryland 21117
32. Amendment of the Service Agreement. No amendment of this Service
----------------------------------
Agreement shall be valid and binding unless set forth in writing and duly
executed by all of the parties hereto.
33. Severability. Any provision of this Service Agreement which shall prove
------------
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
effect.
(CONTINUED ON NEXT PAGE)
18
<PAGE>
AMERICA'S DOCTOR, INC.
By: /s/ Scott Rifkin, M.D.
------------------------
Scott Rifkin, M.D.
Its: Chairman
MEDICAL ADVISORY SYSTEMS, INC.
By: /s/ Ronald Pickett
------------------
Ronald Pickett
Its: President
READ and AGREED:
Premier Research Worldwide
By: /s/ Fred Powell
-------------------------------
Fred Powell
Its: Chief Financial Officer
19
<PAGE>
Exhibit 10.3
ADDENDUM NUMBER ONE To
THE CALL CENTER SERVICE AGREEMENT
Dated July 2,1998, by and between America's Doctor, Inc.
And Medical Advisory Systems, Inc.
THIS ADDENDUM NUMBER ONE TO THE CALL CENTER SERVICE,
AGREEMENT, dated July 2,1998, between America's Doctor, Inc. and Medical
Advisory Systems, Inc. (the "Addendum No, 1") is effective this 30th day of
October 1998 (the "Effective Date), by and between America's Doctor Inc. a
Delaware Corporation ("AD" or the "Company") and Medical Advisory Systems, Inc.
a Delaware Corporation ("MAS").
WHEREAS, AD is a company headquartered at 11403 Cronridge Drive, Suite 200,
Owings Mills, Maryland 21117, formed to implement real-time medical information
and related services via the Internet; and
WHEREAS, MAS is a company headquartered at 8050 Southern Maryland
Boulevard, Owings, Maryland 20736 (the "MAS Office"), providing medical
assistance products and services twenty-four hours (24) a day, utilizing a
worldwide telecommunications system; and
WHEREAS, MAS purchased Fifty Thousand (50,000) shares of Common Stock of AD
pursuant to the terms of a Common Stock Purchase Agreement among America's
Doctor, Inc., Medical Advisory Systems, Inc., and Premier Research Worldwide,
Ltd. dated July 2, 1998 (the "Stock Purchase Agreement"); and
WHEREAS, as a part of and appended to the Stock Purchase Agreement, AD and
MAS entered into a Call Center Service Agreement, dated July 2,1998 (the "Call
Center Agreement") which outlined the terms of MAS operation of AD's Call Center
(as that term is defined in the Call Center Agreement) from the MAS Office; and
WHEREAS, MAS is currently operating the AD Call Center from the MAS Office
and is in compliance with the terms of the Call Center Agreement; and
WHEREAS, MAS purchased an additional Forty Thousand (40,000) shares of
Common Stock of AD pursuant to the terms of a Subscription Agreement dated
October 30, 1998 (the "Subscription Agreement"); and
WHEREAS, the parties wish to clarify and modify certain terms of the Call
Center Agreement:
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
<PAGE>
1. The foregoing recitals are incorporated as part of this Addendum No. 1
as if fully set forth herein.
2. This Addendum No. 1 hereby amends and replaces Section 2(b) of the
Call Center Agreement in its entirety and inserts the following language:
"MAS may terminate this Service Agreement 'for cause' by providing AD
with at least (90) days written notice of termination. For purposes of this
Section, 'for cause' shall mean AD's failure to:
(i) pay any and all sums due MAS pursuant to Section 16 herein
within thirty (30) days of such sums being due and payable; or
(ii) timely pay sums due MAS pursuant to Section 16 herein for three
(3) consecutive months.
In the event MAS terminates this Service Agreement 'for cause,' MAS
shall cooperate with AD in order to effect an orderly transition of the Call
Center from MAS to AD or AD's designee (the "Transition Period"). MAS shall
surrender and runover the AD Call Center Equipment during the Transition Period.
If MAS fails to turnover the AD Call Center Equipment in a timely manner, then
AD or its designee may enter the MAS Office and remove the AD Call Center
Equipment. AD shall take care to remove the AD Call Center Equipment in a manner
which will cause the least disruption to MAS' core business services."
3. This Addendum No. 1 hereby modifies Section 20 of the Call Center
Agreement to reflect that AD shall maintain general liability business insurance
with coverage limits of $2,000,000 per occurrence and $6,000,000 in the
aggregate. In addition, AD will make reasonable business efforts to have MAS
named as an additional assured.
4. This Addendum No. 1 hereby amends and replaces Section 22(d) of the
Call Center Agreement in its entirety and inserts the following language:
"(d) Upon the termination of this Service Agreement MAS shall have the
right to purchase the balance of the MAS Stock then unpaid for by paying the
remaining balance of the Stock Purchase Price to AD in cash within one hundred
and twenty (120) days of the termination of the Service Agreement. Upon payment
by MAS of the balance of the Stock Purchase Price, AD shall promptly deliver the
balance of the MAS Stock to MAS."
5. This Addendum No. 1 hereby amends and modifies Section 20 of the Call
Center Agreement to insert the following language:
"(c) In the event MAS reasonably incurs an increase in its malpractice
insurance coverage, over and above MAS' current premium payment of
$22,000 per annum for the employment of the Physicians and Health
Staff (the "Insurance Premium") AD will reimburse MAS for any such
overage of the Insurance Premium."
6. This Addendum No. 1 hereby modifies Section 25 of the Call Center
Agreement to reflect that MAS' purchase of Common Stock of AD pursuant to the
Subscription Agreement dated October 30, 1998, shall not affect AD's ability to
request that MAS contribute Additional Services (as that term is defined in the
Call Center Agreement) in exchange for Additional MAS Stock (as that term is
defined in the Call Center Agreement).
<PAGE>
7. All other terms and conditions of the Call Center Agreement shall
remain in full force and effect.
8. This Addendum No. 1 shall be governed by and construed in accordance
with the laws of the State of Maryland without regard to its conflict of laws
principles.
9. This Addendum No. 1 shall be binding upon the parties hereto and their
respective successors and assigns, but this shall not be deemed to permit any
assignment not permitted pursuant to the Call Center Agreement.
10. In the event the parties have any material dispute under this Addendum
No. 1, the parties hereby agree to submit any such dispute to binding
arbitration in the State of Maryland.
11. Any provision of this Addendum No. 1 which shall prove to be invalid,
void or illegal shall in no way affect, impair or invalidate any other provision
hereof and such other provision shall remain in full force and effect.
(CONTINUED NEXT PAGE)
<PAGE>
IN WITNESS WHERE0F, the parties have executed this Addendum No. 1 as of the
day and year first above written.
ATTEST AMERICA'S DOCTOR, INC.
By. /s/ Scott Rifkin, M.D.
----------------------------------
Name: Scott Rifkin, M.D.
President
ATTEST MEDICAL ADVISORY SYSTEMS, NC.
/s/ Ronald Pickett
----------------------------------
Name: Ronald Pickett
Its: President
READ AND AGREED TO:
PREMIER RESEARCH WORLDWIDE, LTD.
By: /s/ Joel Morganroth M.D.
------------------------
Name: Joel Morganroth M.D.
Its: President
<PAGE>
Exhibit 10.4
ADDENDUM NO. 2 TO
THE CALL CENTER SERVICE AGREEMENT,
dated January 29, 1999, by and between America's Doctor, Inc.
and Medical Advisory Systems, Inc.
THIS ADDENDUM NO. 2 to The Call Center Service Agreement, dated July 2,
1998, between America's Doctor, Inc. and Medical Advisory Systems, Inc. (the
"Addendum No, 2") is effective - day of January, 1999 (the "Effective Date"), by
and between America's Doctor, Inc., a Delaware Corporation ("AD") or the
"Company") and Medical Advisory Systems, Inc., a Delaware Corporation ("MAS")
WHEREAS, AD is a company headquartered at 11403 Cronridge Drive, Suite 200,
Owings Mills, Maryland 21117, formed to implement real time medical information
and related services via the Internet; and
WHEREAS, MAS is a company headquartered at 8050 Southern Maryland
Boulevard, Owings, Maryland 20736 (the "MAS Office"), providing medical
assistance products and services twenty-four hours (24) a day, utilizing a
worldwide telecommunications system; and
WHEREAS, AD and MAS entered into a Call Center Service Agreement, dated
July 2, 1998 (the "Original Call Center Agreement") which outlined the terms of
MAS operation of AD's Call Center (as that term is defined in the Original Call
Center Agreement) from the MAS Office, which Original Call Center Agreement was
amended and clarified, pursuant to the provisions of Addendum Number One to the
Call Center Agreement, effective October 30, 1998, by and between AD and MAS
("Addendum No. 1), and
WHEREAS, MAS is currently operating the AD Call Center from the MAS Office
and is in compliance with the terms of the Original Call Center Agreement, as
amended by Addendum No. 1 (collectively the "Call Center Agreement"); and
WHEREAS. the parties wish to clarify and modify certain terms of the Call
Center Agreement:
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows
1. The foregoing recitals are incorporated as part of this Addendum No. 2
as if fully set forth herein,
2. Pursuant to the provisions of this Addendum No. 2, Section 20 of the
Call Center Agreement will be amended and restated in its entirety as follows:
<PAGE>
"20. Indemnification and Insurance
-----------------------------
(a) AD hereby agrees to indemnify, hold harmless and defend MAS, any
affiliate or subsidiary of MAS which engages the Physicians and/or the Health
Staff, the Physicians and the Health Staff from and against any and all claims
of any nature whatsoever arising directly from the operation of the Call Center
brought against MAS, any affiliate or subsidiary of MAS which engages the
Physicians and/or the Health Staff, the Physicians and/or Health Staff provided
that there is no finding that MAS, any affiliate or subsidiary of MAS which
engages the Physicians and/or the Health Staff, the Physicians and/or the Health
Staff has not complied with all of the protocols and procedures for operating
the Call Center agreed to between MAS and AD.
(b) AD shall at all times during the term of this Service Agreement
maintain general liability business insurance with coverage limits of Two
Million Dollars ($2,000.000) per occurrence and Six Million Dollars ($6,000,000)
in the aggregate. In addition, AD will make reasonable business efforts to have
MAS named as an additional Insured under said general liability insurance
policy.
(c) In the event that MAS or the affiliate or subsidiary of MAS which
engages the Physicians and/or the Health Staff reasonably incurs an increase in
its malpractice insurance coverage over and above the current annual premium
payment of MAS in the amount of $22,000 for the employment of the Physicians and
Health Staff, then AD will reimburse MAS or the affiliate or subsidiary of MAS
which engages the Physicians and/or the Health Staff for any annual premium
expense in excess of the aforesaid current annual premium payment."
3. All other terms and conditions of the Call Center Agreement shall
remain in full force and effect.
4. This Addendum No. 2 shall be governed by and construed in accordance
with the laws of the State of Maryland without regard to its conflict of laws
principles.
5. This Addendum No. 2 shall be binding upon the parties hereto and
their respective successors and assigns, but this shall not be deemed to permit
any assignment not permitted pursuant to the Call Center Agreement.
6. Any provision of this Addendum No. 2 which shall prove to be invalid,
void or illegal shall in no way affect, impair of invalidate any other provision
hereof and such other provision shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Addendum No. 2 to be
effective as of this 29 day of January, 1999.
ATTEST AMERICA'S DOCTOR, INC.
______________________________ by: /s/ Scott Rifkin, M.D.
-------------------------
Scott Rifkin, M.D., President
ATTEST MEDICAL ADVISORY SYSTEMS, INC
______________________________ by: /s/ Ronald Pickett
-------------------
Ronald Pickett, President
READ AND AGREED TO:
PREMIER RESEARCH WORLDWIDE, LTD.
By: /s/ Joel Morganroth M.D.
-------------------------
Joel Morganroth M.D. President
<PAGE>
Exhibit 10.5
PROFESSIONAL PERSONNEL SERVICES AGREEMENT
THIS PROFESSIONAL PERSONNEL SERVICES AGREEMENT (the "Agreement") is made
the 11th day of December, 1998, by and between Medical Advisory Systems, Inc.,
a Delaware corporation, with an address of 8050 Southern Maryland Boulevard,
Owings, Maryland 20736 (the "Provider") and Hall & Doc-Talk Associates, P.A., a
Maryland professional corporation with an address of 8050 Southern Maryland
Blvd., Owings, Maryland 20736(the "Physician").
RECITALS
A. Physician is a physician or a physicians' group comprised of licensed
physicians, which engages other licensed physicians and health care providers to
provide medical information and assistance to service providers of same.
B. Provider is engaged in the business of providing medical information
and assistance to clients and third-party assistance providers (the "Services"),
as more fully described on Exhibit A attached hereto and made a part hereof, as
such Exhibit A may be amended from time to time.
C. Physician and Provider wish to enter into an agreement whereby
Physician shall furnish Services to Provider.
NOW, THEREFORE, Provider and the Physician, for and in consideration of the
mutual covenants and agreements set forth herein, do hereby agree as follows:
GOVERNING TERMS
This Agreement and the attached Exhibit A, as may be amended from time to
time, constitute the sole, exclusive and entire agreement between Physician
and Provider. Any modifications must be in writing and signed by both
parties. This Agreement and the attached Exhibit A shall control in the
event of any inconsistency in any document referred to or incorporated
herein, or provided by Provider.
SCOPE OF SERVICES
Physician agrees to perform all Services described in Exhibit A attached
hereto and made a part hereof. No change or increase in the Scope of
Services shall be valid unless agreed to in writing by Physician and
Provider in advance of performance of the Services.
PERFORMANCE; TIME FOR PERFORMANCE
Physician is retained to provide Services for and on behalf of Provider in
1
<PAGE>
accordance with the terms of this Agreement, the attached Exhibit A hereto
and the policies and procedures reasonably adopted from time to time by
Provider. In connection with the performance of Services, Physician agrees
to complete such time records, reports and documents as may be reasonably
required by Provider from time to time. Additionally, Physician agrees to
provide such other ancillary and related services as reasonably requested
by Provider from time to time during the term of this Agreement. Physician
shall provide Services at the office of Provider, on a day or days of the
week as assigned by Provider.
MATERIALS, EQUIPMENT AND LABOR
Provider undertakes and agrees to furnish to Physician all supplies,
materials and related equipment necessary to complete the required
Services.
PAYMENTS
Provider shall pay Physician the agreed amount for Services rendered and in
accordance with the terms set forth in Exhibit A. Physician shall submit
invoices weekly and such invoices shall be paid by Provider within 7 days
of receipt thereof.
DISCLAIMER
The parties understand that the medical personnel who shall provide
Services as referenced herein, are not agents or employees of Physician,
but are independently licensed and insured contractors. It is understood
that Physician does not have any control over the judgement exercised by
any of these independent medical contractors and shares no liability for
same.
FORCE MAJEURE
If either party is prevented in whole or in part from performing its
obligations under this Agreement by unforeseeable events or causes beyond
its control and without its fault or negligence, then during the course of
such event or cause the party so prevented shall be excused from whatever
performance is affected by such event or cause; provided that such party
provides prompt written notice to the other party of such condition. The
acts or events of force majeure include, but are not limited to acts of
God, unusually severe weather, labor disputes, fires, riots, civil
commotion, acts of federal, state or local governmental authorities, and
acts of war.
SUBCONTRACTS
Physician shall require each subcontractor to adhere to the terms and
conditions of this Agreement and all applicable policies and procedures.
Nothing herein shall be deemed to create a contractual relationship between
any such SUBCONTRACTOR and Provider.
2
<PAGE>
ASSIGNMENT
Neither party shall assign this Agreement in whole or in part without the
prior written consent of the other party.
RESPONSIBILITIES OF PROVIDER
Provider shall furnish Physician with physical and administrative
assistance and support as reasonably required in Physician's performance of
Physician's obligations hereunder, including (1) office facilities, (2)
technical assistance, (3) supplies and equipment, (4) reception and
telephone answering services, (5) stationery and office supplies, (6)
resource library facilities, and (7) parking facilities. Provider shall
reimburse Physician for the cost of professional liability insurance and
workers' compensation insurance related to the provision of Services.
Provider shall be responsible for billing and the collection of all fees
for Services from clients and third-party providers. Physician shall adopt
and maintain commercial reasonable procedures for recording Services
rendered as directed by Provider from time to time.
LICENSES AND PERMITS
Physician shall secure and maintain at all time during the term of this
Agreement any and all licenses and permits as shall be necessary to render
the Services to be performed by Physician under this Agreement. Each
physician or health care provider subcontractor shall at all times while
engaged by Physician to provide Services hereunder have and maintain a
professional license to practice medicine in one of the states of the
United States of America.
CONFIDENTIALITY AND CONFLICTS OF INTEREST
Each of Physician and Provider agrees to hold in strict confidence any and
all information provided by the other party in the course of rendering the
Services. (the "Information"). This section shall not apply to any
Information or portions of such Information which (a) are or become
generally available to the public other than as a result of a disclosure by
the other party, or (b) becomes available on a non-confidential basis from
a source other than the other party, or (c) is the subject of a written
release letter provided by the other party. If there is reasonable doubt
about the confidential status of any information, Physician or Provider
must inquire with the other party in writing as to such information.
RESPONSIBILITY OF PHYSICIAN AND ITS PERSONNEL
Physician shall at all times enforce strict discipline and good order among
its subcontractors that enter Provider's offices, and shall not knowingly
engage any unfit or untrained person or anyone not skilled in the work
assigned to him. Provider may require changes in personnel assigned to
perform services on Provider's site when, in Provider's opinion,
Physician's work is not being performed timely or satisfactorily.
3
<PAGE>
INSURANCE
Physician shall, for the mutual protection and benefit of both Physician
and Provider, procure and maintain in full force and effect at all times
during the performance of the Services policies of insurance issued by
carriers acceptable to the Provider which afford the following coverages:
a. Workers' Compensation - Statutory
b. Professional Liability Insurance - Not less than
$1,000,000
Physician hereby agrees to deliver to Provider a Certificate(s) of
Insurance evidencing the above coverage with limits not less than those
specified above.
INDEMNIFICATION
Each of Physician and Provider agrees to indemnify, defend and hold
harmless the other from and against all claims, suits or demands of any
kind and description, and from and against all alleged or actual damages,
loss, fines or penalties which the other party's property may sustain,
incur, suffer or receive and which arise or allegedly arise in whole from
the other party's performance under this Agreement or from any other
conduct, actions or inactions by the other party. Provider shall
indemnify Physician for any costs, penalties or interest related to an
adverse determination as to the independent contractor status of
Physician's subcontractors. The parties agree that any contractual
indemnification of Provider by a Client of Provider is intended to pass
through to Physician for Services provided to said Client.
RIGHT TO TERMINATE AGREEMENT
Termination For Cause.
Provider may terminate or cancel this Agreement in whole or in part for
cause if: (1) Physician's performance does not conform to Provider's
obligation under the terms of this Agreement; (2) Physician fails to
timely and satisfactorily provide its Services to Provider. Where a basis
for termination exists, Provider will give Physician written notice
specifying Physician's deficiencies. Physician will have seven (7) days of
the date of Physician's receipt of written notice to correct stated
deficiencies. Should deficiencies not be corrected, Provider may
terminate this Agreement for cause. Any notice of termination shall
specify the extent to which performance under the Agreement is terminated,
and the effective termination date. Provider shall pay Physician for
performance received, approved and accepted by Provider prior to the
effective date of termination.
Termination For Convenience (Without Cause).
Physician or Provider may, by written notice, terminate or cancel this
Agreement upon sixty (60) days written notice to the other party and for
any reason. In the
4
<PAGE>
event this Agreement is terminated for convenience or canceled, Physician
shall be entitled to recover the balance due on the Agreement for the
Services received, approved and accepted by Provider up through the date of
termination.
DISPUTES:
Any dispute arising out of, or in connection with, this Agreement shall
first be subject to mediation administered by the American Arbitration
Association. Any dispute which cannot be amicably settled through
mediation between the parties shall be finally settled by arbitration under
the Rules of Commercial Arbitration of the American Arbitration
Association. A demand for arbitration may be made as soon as it becomes
apparent that the matter cannot be settled through mediation. The
mediation or arbitration shall take place at a mutually convenient location
in the city closest to Physician's facility. The resulting decision of the
arbitrators shall be final and binding on the parties. Judgment upon any
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. No request or demand for mediation or arbitration
shall be made after the date on which the applicable statute of limitations
would expire.
GOVERNING LAW:
This Agreement, including performance and all disputes hereunder, shall be
governed by the laws of the state of Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WITNESS: PHYSICIAN:
Hall and DocTalk Associates, Inc.,
a Maryland professional corporation
____________________ By: /s/ Thomas M. Hall, M.D., M.I.M.
-----------------------------------
Thomas M. Hall, M.D., M.I.M., President
WITNESS: PROVIDER:
Doc-Talk, L.L.C.
a Delaware Limited Liability company
____________________ By: /s/ Ronald W. Pickett
-----------------------
Ronald W. Pickett, President
5
<PAGE>
Exhibit 10.6
PROFESSIONAL PERSONNEL SERVICES AGREEMENT
THIS PROFESSIONAL PERSONNEL SERVICES AGREEMENT (the "Agreement") is made
the 11 day of December, 1998, by and between Medical Advisory Systems,
Inc., a Delaware corporation, with an address of 8050 Southern Maryland
Boulevard, Owings, Maryland 20736 (the "Provider") and Hall & Associates, P.A.,
a Maryland professional corporation with an address of 8050 Southern Maryland
Blvd., Owings, Maryland 20736(the "Physician").
RECITALS
A. Physician is a physician or a physicians' group comprised of licensed
physicians, which engages other licensed physicians and health care providers to
provide medical information and assistance to service providers of same.
B. Provider is engaged in the business of providing medical information
and assistance to clients and third-party assistance providers (the "Services"),
as more fully described on Exhibit A attached hereto and made a part hereof, as
such Exhibit A may be amended from time to time.
C. Physician and Provider wish to enter into an agreement whereby
Physician shall furnish Services to Provider.
NOW, THEREFORE, Provider and the Physician, for and in consideration of the
mutual covenants and agreements set forth herein, do hereby agree as follows:
GOVERNING TERMS
This Agreement and the attached Exhibit A, as may be amended from time to
time, constitute the sole, exclusive and entire agreement between Physician
and Provider. Any modifications must be in writing and signed by both
parties. This Agreement and the attached Exhibit A shall control in the
event of any inconsistency in any document referred to or incorporated
herein, or provided by Provider.
SCOPE OF SERVICES
Physician agrees to perform all Services described in Exhibit A attached
hereto and made a part hereof. No change or increase in the Scope of
Services shall be valid unless agreed to in writing by Physician and
Provider in advance of performance of the Services.
PERFORMANCE; TIME FOR PERFORMANCE
Physician is retained to provide Services for and on behalf of Provider in
1
<PAGE>
accordance with the terms of this Agreement, the attached Exhibit A hereto
and the policies and procedures reasonably adopted from time to time by
Provider. In connection with the performance of Services, Physician agrees
to complete such time records, reports and documents as may be reasonably
required by Provider from time to time. Additionally, Physician agrees to
provide such other ancillary and related services as reasonably requested
by Provider from time to time during the term of this Agreement. Physician
shall provide Services at the office of Provider, on a day or days of the
week as assigned by Provider.
MATERIALS, EQUIPMENT AND LABOR
Provider undertakes and agrees to furnish to Physician all supplies,
materials and related equipment necessary to complete the required
Services.
PAYMENTS
Provider shall pay Physician the agreed amount for Services rendered and in
accordance with the terms set forth in Exhibit A. Physician shall submit
invoices weekly and such invoices shall be paid by Provider within 7 days
of receipt thereof.
DISCLAIMER
The parties understand that the medical personnel who shall provide
Services as referenced herein, are not agents or employees of Physician,
but are independently licensed and insured contractors. It is understood
that Physician does not have any control over the judgement exercised by
any of these independent medical contractors and shares no liability for
same.
FORCE MAJEURE
If either party is prevented in whole or in part from performing its
obligations under this Agreement by unforeseeable events or causes beyond
its control and without its fault or negligence, then during the course of
such event or cause the party so prevented shall be excused from whatever
performance is affected by such event or cause; provided that such party
provides prompt written notice to the other party of such condition. The
acts or events of force majeure include, but are not limited to acts of
God, unusually severe weather, labor disputes, fires, riots, civil
commotion, acts of federal, state or local governmental authorities, and
acts of war.
SUBCONTRACTS
Physician shall require each subcontractor to adhere to the terms and
conditions of this Agreement and all applicable policies and procedures.
Nothing herein shall be deemed to create a contractual relationship between
any such SUBCONTRACTOR and Provider.
2
<PAGE>
ASSIGNMENT
Neither party shall assign this Agreement in whole or in part without the
prior written consent of the other party.
RESPONSIBILITIES OF PROVIDER
Provider shall furnish Physician with physical and administrative
assistance and support as reasonably required in Physician's performance of
Physician's obligations hereunder, including (1) office facilities, (2)
technical assistance, (3) supplies and equipment, (4) reception and
telephone answering services, (5) stationery and office supplies, (6)
resource library facilities, and (7) parking facilities. Provider shall
reimburse Physician for the cost of professional liability insurance and
workers' compensation insurance related to the provision of Services.
Provider shall be responsible for billing and the collection of all fees
for Services from clients and third-party providers. Physician shall adopt
and maintain commercial reasonable procedures for recording Services
rendered as directed by Provider from time to time.
LICENSES AND PERMITS
Physician shall secure and maintain at all time during the term of this
Agreement any and all licenses and permits as shall be necessary to render
the Services to be performed by Physician under this Agreement. Each
physician or health care provider subcontractor shall at all times while
engaged by Physician to provide Services hereunder have and maintain a
professional license to practice medicine in one of the states of the
United States of America.
CONFIDENTIALITY AND CONFLICTS OF INTEREST
Each of Physician and Provider agrees to hold in strict confidence any and
all information provided by the other party in the course of rendering the
Services. (the "Information"). This section shall not apply to any
Information or portions of such Information which (a) are or become
generally available to the public other than as a result of a disclosure by
the other party, or (b) becomes available on a non-confidential basis from
a source other than the other party, or (c) is the subject of a written
release letter provided by the other party. If there is reasonable doubt
about the confidential status of any information, Physician or Provider
must inquire with the other party in writing as to such information.
RESPONSIBILITY OF PHYSICIAN AND ITS PERSONNEL
Physician shall at all times enforce strict discipline and good order among
its subcontractors that enter Provider's offices, and shall not knowingly
engage any unfit or untrained person or anyone not skilled in the work
assigned to him. Provider may require changes in personnel assigned to
perform services on Provider's site when, in Provider's opinion,
Physician's work is not being performed timely or satisfactorily.
3
<PAGE>
INSURANCE
Physician shall, for the mutual protection and benefit of both Physician
and Provider, procure and maintain in full force and effect at all times
during the performance of the Services policies of insurance issued by
carriers acceptable to the Provider which afford the following coverages:
a. Workers' Compensation - Statutory
b. Professional Liability Insurance - Not less than
$1,000,000
Physician hereby agrees to deliver to Provider a Certificate(s) of
Insurance evidencing the above coverage with limits not less than those
specified above.
INDEMNIFICATION
Each of Physician and Provider agrees to indemnify, defend and hold
harmless the other from and against all claims, suits or demands of any
kind and description, and from and against all alleged or actual damages,
loss, fines or penalties which the other party's property may sustain,
incur, suffer or receive and which arise or allegedly arise in whole from
the other party's performance under this Agreement or from any other
conduct, actions or inactions by the other party. Provider shall indemnify
Physician for any costs, penalties or interest related to an adverse
determination as to the independent contractor status of Physician's
subcontractors. The parties agree that any contractual indemnification of
Provider by a Client of Provider is intended to pass through to Physician
for Services provided to said Client.
RIGHT TO TERMINATE AGREEMENT
Termination For Cause.
Provider may terminate or cancel this Agreement in whole or in part for
cause if: (1) Physician's performance does not conform to Provider's
obligation under the terms of this Agreement; (2) Physician fails to timely
and satisfactorily provide its Services to Provider. Where a basis for
termination exists, Provider will give Physician written notice specifying
Physician's deficiencies. Physician will have seven (7) days of the date of
Physician's receipt of written notice to correct stated deficiencies.
Should deficiencies not be corrected, Provider may terminate this Agreement
for cause. Any notice of termination shall specify the extent to which
performance under the Agreement is terminated, and the effective
termination date. Provider shall pay Physician for performance received,
approved and accepted by Provider prior to the effective date of
termination.
Termination For Convenience (Without Cause).
Physician or Provider may, by written notice, terminate or cancel this
Agreement upon sixty (60) days written notice to the other party and for
any reason. In the
4
<PAGE>
event this Agreement is terminated for convenience or canceled, Physician
shall be entitled to recover the balance due on the Agreement for the
Services received, approved and accepted by Provider up through the date of
termination.
DISPUTES:
Any dispute arising out of, or in connection with, this Agreement shall
first be subject to mediation administered by the American Arbitration
Association. Any dispute which cannot be amicably settled through mediation
between the parties shall be finally settled by arbitration under the Rules
of Commercial Arbitration of the American Arbitration Association. A demand
for arbitration may be made as soon as it becomes apparent that the matter
cannot be settled through mediation. The mediation or arbitration shall
take place at a mutually convenient location in the city closest to
Physician's facility. The resulting decision of the arbitrators shall be
final and binding on the parties. Judgment upon any award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. No
request or demand for mediation or arbitration shall be made after the date
on which the applicable statute of limitations would expire.
GOVERNING LAW:
This Agreement, including performance and all disputes hereunder, shall be
governed by the laws of the state of Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WITNESS: PHYSICIAN:
Hall and Associates, Inc.,
a Maryland professional corporation
By: /s/ Thomas M. Hall, M.D., M.I.M.
____________________ --------------------------------
Thomas M. Hall, M.D., M.I.M., President
WITNESS: PROVIDER:
Medical Advisory Systems, Inc.,
a Delaware corporation
By: /s/ Ronald W. Pickett
____________________ ---------------------
Ronald W. Pickett, President
5
<PAGE>
Exhibit 10.7
PROFESSIONAL PERSONNEL SERVICES AGREEMENT
THIS PROFESSIONAL PERSONNEL SERVICES AGREEMENT (the "Agreement") is made
the 11th day of December, 1998, by and between Medical Advisory Systems, Inc.,
a Delaware corporation, with an address of 8050 Southern Maryland Boulevard,
Owings, Maryland 20736 (the "Provider") and Hall & Amdoc Associates, P.A., a
Maryland professional corporation with an address of 8050 Southern Maryland
Blvd., Owings, Maryland 20736(the "Physician").
RECITALS
A. Physician is a physician or a physicians' group comprised of licensed
physicians, which engages other licensed physicians and health care providers to
provide medical information and assistance to service providers of same.
B. Provider is engaged in the business of providing medical information
and assistance to clients and third-party assistance providers (the "Services"),
as more fully described on Exhibit A attached hereto and made a part hereof, as
such Exhibit A may be amended from time to time.
C. Physician and Provider wish to enter into an agreement whereby
Physician shall furnish Services to Provider.
NOW, THEREFORE, Provider and the Physician, for and in consideration of the
mutual covenants and agreements set forth herein, do hereby agree as follows:
GOVERNING TERMS
This Agreement and the attached Exhibit A, as may be amended from time to
time, constitute the sole, exclusive and entire agreement between Physician
and Provider. Any modifications must be in writing and signed by both
parties. This Agreement and the attached Exhibit A shall control in the
event of any inconsistency in any document referred to or incorporated
herein, or provided by Provider.
SCOPE OF SERVICES
Physician agrees to perform all Services described in Exhibit A attached
hereto and made a part hereof. No change or increase in the Scope of
Services shall be valid unless agreed to in writing by Physician and
Provider in advance of performance of the Services.
PERFORMANCE; TIME FOR PERFORMANCE
Physician is retained to provide Services for and on behalf of Provider in
1
<PAGE>
accordance with the terms of this Agreement, the attached Exhibit A hereto
and the policies and procedures reasonably adopted from time to time by
Provider. In connection with the performance of Services, Physician agrees
to complete such time records, reports and documents as may be reasonably
required by Provider from time to time. Additionally, Physician agrees to
provide such other ancillary and related services as reasonably requested
by Provider from time to time during the term of this Agreement. Physician
shall provide Services at the office of Provider, on a day or days of the
week as assigned by Provider.
MATERIALS, EQUIPMENT AND LABOR
Provider undertakes and agrees to furnish to Physician all supplies,
materials and related equipment necessary to complete the required
Services.
PAYMENTS
Provider shall pay Physician the agreed amount for Services rendered and in
accordance with the terms set forth in Exhibit A. Physician shall submit
invoices weekly and such invoices shall be paid by Provider within 7 days
of receipt thereof.
DISCLAIMER
The parties understand that the medical personnel who shall provide
Services as referenced herein, are not agents or employees of Physician,
but are independently licensed and insured contractors. It is understood
that Physician does not have any control over the judgement exercised by
any of these independent medical contractors and shares no liability for
same.
FORCE MAJEURE
If either party is prevented in whole or in part from performing its
obligations under this Agreement by unforeseeable events or causes beyond
its control and without its fault or negligence, then during the course of
such event or cause the party so prevented shall be excused from whatever
performance is affected by such event or cause; provided that such party
provides prompt written notice to the other party of such condition. The
acts or events of force majeure include, but are not limited to acts of
God, unusually severe weather, labor disputes, fires, riots, civil
commotion, acts of federal, state or local governmental authorities, and
acts of war.
SUBCONTRACTS
Physician shall require each subcontractor to adhere to the terms and
conditions of this Agreement and all applicable policies and procedures.
Nothing herein shall be deemed to create a contractual relationship between
any such SUBCONTRACTOR and Provider.
2
<PAGE>
ASSIGNMENT
Neither party shall assign this Agreement in whole or in part without the
prior written consent of the other party.
RESPONSIBILITIES OF PROVIDER
Provider shall furnish Physician with physical and administrative
assistance and support as reasonably required in Physician's performance of
Physician's obligations hereunder, including (1) office facilities, (2)
technical assistance, (3) supplies and equipment, (4) reception and
telephone answering services, (5) stationery and office supplies, (6)
resource library facilities, and (7) parking facilities. Provider shall
reimburse Physician for the cost of professional liability insurance and
workers' compensation insurance related to the provision of Services.
Provider shall be responsible for billing and the collection of all fees
for Services from clients and third-party providers. Physician shall adopt
and maintain commercial reasonable procedures for recording Services
rendered as directed by Provider from time to time.
LICENSES AND PERMITS
Physician shall secure and maintain at all time during the term of this
Agreement any and all licenses and permits as shall be necessary to render
the Services to be performed by Physician under this Agreement. Each
physician or health care provider subcontractor shall at all times while
engaged by Physician to provide Services hereunder have and maintain a
professional license to practice medicine in one of the states of the
United States of America.
CONFIDENTIALITY AND CONFLICTS OF INTEREST
Each of Physician and Provider agrees to hold in strict confidence any and
all information provided by the other party in the course of rendering the
Services. (the "Information"). This section shall not apply to any
Information or portions of such Information which (a) are or become
generally available to the public other than as a result of a disclosure by
the other party, or (b) becomes available on a non-confidential basis from
a source other than the other party, or (c) is the subject of a written
release letter provided by the other party. If there is reasonable doubt
about the confidential status of any information, Physician or Provider
must inquire with the other party in writing as to such information.
RESPONSIBILITY OF PHYSICIAN AND ITS PERSONNEL
Physician shall at all times enforce strict discipline and good order among
its subcontractors that enter Provider's offices, and shall not knowingly
engage any unfit or untrained person or anyone not skilled in the work
assigned to him. Provider may require changes in personnel assigned to
perform services on Provider's site when, in Provider's opinion,
Physician's work is not being performed timely or satisfactorily.
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INSURANCE
Physician shall, for the mutual protection and benefit of both Physician
and Provider, procure and maintain in full force and effect at all times
during the performance of the Services policies of insurance issued by
carriers acceptable to the Provider which afford the following coverages:
a. Workers' Compensation - Statutory
b. Professional Liability Insurance - Not less than
$1,000,000
Physician hereby agrees to deliver to Provider a Certificate(s) of
Insurance evidencing the above coverage with limits not less than those
specified above.
INDEMNIFICATION
Each of Physician and Provider agrees to indemnify, defend and hold
harmless the other from and against all claims, suits or demands of any
kind and description, and from and against all alleged or actual damages,
loss, fines or penalties which the other party's property may sustain,
incur, suffer or receive and which arise or allegedly arise in whole from
the other party's performance under this Agreement or from any other
conduct, actions or inactions by the other party. Provider shall
indemnify Physician for any costs, penalties or interest related to an
adverse determination as to the independent contractor status of
Physician's subcontractors. The parties agree that any contractual
indemnification of Provider by a Client of Provider is intended to pass
through to Physician for Services provided to said Client.
RIGHT TO TERMINATE AGREEMENT
Termination For Cause.
Provider may terminate or cancel this Agreement in whole or in part for
cause if: (1) Physician's performance does not conform to Provider's
obligation under the terms of this Agreement; (2) Physician fails to timely
and satisfactorily provide its Services to Provider. Where a basis for
termination exists, Provider will give Physician written notice specifying
Physician's deficiencies. Physician will have seven (7) days of the date of
Physician's receipt of written notice to correct stated deficiencies.
Should deficiencies not be corrected, Provider may terminate this Agreement
for cause. Any notice of termination shall specify the extent to which
performance under the Agreement is terminated, and the effective
termination date. Provider shall pay Physician for performance received,
approved and accepted by Provider prior to the effective date of
termination.
Termination For Convenience (Without Cause).
Physician or Provider may, by written notice, terminate or cancel this
Agreement upon sixty (60) days written notice to the other party and for
any reason. In the
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event this Agreement is terminated for convenience or canceled, Physician
shall be entitled to recover the balance due on the Agreement for the
Services received, approved and accepted by Provider up through the date of
termination.
DISPUTES:
Any dispute arising out of, or in connection with, this Agreement shall
first be subject to mediation administered by the American Arbitration
Association. Any dispute which cannot be amicably settled through
mediation between the parties shall be finally settled by arbitration under
the Rules of Commercial Arbitration of the American Arbitration
Association. A demand for arbitration may be made as soon as it becomes
apparent that the matter cannot be settled through mediation. The
mediation or arbitration shall take place at a mutually convenient location
in the city closest to Physician's facility. The resulting decision of the
arbitrators shall be final and binding on the parties. Judgment upon any
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. No request or demand for mediation or arbitration
shall be made after the date on which the applicable statute of limitations
would expire.
GOVERNING LAW:
This Agreement, including performance and all disputes hereunder, shall be
governed by the laws of the state of Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WITNESS: PHYSICIAN:
Hall and AmDoc Associates, Inc.,
a Maryland professional corporation
By: /s/ Thomas M. Hall, M.D., M.I.M.
____________________ ---------------------------------
Thomas M. Hall, M.D., M.I.M., President
WITNESS: PROVIDER:
Medical Advisory Systems, Inc.,
a Delaware corporation
By: /s/ Ronald W. Pickett
____________________ ---------------------
Ronald W. Pickett, President
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Exhibit 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made effective as of the
1st day of November, 1998, by and between MEDICAL ADVISORY SYSTEMS, INC., a
Delaware corporation, having its principal office at 8050 Southern Maryland
Boulevard, Owings, Maryland 20736 (the "Company") and Ronald W. Pickett who
resides at the North Carolina address on file with the Company (the
"Executive").
EXPLANATORY STATEMENT
---------------------
The Company desires to employ the Executive as the President of the
Company, on the terms and conditions herein set forth, and the Executive has
agreed to accept employment with the Company on the terms and conditions herein
set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises made herein, the parties agree as follows:
1. Employment. The Company hereby employs the Executive as the
----------
President and agrees to continue the Executive in that position (or in any other
position approved by the Executive) during the term of this Agreement.
2. Term. This Agreement shall begin November 1, 1998 and shall
----
continue until October 31, 2001. Thereafter, this Agreement shall renew
automatically from Employment Year to Employment Year, subject to the right of
either party to terminate this Agreement as of the end of an Employment Year
subsequent to the 2001 Employment Year, upon one hundred eighty (180) days'
prior written notice to the other party. An "Employment Year" begins November 1
and ends the following October 31.
3. Salary. The Executive's salary for the 1999-2001 Employment Years
------
under this Agreement shall be at the rate of $130,000.00 per annum. The
Executive's salary shall be paid in bi-weekly payments in accordance with the
Company's policies in effect from time to time. Thereafter, the Executive's
salary for each Employment Year shall be determined pursuant to the discretion
of the Company's Board of Directors, but shall not be less than $130,000 per
annum. There shall be deducted from the actual annual compensation paid to the
Executive such sums as may be required to be deducted or withheld under the
provisions of law, such as Social Security payments, income tax withholdings and
any other deductions required by law now in effect or hereafter put into effect
during the life of this Agreement.
4. Bonuses. In addition to his salary, the Executive shall be
-------
eligible for a bonus for an Employment Year which is deemed appropriate by the
Board of Directors of the Company.
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5. Duties.
------
A. During the term of this Agreement, the Executive shall serve
as the President of the Company. He shall have such powers and shall perform
such duties as are incident and customary to his office, and shall have such
other powers and shall perform such other duties as from time to time shall be
granted and assigned to him by the Board of Directors of the Company. As the
President of the Company, the Executive may also serve as a member of the Board
of Directors of the Company.
B. The Executive shall devote appropriate attention, skill, and
energy to the performance of his duties under this Agreement, and shall comply
with all reasonable professional requests of the Board of Directors; provided,
however, that the Executive will be permitted to engage in and manage personal
investments and to participate in community and charitable affairs, so long as
such activities do not interfere with his duties under this Agreement.
C. The Executive shall immediately notify the Company of (i)
his own illness and consequent inability to work, or (ii) any intended
significant change in his plans to work for the Company.
D. During the term of this Agreement, the Executive shall serve
in any additional offices or positions of the Company (including as a member of
the Company's Board of Directors and any committees thereof) to which he may be
elected or appointed by appropriate action of the Company. The Executive shall
serve in any such additional capacities without separate compensation for so
serving, unless otherwise authorized by the Board.
6. Expenses.
--------
A. The Company shall reimburse the Executive for all expenses
incurred in connection with his duties on behalf of the Company, provided that
the Executive shall keep, and present to the Company, records and receipts
relating to reimbursable expenses incurred by him. Such records and receipts
shall be maintained and presented in a format, and with such regularity, as the
Company reasonably may require in order to substantiate the Company's right to
claim income tax deductions for such expenses. Without limiting the generality
of the foregoing, the Executive shall be entitled to reimbursement for any
business-related travel, business-related entertainment whether at his residence
or otherwise, and other costs and expenses reasonably incident to the
performance of his duties on behalf of the Company.
7. Fringe Benefits. During the term of this Agreement, the Executive
---------------
shall be entitled to participate in any and all fringe benefit plans, programs
and practices sponsored by the Company for the benefit of its executive
employees, and shall be furnished with other services and perquisites
appropriate to his position. Without limiting the generality of the foregoing,
the Executive shall be
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entitled to the following benefits (regardless of whether such benefits are
provided to other executives):
A. Comprehensive medical insurance for the Executive, his
spouse, and his dependent children with no deductibles or co-insurance.
B. Dental insurance for the Executive, his spouse, and his
dependent children with no deductibles or co-insurance.
C. Participation in Company profit sharing, stock option,
bonus, incentive and performance award programs.
D. Use of a Company automobile comparable to the automobile
presently used by the Executive. Such automobile shall be maintained by the
Executive at all times in clean and good mechanical order, at the expense of the
Company. At the end of the term of employment hereunder, Executive shall have
the option to purchase such automobile from the Company at a price equal to the
residual value on the lease of such automobile or the then "Blue Book" wholesale
value of such automobile, whichever price is lesser.
E. Use of a Company desk-top computer, fax machine and printer
(the "Computer") comparable to the Computer presently used by the Executive.
At the end of the term of employment hereunder, Executive shall have the option
to purchase such Computer from the Company at a price equal to the fair market
value of the Computer, as determined by the company's IT department or other
mutually-agreed upon appraisal source.
F. Annual physical examinations paid by the Company.
G. Payment of various professional journals, newspapers and
newsletters to which the Executive currently subscribes.
H. Payment of customary and reasonable cellular phone and pager
expenses utilized in connection with carrying out Executive's duties hereunder.
I. Gifts: Plaques, citations, mementos, frequent traveler
------
awards and unsolicited promotional gifts provided by the Company's vendors in
the name of the Executive remain the property of the Executive at all times.
8. Disability.
----------
A. As used in this Agreement, the term "Disability" shall mean
the continuous and uninterrupted inability to perform the Executive's duties on
behalf of the Company, by reason of accident, illness, or disease, and the
"Onset" of a Disability shall mean the first day of such inability to perform
his duties.
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B. If the Executive is disabled, he shall be entitled to
receive the salary to which he otherwise would have been entitled, were he not
disabled, for a period of nine (9) months from the Onset of his Disability.
C. If the Executive remains disabled throughout the nine (9)
month period beginning with the Onset of his Disability, then his employment
shall terminate, and he will be entitled to Termination Benefits in accordance
with Paragraph 10.
9. Termination Benefits.
--------------------
A. If the Executive's employment terminates for any reason
(including death, Disability, and voluntary or involuntary resignation) other
than (i) termination "For Cause" under Paragraph 11, or (ii) in connection with
a Change in Control, as described in Subparagraph B hereof, the Executive (or,
in the event of his death, the Executive's estate) shall be entitled to receive
from the Company a Termination Benefit equal to 100% of the Executive's annual
salary as in effect on the date of his termination of employment. The
Termination Benefit will be payable in six (6) monthly installments on the first
day of each month for the six (6) months immediately following the month in
which the Executive's employment terminates. The Termination Benefit to be paid
to the Executive under this Paragraph A shall be in addition to any payments
received by the Executive during the nine (9) month period preceding the
Executive's termination of employment as Disability payments under Paragraph
9.B.
B. In the event the Executive is terminated or the Executive
resigns at any time during the term hereof, and such termination or resignation
is within one (1) year following a "Change in Control" (as defined below), the
Corporation shall, within fifteen (15) days of such termination, pay Executive a
lump sum cash payment equal to the sum of:
(i) the greater of a.) his total cash compensation for the
remainder of the term of this Agreement at the rate and as
required by Paragraph 3 of this Agreement, or b.) $130,000;
and
(ii) in addition to the benefits provided under any pension benefit
plan and any supplemental pension plan maintained by the
Corporation to which the Executive is entitled, which benefits
will be paid as provided under such pension benefit plan and
supplemental pension plan, an amount equal to the value of the
pension benefits he would have accrued under such pension
benefit plan and supplemental pension plan if he had remained
in the employ of the Corporation for the 90 days following the
date of termination, and
(iii) an amount equal to the value of incentive compensation under
the plans and policies then in effect (including, but not
limited to the right to participate in all of the Corporation's
profit sharing plans and to receive and exercise stock options
and stock appreciation rights and/or sell such options to the
Corporation at the then market price and to receive bonuses and
performance awards and similar incentive compensation benefits)
to which he would have
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<PAGE>
been entitled under this Agreement if he had remained in the
employ of the Corporation for the 90 days following the date
of termination, and
(iv) an amount equal to the value of the employee benefits, as
set forth in Paragraph 7 hereof, to which he would have been
entitled under this Agreement if he had remained in the
employ of the Corporation for the remainder of the term as
set forth in Paragraph 2 hereof.
For purposes of this Agreement, the term "Change in Control" shall mean
that:
(i) a successful initial public offering of equity securities of the
Corporation (the "IPO") has been completed and funded; or
(ii) after an IPO has been completed and funded (I) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) is or becomes the beneficial owner, directly
or indirectly, of securities of the Corporation representing thirty
percent (30%) or more of the combined voting power of the then
outstanding securities of the Corporation; or (II) a change in the
composition of a majority of the Board of Directors within twelve
(12) months after any "person" (as defined above) is or becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing twenty percent (20%) of the combined
voting power of the then outstanding securities of the Corporation;
or (III) a change of control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 as in
effect on the date of this Agreement; or
(iii) there shall be consummated (I) any consolidation or merger or share
exchange of the Corporation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares of
the Corporation's common stock would be converted into cash,
securities or other property, other than a merger of the
Corporation in which the holders of the Corporation's common stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, or (II) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all, or a substantial portion, of the assets of the Corporation;
or
(iv) the stockholders of the Corporation approve a plan or proposal for
the complete or partial liquidation, dissolution or divisive
reorganization of the Corporation.
For purposes of this subparagraph, the term "person" shall not be deemed to
include any officer or director of the Corporation as of the date hereof or any
such person's transferee if such transferee is related to such person by blood
or marriage, or is affiliated with or controlled by such person.
C. In the event the Employment Agreement terminates upon
the normal expiration of the Employment Period or any renewal thereof, the
Corporation shall not be obligated to pay the Executive any further cash
compensation; provided, however, the Corporation shall during the eighteen (18)
month period following such expiration date continue to maintain in force at all
times Executive's health, professional liability, disability and life insurance
policies which
5
<PAGE>
were in effect on the date of expiration provided the carrier of such policies
allows such coverage at the time of such termination.
10. Termination of Employment for Cause. Notwithstanding the
-----------------------------------
provisions of Paragraph 2 of this Agreement, the Executive's employment (and all
of his rights and benefits under this Agreement) shall terminate immediately and
without further notice upon the happening of any one or more of the following
events:
A. The Executive is convicted of a criminal offense involving
moral turpitude;
B. The Executive persists, for a period of thirty (30) days
after written notice from the Company, in a course of conduct determined by the
Board of Directors of the Company to be in violation of his duties to the
Company under this Agreement;
C. The Executive has been guilty of criminal or dishonest
conduct pertaining to the business or affairs of the Company, or is guilty of
any act or omission the intended or likely consequence of which is material
injury to the Company's business, property or reputation.
11. Non-Competition.
---------------
A. The Executive agrees that, during the term of his employment
with the Company, and for a period of two (2) years after the termination of his
employment for any reason whatsoever, he shall not, directly or indirectly,
whether as an employee, employer, consultant, agent, principal, partner, owner,
shareholder (other than as a shareholder of less than 5% of a class of publicly
traded securities), officer, or director, or in any other individual or
representative capacity, compete with or engage in any "business" (as defined
below) that is competitive with the Company; solicit or accept any business or
employment from any entity that is, or at any time within the preceding two
years was, or was solicited to become, a customer of the Company; recruit for a
competitor of the Company, employ, discuss employment by a competitor with, or
assist a competitor in employing, any person who is, or at any time within one
year was, an employee of the Company; interfere with, disrupt or attempt to
disrupt any relationship, contractual or otherwise, between the Company and any
customer, client, supplier, consultant or employee of the Company; or solicit,
for the Employee's own account or for the account of any other person, orders
for services or products sold by the Company during the Employee's association
with the Company. For purposes hereof, the "business" of the Company shall mean
the provision of medical assistance products and services in the United States
of America, including (i) 24-hour-a-day medical information to the public via
the Internet under an exclusive contract with America's Doctor, Inc., which
provides real-time live on-line chats between physicians and Internet users,
(ii) 24-hour-a-day medical information to individuals, groups and associations
via 800/900 telephone numbers, (iii)) 24-hour-a-day medical advice to ships at
sea through a worldwide telecommunications system, and ancillary services
including training programs, medical records maintenance and medical cost
containment services, (iv)) 24-hour-a-day call center services and assistance
to HMOs, multi-national corporations and the international travel industry, and
(v) customized pharmaceutical and medical supply kits which are sold to the
maritime and aviation industries.
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<PAGE>
B. The Executive expressly acknowledges and agrees (i) that the
restrictions set forth herein are reasonable, in terms of scope, duration,
geographic area, and otherwise, (ii) that the protections afforded to the
Company hereunder are necessary to protect its legitimate business interests,
and (iii) that the agreement to observe such restrictions form a material part
of the consideration for this Agreement and the Executive's employment by the
Company.
12. Confidential Information. The Executive agrees that, during the
------------------------
term of his employment with the Company, and for a period of two (2) years after
the termination of his employment for any reason whatsoever, he shall not
disclose to any person, other than in the discharge of his duties under this
Agreement, any information or knowledge relating to (i) the business, operations
or internal structure of the Company, (ii) the clients (or customers) or
potential clients (or potential customers) of the Company, (iii) any method
and/or procedure (such as records, programs, systems, correspondence, or other
documents), relating or pertaining to projects developed by the Company or
contemplated to be developed by the Company, or (iv) the Company's business,
which information or knowledge the Executive shall have obtained during the term
of this Agreement, and which is otherwise of a secret or confidential nature.
Further, upon leaving the employ of the Company for any reason whatsoever, the
Executive shall not take with him, without prior written consent of the Board of
Directors of the Company, any documents, forms, or other reproductions of any
data or any information relating to or pertaining to the Company, any of the
clients (or customers) or potential clients (or potential customers) of the
Company or any other confidential information or trade secrets.
13. Other Agreements. Any earlier employment agreements between the
----------------
Executive and the Company are hereby terminated and shall be of no further
effect after the effective date hereof.
14. Miscellaneous.
-------------
A. Any notices required by this Agreement shall (i) be made in
writing and mailed by certified mail, return receipt requested, with adequate
postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received
by the addressee within ten (10) days after given or when the certified mail
receipt for such mail is executed, whichever is earlier; and (iv) in the case of
the Company, be mailed to its principal office, or in the case of the Executive,
be mailed to the last address that the Executive has given to the Company.
B. This Agreement shall be binding upon and inure to the
benefit of, the parties, their successors, assigns, personal representatives,
distributees, heirs, and legatees.
C. If any dispute arises under this Agreement, such dispute
shall be resolved in accordance with arbitration conducted in accordance with
the Maryland Uniform Arbitration Act.
7
<PAGE>
D. If any term or provision of this Agreement is held to be
illegal or invalid, said illegality or invalidity shall not affect the remaining
terms or provisions hereof, and each term and provision of this Agreement shall
be enforced to the fullest extent permitted by law.
E. As monetary damages may not be an adequate remedy for the
breach by either party of its obligations under this Agreement, each party
agrees that it may be subjected to a decree of specific performance, injunction,
or other appropriate equitable or legal relief, for the enforcement of its
obligations hereunder.
F. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, under seal, as of the day and year first hereinabove written.
WITNESS: MEDICAL ADVISORY SYSTEMS, INC.,
A Delaware corporation
__________________ By: /s/ Thomas M. Hall, M.D., M.I.M. (SEAL)
----------------------------------------
Name: Thomas M. Hall, M.D., M.I.M.
Title: Chief Executive Officer
WITNESS:
/s/ Ronald W. Pickett (SEAL)
__________________ ---------------------
Ronald W. Pickett
8
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Exhibit 10.9
EXECUTIVE EMPLOYMENT AGREEMENT
------------------------------
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made effective as of the 1st day
of November, 1998, by and between MEDICAL ADVISORY SYSTEMS, INC., a Delaware
corporation, having its principal office at 8050 Southern Maryland Boulevard,
Owings, Maryland 20736 (the "Company") and THOMAS M. HALL, M.D., M.I.M., who
resides at the Maryland address on file with the Company (the "Executive").
EXPLANATORY STATEMENT
---------------------
The Company desires to employ the Executive as the Chief Executive
Officer and the Chief Physician of the Company, on the terms and conditions
herein set forth, and the Executive has agreed to accept employment with the
Company on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises made herein, the parties agree as follows:
1. Employment. The Company hereby employs the Executive as the Chief
----------
Executive Officer and the Chief Physician and agrees to continue the Executive
in that position (or in any other position approved by the Executive) during the
term of this Agreement.
2. Term. This Agreement shall begin November 1, 1998 and shall
----
continue until October 31, 2001. Thereafter, this Agreement shall renew
automatically from Employment Year to Employment Year, subject to the right of
either party to terminate this Agreement as of the end of an Employment Year
subsequent to the 2001 Employment Year, upon one hundred eighty (180) days'
prior written notice to the other party. An "Employment Year" begins November 1
and ends the following October 31.
3. Salary. The Executive's salary for the 1999-2001 Employment Years
------
under this Agreement shall be at the rate of $260,000.00 per annum. The
Executive's salary shall be paid in bi-weekly payments in accordance with the
Company's policies in effect from time to time. Thereafter, the Executive's
salary for each Employment Year shall be determined pursuant to the discretion
of the Company's Board of Directors, but shall not be less than $260,000 per
annum. There shall be deducted from the actual annual compensation paid to the
Executive such sums as may be required to be deducted or withheld under the
provisions of law, such as Social Security payments, income tax withholdings and
any other deductions required by law now in effect or hereafter put into effect
during the life of this Agreement.
4. Bonuses. In addition to his salary, the Executive shall be
-------
eligible for a bonus for an Employment Year which is deemed appropriate by the
Board of Directors of the Company.
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5. Duties.
------
A. During the term of this Agreement, the Executive shall serve
as the Chief Executive Officer and the Chief Physician of the Company. He shall
have such powers and shall perform such duties as are incident and customary to
his office, and shall have such other powers and shall perform such other duties
as from time to time shall be granted and assigned to him by the Board of
Directors of the Company. As the Chief Physician of the Company, the Executive
shall hire or cause to be hired all medical personnel employed by the Company
and all other personnel utilized in the Company's medical information, advice
and training operations. As the Chief Executive Officer of the Company, the
Executive may also serve as a member of the Board of Directors of the Company.
B. The Executive shall devote appropriate attention, skill, and
energy to the performance of his duties under this Agreement, and shall comply
with all reasonable professional requests of the Board of Directors; provided,
however, that the Executive will be permitted to engage in and manage personal
investments and to participate in community and charitable affairs, so long as
such activities do not interfere with his duties under this Agreement.
C. The Executive shall immediately notify the Company of (i) his
own illness and consequent inability to work, or (ii) any intended significant
change in his plans to work for the Company.
D. During the term of this Agreement, the Executive may serve in
any additional offices or positions of the Company (including as a member of the
Company's Board of Directors and any committees thereof) to which he may be
elected or appointed by appropriate action of the Company. The Executive's
service in any such additional capacities shall be without separate
compensation, unless otherwise authorized by the Board.
6. Vacation and Sick Leave.
-----------------------
A. The Executive shall be entitled to a total of five (5) weeks
of vacation each Employment Year. Unused vacation time may be accumulated only
through the following Employment Year. The Executive may take his vacation at
such time or times as shall not interfere with the performance of his duties
under this Agreement. Upon termination of employment, the Executive will be
compensated for unused vacation leave.
B. The Executive shall be entitled to paid sick leave and
holidays in accordance with the Company's announced policy for executive
employees, as in effect from time to time. Unused sick time shall not accumulate
from year to year. Upon termination of employment, the Executive will not be
compensated for unused sick leave.
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7. Expenses.
--------
A. The Company shall reimburse the Executive for all expenses
incurred in connection with his duties on behalf of the Company, provided that
the Executive shall keep, and present to the Company, records and receipts
relating to reimbursable expenses incurred by him. Such records and receipts
shall be maintained and presented in a format, and with such regularity, as the
Company reasonably may require in order to substantiate the Company's right to
claim income tax deductions for such expenses. Without limiting the generality
of the foregoing, the Executive shall be entitled to reimbursement for any
business-related travel, business-related entertainment whether at his residence
or otherwise, and other costs and expenses reasonably incident to the
performance of his duties on behalf of the Company.
B. The Executive has supplied his own desk (the "Desk") and
certain artwork, books and diplomas (the "Artwork") for use in his office at the
Company's headquarters in Owings, Maryland, which items remain the property of
the Executive. Upon termination of employment, the Executive may remove the Desk
and Artwork and transport them to his home or another office. In such case,
Executive is entitled to reimbursement for the costs of packing the Desk and
Artwork and transporting them anywhere within a 150-mile radius of the Owings
office.
8. Fringe Benefits. During the term of this Agreement, the Executive
---------------
shall be entitled to participate in any and all fringe benefit plans, programs
and practices sponsored by the Company for the benefit of its executive
employees, and shall be furnished with other services and perquisites
appropriate to his position. Without limiting the generality of the foregoing,
the Executive shall be entitled to the following benefits (regardless of whether
such benefits are provided to other executives):
A. Comprehensive medical insurance for the Executive, his
spouse, and his dependent children with no deductibles or co-insurance.
B. Dental insurance for the Executive, his spouse, and his
dependent children with no deductibles or co-insurance.
C. Payment of customary and reasonable professional liability
costs and expenses, including maintenance of a professional liability insurance
policy with minimum limits of $2 million per incident / $4 million aggregate
during the term of employment, and payment of any premiums to maintain a minimum
of 7 years of "tail" coverage following termination of the policy or of
employment for any reason.
D. Participation in Company profit sharing, stock option,
bonus, incentive and performance award programs.
E. Use of a Company automobile comparable to the automobile
presently used by the Executive. Such automobile shall be maintained by the
Executive at all times in clean
3
<PAGE>
and good mechanical order, at the expense of the Company. At the end of the term
of employment hereunder, Executive shall have the option to purchase such
automobile from the Company at a price equal to the residual value on the lease
of such automobile or the then "Blue Book" wholesale value of such automobile,
whichever price is lesser.
F. Use of a Company desk-top computer, fax machine and printer
(the "Computer") comparable to the Computer presently used by the Executive. At
the end of the term of employment hereunder, Executive shall have the option to
purchase such Computer from the Company at a price equal to the fair market
value of the Computer, as determined by the company's IT department or other
mutually-agreed upon appraisal source.
G. Annual physical examinations paid by the Company.
H. Payment of miscellaneous continuing medical education
expenses, including, two (2) conferences per year and various professional
journals, newspapers and newsletters to which the Executive currently
subscribes.
I. Payment of medical licensing fees required by the State of
Maryland and the District of Columbia.
J. Payment of customary and reasonable cellular phone and pager
expenses utilized in connection with carrying out Executive's duties hereunder.
K. Payment of membership fees for the following medical
societies: ASLAMS and ACOM.
L. Gifts: Plaques, citations, mementos, frequent traveler
------
awards and unsolicited promotional gifts provided by the Company's vendors in
the name of the Executive remain the property of the Executive at all times.
9. Disability.
----------
A. As used in this Agreement, the term "Disability" shall mean
the continuous and uninterrupted inability to perform the Executive's duties on
behalf of the Company, by reason of accident, illness, or disease, and the
"Onset" of a Disability shall mean the first day of such inability to perform
his duties.
B. If the Executive is disabled, he shall be entitled to
receive the salary to which he otherwise would have been entitled, were he not
disabled, for a period of nine (9) months from the Onset of his Disability.
4
<PAGE>
C. If the Executive remains disabled throughout the nine (9)
month period beginning with the Onset of his Disability, then his employment
shall terminate, and he will be entitled to Termination Benefits in accordance
with Paragraph 10.
10. Termination Benefits.
--------------------
A. If the Executive's employment terminates for any reason
(including death, Disability, and voluntary or involuntary resignation) other
than (i) termination "For Cause" under Paragraph 11, or (ii) in connection with
a Change in Control, as described in Subparagraph B hereof, the Executive (or,
in the event of his death, the Executive's estate) shall be entitled to receive
from the Company a Termination Benefit equal to 100% of the Executive's annual
salary as in effect on the date of his termination of employment. The
Termination Benefit will be payable in six (6) monthly installments on the first
day of each month for the six (6) months immediately following the month in
which the Executive's employment terminates. The Termination Benefit to be paid
to the Executive under this Paragraph A shall be in addition to any payments
received by the Executive during the nine (9) month period preceding the
Executive's termination of employment as Disability payments under Paragraph
9.B.
B. In the event the Executive is terminated or the Executive
resigns at any time during the term hereof, and such termination or resignation
is within one (1) year following a "Change in Control" (as defined below), the
Corporation shall, within fifteen (15) days of such termination, pay Executive a
lump sum cash payment equal to the sum of:
(i) the greater of a.) his total cash compensation for the
remainder of the term of this Agreement at the rate and as
required by Paragraph 3 of this Agreement, together with the
monetary value of all accrued, unused vacation time, or b.)
$260,000 ; and
(ii) in addition to the benefits provided under any pension
benefit plan and any supplemental pension plan maintained by
the Corporation to which the Executive is entitled, which
benefits will be paid as provided under such pension benefit
plan and supplemental pension plan, an amount equal to the
value of the pension benefits he would have accrued under
such pension benefit plan and supplemental pension plan if he
had remained in the employ of the Corporation for the 90 days
following the date of termination, and
(iii) an amount equal to the value of incentive compensation under
the plans and policies then in effect (including, but not
limited to the right to participate in all of the
Corporation's profit sharing plans and to receive and
exercise stock options and stock appreciation rights and/or
sell such options to the Corporation at the then market price
and to receive bonuses and performance awards and similar
incentive compensation benefits) to which he would have been
entitled under this Agreement if he had remained in the
employ of the Corporation for the 90 days following the date
of termination, and
(iv) an amount equal to the value of the employee benefits, as set
forth in Paragraph 8 hereof, to which he would have been
entitled under this
5
<PAGE>
Agreement if he had remained in the employ of the Corporation
for the remainder of the term as set forth in Paragraph 2
hereof.
(v) reimbursement for the cost of packing and transporting the
Executive's Desk and Artwork as detailed in Paragraph 7.
For purposes of this Agreement, the term "Change in Control" shall
mean that:
(i) a successful initial public offering of equity securities of
the Corporation (the "IPO") has been completed and funded; or
(ii) after an IPO has been completed and funded (I) any "person"
(as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) is or becomes the beneficial
owner, directly or indirectly, of securities of the
Corporation representing thirty percent (30%) or more of the
combined voting power of the then outstanding securities of
the Corporation; or (II) a change in the composition of a
majority of the Board of Directors within twelve (12) months
after any "person" (as defined above) is or becomes the
beneficial owner, directly or indirectly, of securities of
the Corporation representing twenty percent (20%) of the
combined voting power of the then outstanding securities of
the Corporation; or (III) a change of control of a nature
that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of
this Agreement; or
(iii) there shall be consummated (I) any consolidation or merger or
share exchange of the Corporation in which the Corporation is
not the continuing or surviving corporation or pursuant to
which shares of the Corporation's common stock would be
converted into cash, securities or other property, other than
a merger of the Corporation in which the holders of the
Corporation's common stock immediately prior to the merger
have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (II)
any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or a
substantial portion, of the assets of the Corporation; or
(iv) the stockholders of the Corporation approve a plan or
proposal for the complete or partial liquidation, dissolution
or divisive reorganization of the Corporation.
For purposes of this subparagraph, the term "person" shall not be deemed to
include any officer or director of the Corporation as of the date hereof or any
such person's transferee if such transferee is related to such person by blood
or marriage, or is affiliated with or controlled by such person.
C. In the event the Employment Agreement terminates upon
the normal expiration of the Employment Period or any renewal thereof, the
Corporation shall not be obligated to pay the Executive any further cash
compensation; provided, however, the Corporation shall during the eighteen (18)
month period following such expiration date continue to maintain in force at all
times Executive's health, professional liability, disability and life insurance
policies which were in effect on the date of expiration provided the carrier of
such policies allows such coverage at the time of such termination.
6
<PAGE>
11. Termination of Employment for Cause. Notwithstanding the
-----------------------------------
provisions of Paragraph 2 of this Agreement, the Executive's employment (and all
of his rights and benefits under this Agreement) shall terminate immediately and
without further notice upon the happening of any one or more of the following
events:
A. The Executive is convicted of a criminal offense involving
moral turpitude;
B. The Executive persists, for a period of thirty (30) days
after written notice from the Company, in a course of conduct determined by the
Board of Directors of the Company to be in violation of his duties to the
Company under this Agreement;
C. The Executive has been guilty of criminal or dishonest
conduct pertaining to the business or affairs of the Company, or is guilty of
any act or omission the intended or likely consequence of which is material
injury to the Company's business, property or reputation.
12. Non-Competition.
---------------
A. The Executive agrees that, during the term of his employment
with the Company, and for a period of two (2) years after the termination of his
employment for any reason whatsoever, he shall not, directly or indirectly,
whether as an employee, employer, consultant, agent, principal, partner, owner,
shareholder (other than as a shareholder of less than 5% of a class of publicly
traded securities), officer, or director, or in any other individual or
representative capacity, compete with or engage in any "business" (as defined
below) that is competitive with the Company; solicit or accept any business or
employment from any entity that is, or at any time within the preceding two
years was, or was solicited to become, a customer of the Company; recruit for a
competitor of the Company, employ, discuss employment by a competitor with, or
assist a competitor in employing, any person who is, or at any time within one
year was, an employee of the Company; interfere with, disrupt or attempt to
disrupt any relationship, contractual or otherwise, between the Company and any
customer, client, supplier, consultant or employee of the Company; or solicit,
for the Employee's own account or for the account of any other person , orders
for services or products sold by the Company during the Employee's association
with the Company. For purposes hereof, the "business" of the Company shall mean
the provision of medical assistance products and services in the United States
of America, including (i) 24-hour-a-day medical information to the public via
the Internet under an exclusive contract with America's Doctor, Inc., which
provides real-time live on-line chats between physicians and Internet users,
(ii) 24-hour-a-day medical information to individuals, groups and associations
via 800/900 telephone numbers, (iii) ) 24-hour-a-day medical advice to ships at
sea through a worldwide telecommunications system, and ancillary services
including training programs, medical records maintenance and medical cost
containment services, (iv) ) 24-hour-a-day call center services and assistance
to HMOs, multi-national corporations and the international travel industry, and
(v) customized pharmaceutical and medical supply kits which are sold to the
maritime and aviation industries.
7
<PAGE>
B. The Executive expressly acknowledges and agrees (i) that the
restrictions set forth herein are reasonable, in terms of scope, duration,
geographic area, and otherwise, (ii) that the protections afforded to the
Company hereunder are necessary to protect its legitimate business interests,
and (iii) that the agreement to observe such restrictions form a material part
of the consideration for this Agreement and the Executive's employment by the
Company.
C. Notwithstanding the above, nothing construed herein shall
prohibit or impede the Executive from (i) owning, operating and maintaining
control of TLC, Inc., and (ii) continuing to practice medicine and providing
direct patient care, similar to that which the Executive presently provides in
the Company's outpatient clinic, and maintaining the records of such patients.
13. Confidential Information. The Executive agrees that, during the
------------------------
term of his employment with the Company, and for a period of two (2) years after
the termination of his employment for any reason whatsoever, he shall not
disclose to any person, other than in the discharge of his duties under this
Agreement, any information or knowledge relating to (i) the business, operations
or internal structure of the Company, (ii) the clients (or customers) or
potential clients (or potential customers) of the Company, (iii) any method
and/or procedure (such as records, programs, systems, correspondence, or other
documents), relating or pertaining to projects developed by the Company or
contemplated to be developed by the Company, or (iv) the Company's business,
which information or knowledge the Executive shall have obtained during the term
of this Agreement, and which is otherwise of a secret or confidential nature.
Further, upon leaving the employ of the Company for any reason whatsoever, the
Executive shall not take with him, without prior written consent of the Board of
Directors of the Company, any documents, forms, or other reproductions of any
data or any information relating to or pertaining to the Company, any of the
clients (or customers) or potential clients (or potential customers) of the
Company or any other confidential information or trade secrets.
14. Other Agreements. Any earlier employment agreements between the
----------------
Executive and the Company are hereby terminated and shall be of no further
effect after the effective date hereof.
15. Miscellaneous.
-------------
A. Any notices required by this Agreement shall (i) be made in
writing and mailed by certified mail, return receipt requested, with adequate
postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received
by the addressee within ten (10) days after given or when the certified mail
receipt for such mail is executed, whichever is earlier; and (iv) in the case of
the Company, be mailed to its principal office, or in the case of the Executive,
be mailed to the last address that the Executive has given to the Company.
B. This Agreement shall be binding upon and inure to the
benefit of, the parties, their successors, assigns, personal representatives,
distributees, heirs, and legatees.
8
<PAGE>
C. If any dispute arises under this Agreement, such dispute
shall be resolved in accordance with arbitration conducted in accordance with
the Maryland Uniform Arbitration Act.
D. If any term or provision of this Agreement is held to be
illegal or invalid, said illegality or invalidity shall not affect the remaining
terms or provisions hereof, and each term and provision of this Agreement shall
be enforced to the fullest extent permitted by law.
E. As monetary damages may not be an adequate remedy for the
breach by either party of its obligations under this Agreement, each party
agrees that it may be subjected to a decree of specific performance, injunction,
or other appropriate equitable or legal relief, for the enforcement of its
obligations hereunder.
F. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, under seal, as of the day and year first hereinabove written.
WITNESS: MEDICAL ADVISORY SYSTEMS, INC.,
A Delaware corporation
_____________________________ By: /s/ Ronald W. Pickett (SEAL)
------------------------------
Name: Ronald W. Pickett
Title: President
WITNESS:
_____________________________ /s/ Thomas M. Hall, M.D., M.I.M. (SEAL)
----------------------------------
Thomas M. Hall, M.D., M.I.M.
9
<PAGE>
Exhibit 10.10
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT is made and dated as of August 13, 1997 by and
between Medical Advisory Systems, Inc., a Delaware corporation with its
principal place of business located at 8050 Southern Maryland Blvd., Owings,
Maryland 20736 (the "Company"), and Robert C. Snyder who resides at 7450 Belle
Ridge Court, Hughesville, MD 20637 (the "Employee").
WHEREAS, the Company desires to employ the Employee, and the Employee
desires to obtain employment with the Employer.
NOW, THEREFORE, in consideration of the foregoing, and of the covenants
and agreements contained in this Agreement, the parties hereto, intending to be
legally bound, agree as follows:
1. Employment. The Company hereby agrees to employ the Employee, and the
----------
Employee hereby agrees to accept employment with the Company in the position of
Chief Accountant on the terms and subject to the conditions set forth in this
Agreement.
2. Term. This Agreement will commence on the date hereof and the
----
Employee's employment will terminate on the earlier of:
(i) the Employee's 65th birthday;
(ii) the Employee's death;
(iii) the effective date of termination of the
Employee in accordance with Section 10; or
(iv) 30 days after the giving of notice by the
<PAGE>
-2-
Employee to the Company of termination.
The exercise of the Company's or the Employee's right to terminate
this Agreement in accordance with the foregoing shall not abrogate the rights
and remedies of the terminating party in respect of any breach giving rise to
the termination.
3. Compensation.
------------
(a) The Company will pay to the Employee, for services rendered under
this Agreement, an annual salary of $50,000 per year in bi-weekly payments. The
Employee is entitled to a bonus of $1,250 per quarter fiscal year, payable in
the pay period following the Company's filing with the SEC of its quarterly or
annual report, provided said report shows the Company was profitable for the
quarter and provided the Employee is satisfactorily employed with the Company on
the pay date. Management will review the employee's performance with the company
on an annual basis.
(b) In addition to salary, the Employee will be entitled to
reimbursement by the Company for all pre-authorized reasonable and proper
business, travel, and miscellaneous expenses incurred by the Employee in
furtherance of the Company's business, subject to the policies and guidelines of
the Company in effect at the time such expenses are incurred, upon the timely
submission to the Company of such proper vouchers, receipts, bills, or other
documentation authenticating the Employee's expenses as may be required by the
Company.
(c) The Company may deduct from the Employee's salary
<PAGE>
-3-
and other compensation all amounts that the Company determines (i) are required
to be deducted therefrom by federal, state, local, or foreign law, and (ii) are
the responsibility of the Employee because of injury or damage suffered by the
Company due to the Employee's failure to exercise reasonable care, skill,
diligence, or judgment in the performance and discharge of the Employee's duties
of employment or the Employee's theft of Company property or equipment.
(d) Except as provided for in this Agreement, the Employee shall not
be entitled to receive additional salary or other compensation by reason of
employment by the Company in the position identified above or by reason of his
election or appointment to any additional position in the Company or assignment
of additional duties by the Company, but the Employee will be entitled to
receive any bonuses or other compensation as may be provided to him by the
Company, in its sole and absolute discretion, at any time or from time to time.
(e) All rights of the Employee to receive compensation under this
Agreement shall cease as of the date of termination of employment under this
Agreement, but the Company shall pay to the Employee any amounts owed to the
Employee as salary, other compensation, or reimbursable expenses accrued or
incurred, as the case may be, before the date of termination, and the Company
shall have the right to deduct and withhold from any such payments the amount of
any advances of compensation or loans made to the Employee or on the Employee's
behalf or other monies
<PAGE>
-4-
owed to the Company by the Employee. If the payment due to the Employee upon
termination is insufficient to cover any such amount, the Employee shall
reimburse the Company in full for the deficiency within 20 days of the date of
notification by the Company of the deficiency.
4. Fringe Benefits.
---------------
While in the employment of the Company, the Employee will be entitled
to participate in all employee benefit plans or programs of the Company, if any,
to the extent that the Employee's position, tenure, salary, age, health, and
other qualifications make the Employee eligible to participate, subject to the
rules and regulations applicable to the particular plan or program, including,
but not limited to, insurance, pension, welfare, and other fringe benefit plans.
All matters of eligibility for benefits under any insurance plans shall be
determined in accordance with the provisions of the applicable insurance policy.
The Company shall not be liable to the Employee or to the Employee's family,
heirs, executors, beneficiaries, personal or legal representatives, or other
successors for any payment payable or claimed to be payable under any plan of
insurance.
5. Leave.
-----
The Employee shall be entitled to 15 days of paid vacation and 3 days
of sick leave each year. Vacation days not used during any year may be carried
only through the following year. Upon termination of employment the employee
will be
<PAGE>
-5-
compensated for unused vacation leave. The employee will not be compensated for
unused sick leave.
6. Duties and Conduct of the Employee.
----------------------------------
The Employee will perform and discharge well and faithfully all duties
and responsibilities that may be assigned to the Employee from time to time by
the Company in connection with the conduct of its business, and will at all
times abide by, adhere to, comply with, and obey all provisions of the Articles
of Incorporation, By-Laws, policies, rules, and regulations of the Company and
any subsidiary as they may exist from time to time. The Employee will exercise
reasonable care, skill, diligence, and judgment in the performance and discharge
of the duties of the Employee's employment, including using due care in the use
of Company property and equipment.
7. Disclosure of Information.
-------------------------
The Employee recognizes and acknowledges that the Company's trade
secrets and proprietary information, as they may exist from time to time, are
valuable, special, and unique properties of the Company's business, access to
and knowledge of which are essential to the performance of the Employee's duties
hereunder. The Employee will not, during or after the term of the Employee's
employment by the Company, in whole or in part, disclose such secrets or
information to any person, firm, corporation, association, or other entity for
any reason or purpose whatsoever, nor will the Employee make use of any such
property for the Employee's own purposes or for the benefit of
<PAGE>
-6-
any person, firm, corporation, association, or entity (except the Company) under
any circumstances during or after the term of the Employee's employment by the
Company; but after the Employee's employment by the Company terminates, these
restrictions shall not apply to such secrets and information as are then in the
public domain (as long as the Employee was not responsible, directly or
indirectly, for such secrets, information, or processes entering the public
domain without the Company's consent). The Employee agrees to hold, as the
Company's property, all memoranda, books, papers, letters, formulas, and other
data, and all copies thereof and therefrom, in any way relating to the Company's
business and affairs, whether made by the Employee or otherwise coming into the
Employee's possession, and on termination of the Employee's employment, or on
demand of the Company at any time, to deliver the same to the Company.
8. Covenant Not to Compete.
-----------------------
(a) During the term of the Employee's employment by the Company and
for a period of two years thereafter, the Employee shall not, directly or
indirectly, whether as an employee, employer, consultant, agent, principal,
partner, owner, shareholder (other than as a shareholder of less than 5% of a
class of publicly-traded securities), officer, or director, or in any other
individual or representative capacity, compete with or engage in any business
that is competitive with the Company; solicit or accept any business or
employment from any entity that is, or at any time within the preceding two
years was, or was
<PAGE>
-7-
solicited to become, a customer or affiliate of the Company; recruit for a
competitor of the Company, employ, discuss employment by a competitor with, or
assist a competitor in employing, any person who is, or at any time within one
year was, an employee of the Company; interfere with, disrupt or attempt to
disrupt any relationship, contractual or otherwise, between the Company and any
customer, client, supplier, consultant, or employee of the Company; or solicit,
for the Employee's own account or for the account of any other person, orders
for services or products sold by the Company during the Employee's association
with the Company.
(b) It is the desire and intent of the parties that the provisions of
this Section be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular portion of this Section is adjudicated to be
invalid or unenforceable, this Section shall be deemed amended to read in such a
manner that it is enforceable to the fullest extent permissible by law, such
reading to apply only with respect to the operation of this section in the
jurisdiction of the adjudication.
9. Inventions and Ideas.
--------------------
(a) The Employee hereby sells, transfers, and assigns to the Company
or to any person or entity designated by the Company, all of the entire right,
title, and interest of the Employee in and to all inventions, ideas,
disclosures, and
<PAGE>
-8-
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Employee, solely or jointly, in whole or in part, during the
term of this Agreement that (i) relate to methods, apparatus, designs, products,
processes, or devices sold, leased, used, or under development by the Company or
any subsidiary or (ii) otherwise relate to or pertain to the business,
functions, or operations of the Company or any subsidiary, or (iii) arise.
(wholly or partly) from the efforts of the Employee during the term of the
Employee's employment by the Company. The Employee shall communicate promptly
and disclose to the Company, in such form as the Company requests, all
information, details, and data pertaining to the aforementioned inventions,
ideas, disclosures, and improvements; and, whether during the term of the
Employee's employment under this Agreement or thereafter, the Employee shall
execute and deliver to the Company such formal transfers and assignments and
such other papers and documents as may be required of the Employee to permit the
Company or any person or entity designated by the Company to file and prosecute
patent applications with respect thereto and, as to copyrightable material, to
obtain copyright thereon.
(b) Any such invention, idea, disclosure, improvement or copyrightable
material produced by the Employee within one year following the termination of
the Employee's employment under this Agreement shall be deemed to fall within
the provisions of this paragraph unless proved by the Employee to have been
first conceived and made following such termination.
<PAGE>
-9-
10. Termination.
-----------
(a) Termination for Good Cause. Notwithstanding other terms in this
--------------------------
Agreement, the Company has the right to cancel and terminate the Employee's
employment under this Agreement and to discharge the Employee for "Good Cause"
immediately and at any time. For purposes of this agreement, the term ""Good
Cause" means any of the following: (a) dishonesty of the Employee in a material
matter; (b) the use of alcohol or illegal drugs by the Employee to an extent
that materially interferes with the performance of the Employee's duties
hereunder (as determined by the Company in its sole discretion); (c) repeated
failure by the Employee to devote proper time and attention to the business of
the Company; (e) conviction of a felony or other crime involving moral turpitude
or pursuant to which the Employee is imprisoned; (f) repeated and unexcused
absenteeism or tardiness; or (g) the material breach by the Employee of any of
the Employee's obligations or promises under this Agreement.
(b) Termination Without Good Cause.
------------------------------
The Company is entitled to terminate the employment of the Employee under this
Agreement at any time, for any reason, and without Good Cause, in accordance
with applicable law. Should the Company elect to terminate the Employee without
Good Cause, the Employee shall be entitled to payment, as stipulated damages, of
one month' s salary for each full year of employment completed, said payment not
to exceed two month's salary total.
<PAGE>
-10-
11. Arbitration of Dispute.
----------------------
The parties agree that any dispute or claim concerning this Agreement
or the terms and conditions of employment hereunder, including whether such
dispute or claim is arbitrable, will be settled by binding arbitration. The
arbitration proceedings shall be conducted under the rules of the American
Arbitration Association in effect at the time a demand for arbitration is made.
A decision and award of the arbitrator made thereunder shall be exclusive,
final, and binding on both parties, their heirs, executors, administrators,
successors, and assigns. one-half of the costs and expenses of the arbitration
shall be borne by each of the parties or their successors or assigns.
12. Governing Law.
-------------
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Maryland applicable to contracts made
and to be performed in the State of Maryland, without giving effect to the
Maryland principles of conflicts or choice of laws.
13. Waiver.
------
No failure of any party to exercise any power, right, or remedy under
this Agreement, or to insist upon the strict compliance by any other party with
any obligation, covenant, term, condition, warranty, or agreement in or under
this Agreement, and no custom or practice at variance with the terms of this
Agreement, shall constitute a waiver of any party's right
<PAGE>
-11-
to demand exact compliance with the terms of this Agreement.
14. Notice.
------
All notices pertaining to this Agreement shall be sufficient if in
writing and either hand-delivered or sent by registered or certified mail,
return receipt requested, firstclass postage prepaid, to the parties at the
addresses set forth in the first paragraph of this Agreement or to any other
address that may be given by one party to the other at any time and from time to
time by notice pursuant to this Section. Any such notice, if sent by registered
or certified mail, return receipt requested, first-class postage prepaid, shall
be deemed to have been given at the time of mailing. Any notice required to be
given within a stated period of time is considered timely if either hand-
delivered or postmarked on or before midnight of the last day of such period.
15. Headings Not Part of Agreement.
------------------------------
The headings in this Agreement have been inserted for convenience of
reference only and do not constitute a part of this Agreement or affect its
meaning, construction, or effect.
16. Entire Agreement.
----------------
This Agreement replaces any prior agreements, and contains all of the
agreements and understandings between the parties hereto with respect to its
subject matter. No oral agreements shall be held to affect the provisions
hereof. All subsequent changes and modifications, to be valid, must be by
written instrument executed by the Company and the Employee.
<PAGE>
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17. Burden and Benefit.
------------------
This Agreement is binding upon, and inures to the benefit of, the
Employee and the Employee's spouse, heirs, executors, administrators, and
personal and legal representatives, and the Company and the Company's successors
and assigns.
18. Counterparts.
-------------
This Agreement may be executed in one or more counterparts, but all
such counterparts shall constitute a single agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
EMPLOYEE
By: /s/ Robert C. Snyder
Signature
Printed Name: Robert C. Snyder
MEDICAL ADVISORY SYSTEMS, INC.
By: /s/ Thomas M. Hall, M.D.
Signature
Printed Name: Thomas M. Hall, M.D., M.I.M.
Title: Chief Executive Officer
<PAGE>
Exhibit 10.11
MEDICAL ADVISORY SYSTEMS, INC. STOCK OPTION PLAN
A. Purpose and Scope
-----------------
The Purposes of this Plan are to encourage stock ownership by key management and
employees of Medical Advisory Systems, Inc. (herein called the "Company"), to
provide an incentive for such employees to expand and improve the profits and
prosperity of the Company, and to assist the Company in attracting and retaining
key personnel through the grant of Options to purchase shares of the Company's
common stock.
B. Definitions
-----------
Unless otherwise required by the context:
. "Board" shall mean the Board of Directors of the Company.
. "Committee" shall mean the Compensation Committee, which is appointed by the
Board of Directors, and which shall be composed of two members of the Board.
. "Company" shall mean Medical Advisory Systems, Inc., a Maryland corporation.
. "Code" shall mean the Internal Revenue Code of 1954, as amended.
. "Option" shall mean a right to purchase Stock, granted pursuant to the Plan.
. "Option Price" shall mean the purchase price for a share of Stock under an
Option, as determined in Section "I" below.
. "Participant" shall mean an employee of the Company, or of any Subsidiary of
the Company, to whom an Option is granted under the Plan.
. "Plan" shall mean this Medical Advisory Systems, Inc. Stock Option Plan.
. "Stock" shall mean the common stock of the Company, par value $.005.
. "Subsidiary" shall mean a subsidiary corporation of the Company, as defined
in 425(f) and 425 (g) of the Code.
C. Stock to be Optioned
--------------------
Subject to the provisions of Section "P" of the Plan, the maximum number of
shares of Stock that may be optioned or sold under the Plan is 380,000 shares.
Such shares may be authorized but unissued shares of the Stock of the Company.
D. Administration
--------------
The Committee shall administer the Plan. Two members of the Committee shall
<PAGE>
constitute a quorum for the transaction of business. The Committee shall be
responsible to the Board for the operation of the Plan, and shall make
recommendations to the Board with respect to participation in the Plan by
employees of the Company and its Subsidiaries and with respect to the extent of
that participation. The interpretation and construction of any provision of the
Plan by the Committee shall be final, unless otherwise determined by the Board.
No member of the Board or the Committee shall be liable for any action or
determination made by him in good faith.
E. Eligibility
-----------
The Board, upon recommendation of the Committee, may grant Options to any key
management employee (including an employee who is a director or an officer) of
the Company or its Subsidiaries. Options may be awarded by the Board at any time
and from time to time to new Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Board,
upon recommendation by the Committee, shall determine. Options granted at
different times need not contain similar provisions.
F. Option Price
------------
The purchase price for Stock under each Option shall be 100 percent of the fair
market value of the Stock at the time the Option is granted, but in no event
less than the par value of the Stock.
G. Terms and Conditions of Options
-------------------------------
Options granted pursuant to the Plan shall be authorized by the Board and shall
be evidenced by agreements in such form as the Board, upon recommendation of the
Committee, shall from time to time approve.
H. Employment Agreement.
--------------------
The Board may, in its discretion, include in any Option granted under the Plan a
condition that the Participant shall agree to remain in the employ of, and to
render services to, the Company or any of its Subsidiaries for a period of time
(specified in the agreement) following the date the Option is granted. No such
agreement shall impose upon the Company or any of its Subsidiaries, however, any
obligation to employ the Participant for any period of time.
I. Time and Method of Payment.
--------------------------
The Option Price shall be paid in full either in cash or under a cash-less
option provision (depending on the form of Option Agreement granted to the
Participant) at the time an Option is exercised under the Plan. Otherwise, an
exercise of any Option granted under the Plan shall be invalid and of no effect.
Promptly after the exercise of an Option and
<PAGE>
the payment of the full Option Price, the Participant shall be entitled to the
issuance of a stock certificate evidencing his ownership of such Stock. A
Participant shall have none of the rights of a shareholder until shares are
issued to him, and no adjustment will be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.
J. Number of Shares.
----------------
Each Option shall state the total number of shares of Stock to which it pertains
and the number of Shares to which a participant is entitled under an Option.
agreement.
K. Option Period, and Limitations on Exercise of Options.
-----------------------------------------------------
The Board may, in its discretion, provide that an Option may not be exercised in
whole or in part for any period or periods of time specified in the Option
agreement. Except as provided in the Option agreement, an Option may be
exercised in whole in part at any time during its term. No Option may be
exercised after the expiration of five (5) years from the date it is granted. No
Option may be exercised for a fractional share of Stock.
L. Termination of Employment
-------------------------
Except as provided in Section "N" below, if a participant ceases to be employed
by the Company or any of its Subsidiaries, his Options shall terminate
immediately; provided, however, that if a Participant's cessation of employment
with the Company or its Subsidiaries is due to his retirement with the consent
of the Company or any of its Subsidiaries, the Participant may, at any time
within three months after such cessation of employment, exercise his Options to
the extent that he was entitled to exercise them on the date of cessation of
employment, but in no event shall any option be exercisable more than (5) years
from the date it was granted. The Committee may cancel an Option during the
three-month period referred to in this paragraph, if the Participant engages in
employment or activities contrary, in the opinion of the Committee, to the best
interests of the Company or any Subsidiaries. The Committee shall determine in
each case whether a termination of employment shall be considered a retirement
with the consent of the Company or a Subsidiary, and, subject to applicable law,
whether a leave of absence shall constitute a termination of employment. Any
such determination of the Committee shall be final and conclusive, unless
overruled by the Board.
M. Rights in the Event of Death.
----------------------------
If a Participant dies while employed by the Company or any of its Subsidiaries,
or within three months after having retired with the consent of the Company or
any of its Subsidiaries, and without having fully exercised his options, the
executors or administrators, or legatees or heirs, of his estate shall have the
right to exercise such Options and to the extent that such deceased Participant
was entitled to exercise the Options and on the date of his death; provided,
however, that in no event shall the
<PAGE>
Options be exercisable more than (5) years from the date they were granted.
N. No Obligations to Exercise Option or Stock Appreciation Rights
--------------------------------------------------------------
The granting of an Option shall impose no obligation upon the Participant to
exercise such Option.
O. Nonassignability
----------------
Options shall not be transferable other than by will or by the law of decent and
distribution, and during a Participant's lifetime shall be exercisable only by
such Participant.
P. Effect of Change in Stock Subject to the Plan
---------------------------------------------
The aggregate number of shares of Stock available for Options under the Plan,
the shares subject to any Option, the price per share, shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of the Plan resulting from (1)
a subdivision or consolidation of shares or any other capital adjustment, (2)
the payment of a stock dividend, or (3) other increase or decrease in such
shares effected without receipt of consideration by the Company, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
shall pertain, apply and relate to the securities to which a holder of the
number of shares of Stock subject to the Option would have been entitled after
the merger or consolidation.
Upon dissolution or liquidation of the Company, or upon a merger or
consolidation in which the Company is not the surviving corporation, all Options
outstanding under the Plan shall terminate; provided, however, that each
participant (and each other person entitled under this document to exercise an
Option) shall have the right, immediately prior to such dissolution or
liquidation, or such merger or consolidation, to exercise such Participant's
Options in whole or in part, but only to the extent that such Options are
otherwise exercisable under the terms of the Plan.
Q. Amendment and Termination
-------------------------
The Board, by resolution, may terminate, amend, or revise the Plan with respect
to any shares as to which Options have not been granted. Neither the Board nor
the Committee may, without the consent of the holder of an Option, alter or
impair any Option previously granted under the Plan, except as authorized
herein. Unless sooner terminated, the Plan shall remain in effect for a period
of 10 years from the date of the Plan's adoption by the board. Termination of
the Plan shall not affect any Option previously granted.
R. Agreement and Representation of Employees
-----------------------------------------
<PAGE>
As a condition to the exercise of any portion of an Option, the Company may
require the person exercising such Option or to represent and warrant at the
time of such exercise that any shares of Stock acquired at exercise are being
acquired only for investment and without any present intention to sell or
distribute such shares, if in the opinion of counsel for the Company, such a
representation is required under the Securities Act of 1933 or nay other
applicable law, regulation, or rule of any governmental agency.
S. Preservation of Shares of Stock
-------------------------------
The Company during the term of this Plan, will at all times reserve and keep
available, and will seek or obtain from any regulatory body having jurisdiction
any requisite authority necessary to issue and to sell, the number of Shares of
Stock that shall be sufficient to satisfy the requirements of this Plan. The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority deemed necessary by counsel for the Company for the lawful
issuance and sale of its stock hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell Stock as to which the
requisite authority has not been obtained.
T. Effective Date of Plan
----------------------
The plan shall be effective as of June 21, 1993; the date the Plan was approved
by the Board of Directors.
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
PARENT SUBSIDIARY ORGANIZATION
- ------ ---------- ------------
Medical Advisory Systems, Inc. Doc-Talk LLC Delaware Delaware
Medical Advisory Systems, Inc. TLC, Inc. Delaware
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