This excerpt taken from the MDTH DEF 14A filed Jan 28, 2005.
Charles R. Slaton. MedCath entered into an employment agreement with Mr. Slaton, president and chief operating officer, on September 3, 2003. The agreement provides for an initial term of five years and will automatically renew for one additional year unless terminated by either party. Mr. Slatons employment agreement provides for an initial base salary of $400,000 annually. His base salary will be adjusted annually at the discretion of the board of directors, but in no event will his base salary be reduced nor be less than the median base salary for a comparable position at corporations of similar size and character as the Company.
In addition to his base salary, Mr. Slaton is eligible for an annual cash bonus equal to a percentage of his base salary. The bonus for each fiscal year will be tied to either the Companys earnings per share as reported in its annual financial statements excluding any extraordinary or nonrecurring items set forth therein (EPS) and the annual EPS target for that year, or such other applicable performance targets, as are established by the compensation committee of the board of directors. On or before the beginning of each fiscal year, the compensation committee will establish an EPS target or other applicable performance target for that year. At the end of each fiscal year, Mr. Slaton will be paid a target bonus based upon the following formula:
If MedCath terminates Mr. Slatons employment without cause or if Mr. Slaton terminates his employment for good reason, he will be entitled to receive severance payments equal to two times his annual base salary at the time of termination payable over 12 months and a lump sum cash payment for any accrued but not yet paid vacation, compensation and expense reimbursements. He is also entitled to continued coverage under MedCaths medical, disability, and life insurance plans in accordance with the respective terms of those plans at MedCaths expense until the earlier of two years from the date of termination or until he is covered by comparable benefit plans by another employer. If MedCath terminates Mr. Caseys employment with cause or if he terminates his employment without good reason, he is only entitled to a lump sum cash payment for any accrued but not yet paid vacation, compensation and expense reimbursements. This agreement also contains a non-competition provision that prohibits Mr. Casey from competing with MedCath, either directly or indirectly, for a period of 1 year following termination of his employment. In addition, he has agreed not to hire or solicit MedCaths employees during this time.