Document:

Ex-10.52

 

EXHIBIT 10.52

EMPLOYMENT AGREEMENT

          AGREEMENT, made as of April 26, 2004 by and between MEDCATH CORPORATION, a
Delaware corporation (the “Company”) and GRANT WICKLUND (“Executive”).

RECITALS

          In order to induce Executive to serve as Senior Vice President, Chief
Administrative Officer of the Company, the Company desires to provide Executive
with compensation and other benefits on the terms and conditions set forth in
this Agreement.

          Executive is willing to accept such employment and perform services for
the Company, on the terms and conditions hereinafter set forth.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

          1. Employment.

          1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the term hereof as its Senior Vice President,
Chief Administrative Officer. In his capacity as Senior Vice President, Chief
Administrative Officer of the Company, Executive shall report to the Chief
Executive Officer of the Company (the “CEO”) and shall have the customary
powers, responsibilities and authorities of a Senior Vice President, Chief
Administrative Officer for corporations of the size and character of the
Company, as it exists from time to time, and as are assigned by the COO.

          1.2 Subject to the terms and conditions of this Agreement, Executive
hereby accepts employment with the Company commencing on a date that is
mutually agreeable to the Company and Executive that is no later than April 26,
2004 (the “Commencement Date”) and agrees to devote his full working time and
efforts, to the best of his ability, experience and talent, to the performance
of services, duties and responsibilities in connection therewith. Executive
shall perform such duties and exercise such powers, commensurate with his
position, as the COO

 

 

shall from time to time delegate to him on such terms and
conditions and subject to such restrictions as the board of directors of the
Company (the “Board”) may reasonably from time to time impose.

          1.3 Nothing in this Agreement shall preclude Executive from engaging, so
long as, upon prior notice to the Board and in the reasonable determination of
the Board, such activities do not interfere with his duties and
responsibilities hereunder, (a) in charitable and community affairs, from
managing any passive investment made by him in publicly traded equity
securities or other property (provided that no such investment may exceed 5% of
the equity of any entity) or, (b) subject to Section 12(b) hereof, from serving
as a member of boards of directors or as a trustee of any other corporation,
association or entity.

          2. Term of Employment. Executive’s term of employment under this
Agreement shall commence on the Commencement Date and, subject to the terms
hereof, shall terminate on the earlier of (i) the fifth anniversary of the
Commencement Date (the “Termination Date”) or (ii) the termination of
Executive’s employment pursuant to this Agreement; provided, however, that,
unless earlier terminated as a result of Executive’s termination of employment,
this Agreement shall automatically renew for one additional year following the
Termination Date unless, at least 90 days prior to the Termination Date,
Executive provides written notice to the Company of his intention not to
continue his employment with the Company for such additional year; provided,
further, that (A) any other termination of employment by Executive (other than
for death, Permanent Disability or Good Reason) may only be made upon 90 days
prior written notice to the Company and any termination of employment by
Executive for Good Reason may only be made upon 30 days prior written notice to
the Company and (B) any termination of employment by the Company for any reason
may only be made upon 30 days prior written notice to Executive.

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          3. Compensation.

          3.1 Salary. The Company shall pay Executive a base salary (“Base Salary”)
at the rate of $250,000 per annum commencing as of the Commencement Date. Base
Salary shall be adjusted annually at the discretion of the Board but in no
event shall 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, as it exists from time to time, and, as increased, shall constitute
“Base Salary” hereunder. Base Salary shall be payable in accordance with the
ordinary payroll practices of the Company.

          3.2 Discretionary Bonus. During the term of Executive’s employment
hereunder, Executive shall be eligible to receive an annual bonus (the “Bonus”)
of up to seventy-five percent (75%) of Executive’s Base Salary (the “Maximum
Bonus”), the amount of such Bonus to be determined by the Board of Directors of
the Company in its sole discretion based on the Company’s performance and the
Board’s assessment of Executive’s performance for such fiscal year. Executive
must be employed by the Company on the day the Bonus is awarded in order to be
eligible to receive a Bonus for such fiscal year.

          3.3 Signing Bonus. The Company shall pay Executive a lump sum payment of
$[   ] on the Commencement Date.

          3.4 Compensation Plans and Programs. Executive shall be eligible to
participate in any compensation plan or program maintained by the Company from
time to time, which compensation plans and programs are intended to be
comparable to those currently maintained by the Company, in which other senior
executives of the Company participate on terms that are intended to be
comparable to those applicable to such other senior executives.

          4. Employee Benefits.

          4.1 Employee Benefit Programs, Plans and Practices. The Company shall
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
(commensurate with his positions in the Company from time to time and to the
extent permitted under any employee

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benefit plan) in accordance with the terms
thereof, which the Company makes available to its senior executives and which
employee pension and welfare benefit programs, plans and practices that are
intended to be comparable to those currently maintained by the Company.

          4.2 Vacation and Fringe Benefits. Executive shall be entitled to no less
than the number of business days paid vacation in each calendar year which have
historically been provided to the Company’s Senior Vice President, Chief
Administrative Officer, which shall be taken at such times as are consistent
with Executive’s responsibilities hereunder. In addition, Executive shall be
entitled to the perquisites and other fringe benefits currently made available
to senior executives of the Company, commensurate with his position with the
Company.

          4.3 Relocation Expenses. Executive shall become a full-time resident of
the Charlotte, North Carolina area no later than six (6) months after the
Commencement Date and shall relocate his family to the Charlotte, North
Carolina area as soon as practicable thereafter. The Company shall reimburse
Executive for all reasonable relocation expenses incurred by Executive and his
family upon presentation by Executive of appropriately itemized and approved
(consistent with the Company’s policy) accounts of such expenditures. In
addition, the Company shall reimburse Executive for the real estate brokerage
commission on the sale of Executive’s current principal residence in Florida.

          5. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such
duties and responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of appropriately
itemized and approved (consistent with the Company’s policy) accounts of such
expenditures.

          6. Termination of Employment.

          6.1 Termination By the Company Without Cause or By Executive for Good
Reason. (a) The Company may terminate Executive’s employment at any time for
any reason. If Executive’s employment is
terminated by the Company without Cause (as defined in Section

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6.4 hereof)
(other than as a result of Executive’s death or Permanent Disability (as
defined in Section 6.2 hereof)) or if Executive terminates his employment for
Good Reason (as defined in Section 6.1(c) hereof) prior to the Termination
Date, Executive shall receive such payments, if any, under applicable plans or
programs, including but not limited to those referred to in Section 3.4 hereof,
to which he is entitled pursuant to the terms of such plans or programs. In
addition, in connection with such termination Executive shall be entitled to
receive the following: (i) an amount equal to one times Executive’s Base
Salary at the annual rate as of the date of termination under this Section
6.1(a), payable over the twelve month period following the Termination Date in
substantially equal installment payments and in accordance with the normal
payroll practices of the Company; (ii) a cash lump sum payment in respect of
(x) accrued but unused vacation days (the “Vacation Payment”), (y) compensation
earned but not yet paid (including any awarded but deferred Bonus payments)
(the “Compensation Payment”) and (z) reasonable expenses incurred under Section
5 but not yet reimbursed (the “Expense Payment”); and (iii) continued coverage
under any employee medical, disability and life insurance plans in accordance
with the respective terms thereof for a period ending on the earlier of the
first anniversary of the date of termination under this Section 6.1(a) or (B)
the date on which Executive becomes covered under comparable benefit plans of a
new employer.

          (b) The Vacation Payment, the Compensation Payment, and the Expense
Payment shall be paid by the Company to Executive within 30 days after the
termination of Executive’s employment by check payable to the order of
Executive or by wire transfer to an account specified by Executive.

          (c) For purposes of this Agreement, “Good Reason” shall mean any of the
following (without Executive’s express prior written consent):

     (i) A substantial reduction by the Company of Executive’s
duties or responsibilities, other than in connection with the
termination of Executive’s employment by the Company for Cause, by
Executive without Good Reason or as a result of Permanent
Disability or Executive’s death;

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     (ii) A reduction by the Company in Executive’s Base Salary;
or

     (iii) A reduction or elimination of Executive’s eligibility
to participate in any of the Company’s employee benefit plans that
is inconsistent with the eligibility of similarly situated
executives of the Company to participate therein.

          6.2 Permanent Disability. If Executive becomes totally and permanently
disabled (as defined in the Company’s Long-Term Disability Benefit Plan
applicable to senior executive officers as in effect on the date hereof)
(“Permanent Disability”), the Company or Executive may terminate Executive’s
employment on written notice thereof, and Executive shall receive or commence
receiving, as soon as practicable:

     (i) amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company
maintains during the term hereof;

     (ii) the Maximum Bonus in respect of the fiscal year in which his
termination occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until termination and the denominator
of which is 365;

     (iii) the Vacation Payment, the Compensation Payment, and the
Expense Payment; and

     (iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.4
hereof, to which he is entitled pursuant to the terms of such
plans or programs.

          6.3 Death. In the event of Executive’s death during the term of his
employment hereunder, Executive’s estate or designated beneficiaries shall
receive or commence receiving, as soon as practicable:

     (i) the Maximum Bonus in respect of the fiscal year in which his
death occurs, prorated by a fraction, the numerator of which is the
number of days of the fiscal year until his death and the denominator of
which is 365;

     (ii) any death benefits provided under the employee benefit
programs, plans and practices referred to in Section 4.1 hereof,
in accordance with their terms;

     (iii) the Vacation Payment, the Compensation Payment, and the
Expense Payment; and

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     (iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.4
hereof, to which Executive’s estate or designated beneficiaries
are entitled pursuant to the terms of such plans or programs.

          6.4 Termination By the Company for Cause or By Executive without Good
Reason. (a) The Company shall have the right to terminate the employment of
Executive for Cause. In the event that Executive’s employment is terminated by
the Company for Cause, as hereinafter defined, or by Executive without Good
Reason (other than as a result of Executive’s Permanent Disability or death),
prior to the Termination Date, notwithstanding any other provision in this
Agreement, Executive shall be entitled only to the Compensation Payment, the
Vacation Payment, and the Expense Payment, and shall not be entitled to any
further compensation or benefits hereunder
including, without limitation, the payment of any Bonus in respect of all or
any portion of the fiscal year in which such termination occurs.

          (b) As used herein, the term “Cause” shall be limited to (i) willful
misconduct by Executive which results in a demonstrable injury (which is other
than de minimis or insignificant) to the Company, (ii) willful and continued
failure by Executive to perform his material duties with respect to the Company
or its subsidiaries, which failure continues beyond 10 days after a written
demand for substantial performance of such duties was given to Executive by the
Company, or (iii) Executive’s conviction of, or plea of nolo contendere to, a
felony or to a misdemeanor involving moral turpitude. Termination of Executive
pursuant to this Section 6.4 shall be made by delivery to Executive of written
notice that, in the reasonable judgment of the Board, Executive was guilty of
conduct set forth in any of clauses (i) through (iii) above and specifying the
particulars thereof.

          7. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder.

          8. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:

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          To the Company:

	 	 	 
	 

	 	MedCath Corporation
	

	 	10720 Sikes Place, Suite 300
	

	 	Charlotte, North Carolina 28277
	

	 	Attn: Chief Executive Officer

          with a copy to:

	 	 	 
	 

	 	MedCath Corporation
	

	 	c/o Kohlberg Kravis
	

	 	Roberts & Co.
	

	 	2800 Sand Hill Road
	

	 	Suite 200
	

	 	Menlo Park, California 94025
	

	 	(Attn: Edward A. Gilhuly)

          with a copy to:

	 	 	 
	 

	 	Hal A. Levinson, Esq.
	

	 	Moore & Van Allen, PLLC
	

	 	100 N. Tryon Street, Floor 47
	

	 	Charlotte, North Carolina 28202-4003

          To Executive:

	 	 	 	 	 
	 

	 	Grant Wicklund	 	 
	

	 	

	 	 
	 

	 	

	 	 

Any such notice or communication shall be delivered by hand, by telecopy (with
machine confirmation) or by courier or sent certified or registered mail,
return receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in a notice duly delivered as described
above), and the third business day after the actual date of mailing shall
constitute the time at which notice was given.

          9. Separability; Legal Fees. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which
shall remain in full force and effect. Each party shall bear the costs of any
legal fees and other fees and expenses which may be incurred in respect of
enforcing its respective rights under this Agreement.

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          10. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or
obligations hereunder shall be assignable or otherwise subject to hypothecation
by Executive (except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.

          11. Amendment. This Agreement may only be amended by written agreement of
the parties hereto.

          12. Nondisclosure of Confidential Information; Non-Competition. (a) At
any time during or after Executive’s employment with the Company, Executive
shall not, without the prior written consent of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership, corporation
or other entity any Confidential Information (as hereinafter defined)
pertaining to the business of the Company or any of its subsidiaries, except
(i) while employed by the Company, in the business of and for the benefit of
the Company, or (ii) when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
business of the Company, or by any administrative body or legislative body
(including a
committee thereof) with jurisdiction to order Executive to divulge, disclose or
make accessible such information. For purposes of this Section 12(a),
“Confidential Information” shall mean non-public information concerning the
financial data, strategic business plans, and other non-public, proprietary and
confidential information of the Company, its subsidiaries, Kohlberg Kravis
Roberts & Co., Welsh, Carson, Anderson & Stowe VII, L.P., or their respective
affiliates as in existence as of the date of Executive’s termination of
employment (collectively, the “Restricted Group”) that, in any case, is not
otherwise available to the public (other than by Executive’s breach of the
terms hereof). Confidential Information further includes without limitation
customer information, vendors, operations and operating procedures, pricing,

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financial information, technology, marketing strategies, design of facilities,
employment practices, contractual agreements, and trade secrets.

          
Executive agrees that both while employed by the Company and following
termination of Executive’s employment with the Company at any time in the
future:

     (i) Executive will take all reasonable precautions to safeguard all
Confidential Information at all times so that it is not communicated to,
exposed to, available to, or taken by any unauthorized person and will
personally use or disclose such information; and

     (ii) Executive will exercise Executive’s best efforts to assure the
safekeeping of the Company’s Confidential Information.

        
  Upon termination of Executive’s employment with the Company, Executive
agrees to immediately return to the Company all Confidential Information and
other Company property, including without limitation all originals, copies,
computer data, or other records or information. It is understood and agreed
that Confidential Information and other property of the Company shall remain at
all times the property of the Company.

          (b) Non-Competition Agreement. Recognizing the fact that Executive will
be given or have access to the Confidential Information described in this
Section 12 above, and that Executive owes a duty of full loyalty to the Company
and it’s name, reputation and operational interests, Executive agrees that
during the period of Executive’s employment with the Company, Executive will
not engage in or have an interest in, either directly or indirectly, in any
manner, whether as a shareholder, partner, owner, investor, officer, director,
advisor, employee, consultant, or in any other capacity, any Competitive
Business other than an ownership position of less than 5 percent in any company
whose shares are publicly traded.

          Executive agrees that in the event that Executive’s employment with the
Company is terminated for any reason by either party, for a period of one (1)
year from the date of termination of employment, Executive will not engage in
or have an interest in, either directly or indirectly, in any manner, whether
as a shareholder, partner, owner, investor, officer, director, advisor,
employee, consultant, or in any other capacity, any Competitive Business (other
than an

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ownership position of less than 5 percent in any company whose shares
are publicly traded) which:

     (i) is located or operates within fifty (50) miles of:

     (A) any one of the Company’s or its affiliates’
facilities or a location where the Company or one of its
affiliates has provided services during the term of
Executive’s employment with the Company, or

     (B) any location where the Company was actively
developing a facility or service before the termination of
Executive’s employment with the Company; or

     (ii) is located in the United States.

          Executive further agrees that in the event that Executive’s employment
with the Company is terminated for any reason by either party, for a period of
one (1) year from the date of termination of employment, Executive shall not,
on his own behalf or on behalf of any person, firm or company, directly or
indirectly, solicit or offer employment to any person who has been employed by
the Company or its subsidiaries at any time during the twelve (12) months
immediately preceding such solicitation.

          For purposes of this Section 12, “Competitive Business” shall be defined
as a hospital or any other health care employer, facility, or service providing
cardiology related facilities or services.

          (c) Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances, and further agree that if in the
opinion of any court of competent jurisdiction such restraint is not reasonable
in any respect, such court shall have the right, power and authority to excise
or modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
amended. Executive agrees that any breach of the covenants contained in this
Section 12 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this
Agreement and obtain an injunction against Executive from

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any court having
jurisdiction over the matter restraining any further violation of this
Agreement by Executive.

          13. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following Executive’s death, and may change such election, in either case by
giving the Company written notice thereof. In the event of Executive’s death
or a judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative. Any reference to the masculine gender in
this Agreement shall include, where appropriate, the feminine.

          14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations,
including the provisions of Section 12 herein. The provisions of this Section
14 are in addition to the survivorship provisions of any other section of this
Agreement.

          15. Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of North Carolina without
reference to rules relating to conflicts of law.

          16. Effect on Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes in all respects any
prior or other agreement or understanding between the Company or any affiliate
of the Company and Executive.

          17. Withholding. The Company shall be entitled to withhold from payment
any amount of withholding required by law.

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          18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.

	 	 	 	 	 
	 	MEDCATH CORPORATION

 	 
	 	By:  	/s/ Charles R. Slaton
 	 
	 	Title: 	 Chief Operating Officer 	 

	 	 	 	 	 
	 	/s/ Grant Wicklund
 	 
	 	Grant Wicklund 	 
	 	 	 
	 

13Ex-10.55

 

Healthcare Management Consulting • Project Development • Ventures

October 30, 2003

Mr. John T. Casey

President and CEO

MedCath Corporation

10720 Sikes Place, Suite 300

Charlotte, NC 28277

Dear John:

In our phone conversation yesterday (October 29), you requested that SSB
develop a proposal to work with you and your senior management team in a series
of strategic planning sessions over the next 6-8 weeks. The purpose of these
planning sessions would be to help you and your team refine the vision for
MedCath and develop a robust strategic direction that propels the Company
forward while adding value for MedCath shareholders. Key to this strategic
direction will be prioritization of:

	1.	 	The current asset portfolio (i.e.,
maintenance/enhancement/divestiture); and
	 
	2.	 	Near-term product-service opportunities viewed through the prism of
capital requirements, cycle time to revenue and magnitude of return.

Context

MedCath financial performance over the past year has lagged Wall Street’s and
the Board’s expectations. Several months ago, the Board decided to make a
change in management. You were appointed CEO, and you brought in a new COO,
Charlie Slaton. While the new management team has been in place for less than
two months, your team has already initiated the analytical process to refine
the vision and determine strategic direction. It is your intent to complete
and be in position to communicate the new vision within two to three months.

Chairman: Jacque J. Sokolov, MD

14811 N. Kierland Blvd, Ste 500, Scottsdale, AZ 85254

Tel: 480-707-4521 - JJSPSO@aol.com

	 	 	 	 	 	 	 
	President: Mike Treacy

	 	Managing Consultant: Chris Schaefer
	 	Managing Consultant: Ted Schwab
	 	Sr. Admin Consultant: Martha Valverde
	1287 Tressler Drive

	 	8006 North Bridge Way
	 	16 A - Dudley Avenue
	 	15 Venezia
	Fort Washington, PA 19034

	 	Maumee, Ohio 43537
	 	Venice, California 90291
	 	Newport Coast, CA
	Tel: 215-542-2412

	 	Tel: 419-865-1948
	 	Tel: 310-401-0068
	 	Tel: 562-595-9595 Ext: 8
	miketreacy@att.net

	 	adbeckcons@worldnet.att.net
	 	tjschwab@earthlink.net
	 	hcca@pacbell.net

 

 

MedCath Engagement Letter

October 30, 2003

Page 2

For nearly a year, the Company’s business model has been threatened by
potential legislative changes that would outlaw or severely curtail physician
ownership of specialty hospitals. Congressional conference committee
negotiations have been underway for months, and the uncertainty surrounding the
outcome of this issue has clouded the Company’s business as well as your team’s
planning. Fortunately, it appears that the issue will be resolved soon, and
that there will still be viable options for physician partnerships.

To support your business planning, you and your management team held a planning
retreat last week at The Greenbrier Resort. SSB had the opportunity to meet
with you and the team for half a day on Friday morning to discuss issues,
challenges and opportunities. The exchanges and interactions that occurred in
that meeting were productive and useful, and form the basis for potential
further interactive planning discussions between SSB and MedCath.

In our meeting with you, we learned that MedCath is nearing completion of a
major expansion (five new hospitals), and is currently constrained in terms of
capital available for new investments.

We also learned that the Company is at a cross-roads decision point relative to
several key issues, including:

	1.	 	What to do with each component in the current asset portfolio
(i.e., maintenance vs. enhancement vs. divestiture).
	 
	2.	 	Prioritization of capital and cash flow relative to
short-term, high-impact investment opportunities, characterized by a
desire to:

	•	 	Reduce capital requirements;
	 
	•	 	Shorten cycle time to revenue; and
	 
	•	 	Increase magnitude of return.

The Company faces many opportunities for growth and expansion. The challenge
will be to assess them accurately and make critical prioritization decisions
that propel the Company forward within resource and timing constraints, as
indicated above. The opportunities mentioned so far are include these:

	•	 	Implementing the current business model in new markets;
	 
	•	 	Acquiring existing facilities (and modifying them) in lieu of
developing new facilities;
	 
	•	 	Partnering with select non-profit hospitals in the
co-development of new heart hospitals or CV service line expansion;
	 
	•	 	Expanding the service line offerings of current and future
business units;
	 
	•	 	Expansion into peripheral vascular disease treatment and
management in appropriate settings;
	 
	•	 	Placement of diagnostic CV-MRI capabilities in appropriate
facilities.

 

 

MedCath Engagement Letter

October 30, 2003

Page 3

Finally, as we discussed at length at The Greenbrier, the Company faces
increasing competition from hospitals and hospital systems who recognize the
need to fight more aggressively to protect established cardiovascular (and
other specialty) service lines. MedCath has a strong and proven business
model, but the competitive environment will be intensifying. An important
question for the Company is to determine what will differentiate MedCath from
its competitors—for physicians, patients and families.

Proposal for SSB Consulting Engagement

Areas Where SSB Can Be of Greatest Assistance

In our discussions with you, you indicated that the areas where SSB could be of
greatest assistance to MedCath are the following:

	•	 	Serving as an independent, outside, objective sounding board
to review and critique plans and decisions being made by your team.
	 
	•	 	Organizing a “catalyst” planning experience that will enable
you and your team to reach key decisions in the next 6-8 weeks
regarding refinement of the Company’s vision, determination of
strategic direction, and prioritization of investment and growth
opportunities, which in combination will lay the foundation for
actions that will boost the Company’s financial performance.

Series of Planning Sessions

To meet your needs, we are proposing a series of four planning sessions with
you and your management team, starting next week. Each session will be a day
to a day and a half long. The first two sessions have been tentatively
scheduled; precise dates still need to be set for the third and fourth
sessions. Hence, the proposed schedule would be as follows:

	 	 	 
	Session 1

	 	November 4-5
	Session 2

	 	November 17-18
	Session 3

	 	Early December
	Session 4

	 	Mid-December

Deliverables

The goal for this planning process is for you and your management team to have
in place by the Christmas holidays the following items:

	•	 	A compelling vision and strategic direction for the Company’s
future;
	 
	•	 	An evaluation and prioritization of the Company’s strategic
investment opportunities;
	 
	•	 	A plan for differentiating MedCath in the market; and
	 
	•	 	A game plan for moving forward.

 

 

MedCath Engagement Letter

October 30, 2003

Page 4

SSB Activities, Role and Responsibilities

For each planning session, SSB will do the following:

	•	 	Work with you to determine the focal points and Agenda;
	 
	•	 	Review background material as provided by you and your team;
	 
	•	 	Engage in our own internal brainstorming sessions—involving
all four senior members of the SSB team—in preparation for the
meeting with you and your team;
	 
	•	 	Attend and facilitate the planning sessions in Charlotte
(both myself and Mike Treacy will attend the meetings in person; to
hold down expenses, Chris Schaefer and Ted Schwab will participate
by speakerphone when appropriate and available);
	 
	•	 	Record and prepare a written summary of the results of the meeting;
	 
	•	 	Lead the planning effort for the subsequent planning session.

SSB Qualifications

We believe SSB is uniquely qualified to assist MedCath Hospital with strategic
planning. SSB has a wealth of experience helping organizations with
sophisticated cardiovascular and other specialty service line strategies.
SSB’s specific project experience services is described on our website at
www.ssbsolutions.com. SSB is a highly-specialized firm of senior health care
experts who bring creative solutions to a variety of healthcare organizations
facing particularly challenging issues. Organizations turn to SSB at times of
peril or stress, when ordinary solutions aren’t working, or when there is a
need for imagination, creativity and leadership. SSB’s team is known for
delivering creative, unexpected, visionary solutions that are implementable.

The firm is headed by me. I have an extensive clinical background (in
cardiology) and am a seasoned healthcare executive, experienced consultant and
advisor, and nationally-recognized speaker and commentator. Supplementing me
at SSB is a core team of talented senior health care experts, plus a
hand-picked network of experts in a variety of key healthcare niche fields.

SSB offers its clients and venture partners the following advantages:

	•	 	High-impact, rapid deployment team of executives and consultants;
	 
	•	 	Vision and creativity;
	 
	•	 	A unique perspective;
	 
	•	 	Leadership;
	 
	•	 	Credibility and rapport with key constituencies, including
physicians, board members, and investors;
	 
	•	 	An extensive network of contacts in all facets of healthcare; and
	 
	•	 	Exceptional professionalism and integrity.

 

 

MedCath Engagement Letter

October 30, 2003

Page 5

SSB Consulting Team

The SSB consulting team that will work with you and your team at MedCath is
well-suited to this assignment. The team members are listed below, and bios
for them are set forth on our website at www.ssbsolutions.com.

Consulting Team Members

	 	 	 
	Jacque J. Sokolov, MD

	 	Overall project leader; lead consultant
	Michael E. Treacy, JD

	 	Project manager; senior consultant
	Christopher A. Schaefer

	 	Senior consultant
	Ted J. Schwab

	 	Senior consultant

Project Budget

SSB is proposing a flat fee of $12,500 per planning session, plus expenses.

SSB will submit an invoice for our services, including expenses, immediately
following each planning session. If, for any reason, you have questions about
our billings, please contact us at the earliest possible time after receipt of
our statement. Accordingly, if we do not hear from you shortly after your
receipt of our statement, we will assume there are no questions.

Our normal expense policies are as follows. Travel expenses are billed at
cost, including airfare (coach), auto rental and other transportation (taxi,
etc.). Mileage for driving personal cars is charged at the IRS allowable rate.
All invoices will also include a standard charge equal to 2.5% of fees for
miscellaneous costs expended on our client’s behalf, such as facsimile
transmissions, overnight express, photocopies, on-line research, and
long-distance and mobile telephone usage. Experience has shown this to be the
most fair and practical way of recognizing expenses of this type.

There will be no charge for “travel-time” in connection with this engagement.

For the Las Vegas presentation on November 15, we will bill you for expenses
only.

Closing

If you agree to the terms of this Letter of Engagement, please sign both
enclosed copies and return one to me as soon as possible.

 

 

MedCath Engagement Letter

October 30, 2003

Page 6

On behalf of SSB, let me thank you for this opportunity to work with MedCath.
We are looking forward to getting started with you on November 4-5, and to
working with you and your team on this important and challenging assignment.

Sincerely,

SOKOLOV, SOKOLOV, BURGESS

By: Jacque J. Sokolov, MD

Chairman

The undersigned agrees to the engagement of Sokolov, Sokolov, Burgess according
to the terms described in this Engagement Letter.

     MEDCATH CORPORATION

	 	 	 	 	 	 	 
	By:

	 	

	 	Date:
	 	

	

	 	John T. Casey	 	 	 	 
	

	 	President and CEO

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