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Nonshareholder Surgeons
Petitioner also employs nonshareholder surgeons. Typically,
a nonshareholder surgeon is hired for a period of 2 years.
During that 2-year period, a nonshareholder surgeon is expected
to obtain his certification as a pediatric surgeon, meet members
of the medical community, and become part of the established
referral network. At the end of the 2-year period, a
nonshareholder surgeon may purchase from the existing shareholder
surgeons an equal interest in the shares of petitioner and, thus,
become a shareholder surgeon. Both Drs. Miller and Black
followed that path to becoming shareholder surgeons.
During the audit years, petitioner employed two surgeons who
were not shareholders: Dr. Charles Snyder, from July 15, 1992,
until July 14, 1994, and Dr. Glaze Vaughan, from July 1, 1995,
until June 30, 1997 (collectively, the nonshareholder surgeons).
Dr. Vaughan, but not Dr. Snyder, became a shareholder surgeon at
the end of the period described.
The employment of the nonshareholder surgeons was governed
by employment agreements with similar terms (the nonshareholder
employment agreements). Among those terms are the following:
The term of the agreement is 2 years, but shall continue on a
year-to-year basis if the board agrees to accept the
nonshareholder surgeon as a partner. The monthly salary of each
(for the term) is fixed, $12,000 for Dr. Snyder and $12,500 for
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Last modified: May 25, 2011