P3 HEALTH PARTNERS INC. : Change of Directors or Principal Officers, Financial Statements and Supporting Documents (Form 8-K)

Section 5.02. Departure of directors or certain managers; Election of directors; Appointment of certain officers; Compensatory provisions of certain executives.

On May 13, 2022the board of directors of P3 Health Partners Inc. (“TopCo”) and its subsidiary, P3 Health Group Management, LLC (with TopCo, the “Company”) has approved the entering into of employment agreements (the “Employment Agreements”) and deal bonus agreements (the “Trade Bonus Agreements”) with Cherif Abdou (founder and managing director) and Amir Bacchus (Founder and Chief Medical Officer) (each, an “Executive”).


Employment Agreements


Employment contracts replace the employment contracts that Drs. Abdou and Bacchus previously concluded.

The initial term of each employment contract will end on January 1, 2025, and the term will automatically renew for successive one-year terms unless written notice of non-renewal is given by either party (such term, the “Term “). In addition, during the term of employment, as long as Dr Abdou or Dr. Bacchus serve as Chief Executive Officer or Chief Medical Officer, respectively, of TopCo, TopCo will nominate the Executive for re-election as a member of the Board of Directors. Under employment contracts, Dr Abdou reports to the TopCo Board of Directors and Dr. Bacchus reports to the Managing Director of TopCo.

Employment contracts provide for an annual base salary ($800,000 in the case of Dr Abdou and $600,000 in the case of Dr. Bacchus) and eligibility to earn a targeted annual bonus at 100% of the executive’s annual base salary. Executives are entitled to participate in any benefit plan adopted by the Company, and the Company has agreed to maintain short-term and long-term disability insurance coverage for Drs. Abdou and Bacchus for the duration of their respective employment.

Under the employment agreements, if the executive’s employment is terminated without “cause” by the company or by the executive for “cause” (each, as defined in the employment agreements), then, in addition to the amounts accrued, the Executive will be entitled to receive the following severance and benefits, subject to the timely execution (and non-revocation) by the Executive and the Company of a mutual release of claims:

Cash compensation in a total amount equal to one and a half times the sum

   of the Executive's (i) annual base salary then in effect and (ii) target annual
   bonus amount, payable in equal installments over an 18-month period following
   the date of termination.



· Company-sponsored COBRA premiums for up to 18 months.

If the Executive’s employment is terminated without “cause” by the Executive, then, in addition to the accrued amounts, the Executive will be entitled to receive cash severance in an aggregate amount equal to one time and half the sum of (i) the annual base salary then in effect and (ii) the amount of the target annual bonus, payable in equal installments over a period of 18 months following the date of termination of employment.

In addition, if the executive’s employment is terminated due to his death, then, in addition to the accrued amounts, the executive will be entitled to receive a prorated portion of his target bonus for the year of termination. .

Employment contracts contain customary confidentiality and mutual non-disparagement provisions, as well as a standard non-competition restriction in effect during employment and for 18 months thereafter and non-solicitation of service provider restrictions. services/customers in effect during employment and for 24 months thereafter.

The previous description of employment contracts with Drs. Abdou and Bacchus is not complete and is qualified in its entirety by the terms of the applicable agreement, copies of which are filed herein as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.


Transaction Bonus Agreements


Transaction bonus agreements provide for the payment of bonuses in a total amount equal to $6,300,000 (Dr Abdou) and $3,700,000 (Dr. Bacchus) in connection with the completion of the business combination which resulted in TopCo becoming the sole managing partner of P3 Health Group, LLC (each, a “Trading Bonus”).

In accordance with the deal bonus agreements, the first payout of the deal bonus ($3,300,000 for Dr Abdou and $1,700,000 for Dr. Bacchus) will be paid within five days of signing the transaction bonus agreement. The second payment of the transaction bonus ($3,000,000 for Dr Abdouand $2,000,000 for Dr. Bacchus) (the “Second Installment”) will be paid on December 15, 2022. The second installment will not be paid if the officer’s employment is terminated for “cause” by the Company or without “cause” by the officer prior to the payment date. If the Executive fails to comply with the terms of the Deal Bonus (as described below), the Executive will be required to repay the Deal Bonus (or forfeit any portion of the Deal Bonus that has not yet been paid ).

The terms of the transaction bonus include: (i) a restriction on the executive’s ability to offer, sell or announce his intention to dispose of Class A ordinary shares of the company until the closing of the first subscription offer and the sale of common shares of the Company (the “First Secondary Sale”); (ii) a requirement that, following the first secondary sale, the executive will only sell Class A common stock of the company pursuant to a customary 10b5-1 plan; and (iii) a limit on the number of Class A common shares that the executive can sell under this 10b5-1 plan. These restrictions apply to Class A common stock held directly by the executive or in a trust established by the executive.

The previous description of transaction bonus agreements with Drs. Abdou and Bacchus is not complete and is qualified in its entirety by the terms of the applicable agreement, copies of which are filed herewith as Exhibits 10.3 and 10.4, respectively, and incorporated herein by reference.

Item 9.01 Financial statements and supporting documents.



(d) Exhibits



Exhibit    Description
Number
  10.1       Employment Agreement, by and among P3 Health Partners Inc., P3 Health
           Group Management, LLC and Dr. Sherif Abdou.
  10.2       Employment Agreement, by and among P3 Health Partners Inc., P3. Health
           Group Management LLC and Dr. Amir Bacchus.
  10.3       Transaction Bonus Agreement, by and among P3 Health Partners Inc., P3
           Health Group Management, LLC and Dr. Sherif Abdou.
  10.4       Transaction Bonus Agreement, by and among P3 Health Partners Inc., P3.
           Health Group Management, LLC and Dr. Amir Bacchus.
104        Cover Page Interactive Data File (embedded within the Inline XBRL
           document).

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