Buy Sell Agreement Checklist for Physician Group Practice

October 19, 2008

___ Agreement addresses the following events requiring a buyout:

          Death

          Disability

          Retirement

          Voluntary and involuntary termination

___ Agreement specifies the number of months of disability after which an owner is required to give up ownership in the practice.

___ Agreement specifies (if owners so desire) the age requirement before a physician can retire from the group (for example, to qualify for retirement, a physician must be at least 62 years old; otherwise the withdrawal is considered voluntary).

___ In the case of a voluntary withdrawal, agreement specifies how much notice is required.

___ In the case of a voluntary withdrawal, agreement specifies whether there will there be penalties to the buyout price if the owner forms a competing practice, joins a competing practice, or violates the employment contract.

___ The agreement decides whether or not to assess a covenant not to compete provision.

___ In the case of an involuntary withdrawal, agreement specifies how much notice is required.

___ Agreement specifies the required vote to admit a new physician into the group.

___ Agreement specifies the required vote to remove an owner, if applicable.

___ Decide buy out price and reasonableness of the buyout price of an ownership interest has been reviewed.

___ If the buyout price is to be based on an appraised value, the qualifications of the appraiser have been assessed.

___ Agreement specifies, based on the current practice environment, whether goodwill should be paid to a departing owner.

___ The manner in which the buyout price will be paid has been established and reviewed.

___ The tax consequences of the buyout provisions have been reviewed.

___ The buyout amount has been calculated for each owner using the current formula in the agreement.

___ Each owner has reviewed the calculations.

___ All parties agree to the reasonableness of the buyout amounts.

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