EXHIBIT 10.12
This Agreement made effective the 1st date of April 2003
By and Among:
EmCare Holdings, Inc., a Delaware corporation ("EmCare")
and
Xxx X. Xxxxxx (the "Executive")
WHEREAS, EmCare desire that the Executive enter into employment with EmCare and
the Executive desires to be employed by EmCare;
NOW THEREFORE, the parties have agreed that the terms and conditions of the
relationship shall be as follows:
ARTICLE 1 -- DEFINITIONS
Whenever used in this Agreement, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word is
capitalized:
(a) "Agreement" means this employment agreement, as amended from time to
time.
(b) "Base Salary" means the salary of record paid to the Executive as
annual salary, and as further indicated in paragraph (a) of Article 4
(Compensation).
(c) "CEO" shall mean the Chief Executive Officer of EmCare.
(d) "Cause" means the Executive's:
(i) Willful and continued failure to perform substantially the
Executive's duties with EmCare;, which failure is not cured
within thirty (30) days after EmCare delivers to the Executive
written demand for substantial performance, specifically
identifying the manner in which the Executive has not
substantially performed his duties;
(ii) Conviction of an indictable offense; or
(iii) Willfully engaging in illegal conduct or gross misconduct
which is materially and demonstrably injurious to EmCare.
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For purposes of this paragraph and Article 13, no act or omission by
the Executive shall be considered "willful" unless it is done or
omitted in bad faith or without reasonable belief that the Executive's
action or omission was in the best interests of EmCare.
(e) "Effective Date" means April 1, 2003.
(f) "EmCare" shall mean EmCare Holdings, Inc., a Delaware corporation. and
a wholly owned subsidiary of LINC.
(g) "Executive" shall mean Xx. Xxx X. Xxxxxx.
(h) "LINC" shall mean Xxxxxxx Inc., a corporation incorporated under the
laws of Canada, including any and all subsidiaries (other EmCare) or
any successor thereto.
(i) "Committee" shall mean the Compensation Committee of Board LINC.
ARTICLE 2 -- TERM OF THE AGREEMENT
The term of this Agreement shall commence on the Effective Date and shall
continue until terminated in accordance with Article 6 hereof.
ARTICLE 3 -- TITLE; COMMENCEMENT OF EMPLOYMENT; REPORTING
The Executive shall serve as the President and Chief Operating Officer of
EmCare. The Executive's employment shall commence on the Effective Date. The
Executive shall report to the CEO of EmCare.
ARTICLE 4 -- COMPENSATION
(a) Unless otherwise provided, all dollar amounts set forth in this
Agreement shall be in United States Dollars. The Base Salary of the
Executive for his services shall be at the annualized rate of $375,000.
The Base Salary shall be paid equally over twenty-four equal pay
periods consistent with EmCare's policy. The Base Salary shall be
reviewed annually during LINC's normal review period. The review will
be undertaken by assessing the Executive's achievement of the overall
objectives established by the CEO in consultation with the Executive
and with regard to the market rates of remuneration paid for similar
duties and responsibilities.
(b) The Executive will be eligible to participate in a short term incentive
plan. For fiscal years commencing September, 2002 and thereafter, the
Executive's target bonus under such plan shall be 50% of Base Salary
and the maximum bonus shall be 100% of Base Salary. The Executive's
right to receive any bonus under such plan shall be determined
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based on qualitative and quantitative measurements established by the
CEO and the Committee after consultation with the Executive and as set
forth in accordance with such plan.
(c) The Executive shall participate in The Supplemental Executive
Retirement Plan (the "Supplemental Plan") sponsored by LINC for the
benefit of its U.S. employees, for so long as LINC maintains such plan.
(d) Upon (1) a Sale of EmCare (as defined in this paragraph (e)) or (2) an
IPO of EmCare Stock (as defined in this paragraph (e)), the Executive
shall be entitled to the EmCare Bonus (as defined in this paragraph
(e)) if the Value of EmCare (as defined in this paragraph (e)) exceeds
$125 million and if the Executive remains employed under this Agreement
upon the occurrence of the event described in (1) or (2).
In the event of a Sale of EmCare, the EmCare Bonus shall be paid in a
lump sum in cash as soon as practicable after the Sale of EmCare;
provided, however, that such payment shall be made no later than the
90th day following the Sale of EmCare. In the event of an IPO of EmCare
Stock, the EmCare Bonus shall be paid as soon as practicable after the
IPO of EmCare Stock (but in no event later than 90 days following the
IPO of EmCare Stock) and shall be paid in a lump sum in cash or, if
mutually agreed by EmCare and the Executive, in the form of (A) an
option to purchase EmCare common stock, which option shall have a value
equal to the EmCare Bonus, (B) other equity-based awards relating to
EmCare common stock, which awards shall have a value equal to the
EmCare Bonus, or (C) a combination of cash, stock options described in
clause (A) or awards described in clause (B).
For purposes of this paragraph (e):
(i) "Sale of EmCare" shall mean the disposition by LINC of 50% or
more of its ownership interest in EmCare in a transaction
involving the receipt of consideration by LINC, or the sale of
all or substantially all of the assets of EmCare in a
transaction involving the receipt of consideration by LINC or
EmCare.
(ii) "IPO of EmCare Stock" shall mean an underwritten public
offering pursuant to an effective registration statement filed
under the Securities Act of 1933 covering the offer and sale
of the shares of common stock of EmCare for the account of
EmCare or LINC.
(iii) "Value of EmCare" shall mean:
(I) with respect to a Sale of EmCare, the enterprise
value of EmCare at the time of such sale, less (x)
third party debt incurred in the ordinary course of
business of EmCare that is not assumed by the
acquiror, (y) normal and
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customary transaction closing expenses and (z) all
payments made to EmCare employees that are triggered
by the Sale of EmCare;
(II) with respect to an IPO of EmCare Stock, the product
of (x) the average closing price of a share of common
stock of EmCare for the twenty (20) trading days
immediately following an IPO of EmCare Stock, as
reported in the Wall Street Journal and (y) the total
number of outstanding shares of common stock of
EmCare on the date of the IPO of EmCare Stock, such
product to be reduced by commissions and normal and
customary transaction closing expenses incurred in
connection with the IPO of EmCare Stock; and
(iv) "EmCare Bonus" shall mean an amount equal to 2% of the amount
by which the Value of EmCare exceeds $125 million.
ARTICLE 5 -- BENEFITS
(a) AUTOMOBILE
EmCare shall provide the Executive with a monthly allowance of One
Thousand Dollars ($1,000.00) for expenses incurred by the Executive for
an automobile and (ii) reimburse the Executive for expenses incurred by
the Executive in connection with the related operating expenses for
such automobile, provided that the Executive provides an itemized
written account and receipts acceptable to EmCare and approved by the
CEO.
(b) EXPENSES
It is understood and agreed that the Executive will incur expenses in
connection with his duties under this Agreement, including, but not
limited to, travel expenses, home facsimile expenses, personal computer
expenses and telephone expenses. EmCare shall reimburse the Executive
for any such expenses provided that the Executive provides an itemized
written account and receipts acceptable to EmCare and approved by the
CEO.
(c) VACATION
The Executive shall be entitled to four (4) weeks vacation during each
calendar year, pro-rated, however, for 2003 based on the number of days
remaining in 2003 after the date of this Agreement divided by 365. The
vacation shall be taken at the discretion of the Executive with the
understanding that the Executive will take into account business needs
and operations in scheduling vacation.
(d) WELFARE BENEFITS
EmCare shall provide to the Executive welfare benefit coverages (such
as medical insurance, dental insurance, short and long-term disability
insurance and group term life insurance) in accordance with employee
benefit plans and policies maintained EmCare for the benefit of
employees EmCare, and as amended from time to time; provided, however,
EmCare shall reimburse the Executive for premiums paid by the
Executive, if any, for coverage under such employee benefit plans and
policies. Further, EmCare shall provide the Executive with additional
term life insurance that, in conjunction with
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coverage under the group life insurance programs provided to the
Executive, provides coverage in an amount equal to three (3) times the
Executive's Base Salary.
(e) CLUB MEMBERSHIP
EmCare shall reimburse the Executive for up to an aggregate amount of
Fifty Thousand Dollars ($50,000.00) of expenses incurred by the
Executive for the initial membership fees associated with joining
business or recreational clubs that the Executive will use in
connection EmCare's business. EmCare shall reimburse the Executive for
up to an aggregate annual amount of $10,000 of expenses incurred by the
Executive for ongoing monthly dues payable in connection with the
Executive's membership in such clubs.
(f) EXECUTIVE RELOCATION ALLOWANCE
(i) The Executive shall be entitled to reimbursement of customary
moving and transportation expenses in connection with the
Executive's relocation to Dallas, Texas. Additionally, EmCare
will reimburse Executive for the reasonable expenses incurred
by the Executive or his spouse in taking one trip to West
Beach, Florida every 4 weeks until the earlier of (x) the sale
of Executive's home in West Palm Beach, Florida or (y)
December 1, 2003, and EmCare shall reimburse the Executive for
ordinary and reasonable closing costs (excluding realty fees)
with respect to the sale of his home in West Palm Beach,
Florida if such sale occurs before March 31, 2004. The
Executive shall be entitled to a gross-up payment in such
amount as is necessary to cover the Executive's federal, state
and local income tax exposure resulting from the payments
described in this paragraph (f)(i).
(ii) The Executive shall be entitled to be reimbursed for temporary
housing accommodations. EmCare shall reimburse the executive
for a period of six (6) months, up to a maximum of Ten
Thousand Dollars ($10,000). In addition the Executive shall be
entitled to receive the equivalent of one month salary for
housing support expenses upon sale of existing home, and/or
purchase of a home in the Greater Dallas area, or the
execution of a long term rental arrangement.
ARTICLE 6 -- TERMINATION OF EMPLOYMENT
(a) Notwithstanding the provisions of Article 2 of this Agreement, the
parties understand and agree that this Agreement and the Executive's
employment hereunder may be terminated in the following manner in the
specified circumstances:
(i) By the Executive, at any time, for any reason, on the giving
of 90 days' written notice to EmCare. EmCare may waive notice,
in whole or in part, upon immediate payment to the Executive
of the Executive's Base Salary for such portion of the 90-day
notice period as is waived by EmCare.
(ii) By EmCare, without any notice or pay, for Cause.
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(iii) By EmCare, in its absolute discretion and for any reason,
without Cause. Upon such termination, EmCare shall, (A)
continue to pay the Executive his Base Salary in effect at the
time of such termination for a period of Twelve (12) months
following such termination, if the Executive has been employed
for a period between the Effective date of this Agreement and
three (3) years. If the Executive is terminated pursuant to
section (iii) and has been employed for a period of greater
than three years from the Effective date of the Agreement then
the Executive shall continue to receive his Base Salary in
effective for a period of Twenty-four (24) months (B) pay the
Executive a monthly amount equal to one-twelfth of the
Executive's target bonus in effect at the time of the
Executive's termination, (C) if such termination is prior to
a Sale of EmCare or an IPO of EmCare Stock pay the Executive
an amount equal to 2% of the amount by which the enterprise
value of EmCare at the time of such termination (as determined
by an independent third party appraiser utilizing principles
and analysis substantially similar to those used by Xxxxxx
Xxxxxxxx Xxxxx & Co., LLC in its valuation of EmCare in 2002)
exceeds $125 million and (E) continue to provide the ---
Executive medical insurance, dental insurance and term life
insurance during the appliciable termination period, or, if
such benefits cannot be provided EmCare shall pay to the
Executive an equivalent lump sum cash amount in lieu of such
benefits.
In order to receive the entitlement under paragraph 6(a)(iii), the
Executive must undertake to sign a release in a form satisfactory to
EmCare, fully releasing EmCare from further claims upon payment of the
amounts stipulated herein. However, the form of release shall not
require that the Executive give up any rights of indemnity which the
Executive may have had as against EmCare for acts carried out by the
Executive in the ordinary course EmCare's business.
(b) The Executive agrees that during employment pursuant to this Agreement
and for twenty-four (24) months following termination without Cause of
his employment and payment of the severance payment amount and benefit
continuation as detailed in subparagraph (iii) of paragraph (a) of
Article 6 (Termination of Employment), he will not solicit or accept
business with respect to products competitive with those of EmCare from
any of EmCare's customers, wherever situated, and he shall not either
individually or in partnership, or jointly in conjunction with any
other person, entity or organization, as principal, agent, consultant,
lender, contractor, employer, employee, investor, shareholder, or in
any other manner, directly or indirectly, advise, manage, carry on,
establish, control, engage in, invest in, offer financial assistance or
services to, or permit his name to be used by any business that
competes with the then-existing business of EmCare, provided that the
Executive shall be entitled, for investment purposes, to purchase and
trade shares of a public company which are listed and posted for
trading on a recognized stock exchange and the business of which public
company may be in competition with the business of EmCare, provided
that the Executive shall not directly or indirectly own more than five
percent (5%) of the issued share capital of the public company, or
participate in its management or operation, or in any advisory capacity
within the time limits set out herein.
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For purposes of the obligations set out herein, the business of EmCare
shall mean the provision of (a) critical care transportation services,
non-emergency ambulance and transfer services and emergency response
services and/or (b) emergency management services to hospital-based
emergency departments and freestanding emergency clinics and (c)
inpatient hospitalist services.
(c) The Executive further agrees that for a period of twenty-four (24)
months following termination of employment, however caused, he will not
solicit for hire or rehire, or take away, or cause to be hired, or
taken away, employee(s) of EmCare.
ARTICLE 7 -- AUTHORITY
(a) The Executive shall have, subject always to the general or specific
instructions and directions of the Chief Executive Officer of EmCare,
power and authority to manage and direct the business affairs of EmCare
(except only the matters and duties as by law must be transacted or
performed by the Board of LINC or by the shareholders of LINC or
EmCare), including power and authority to enter into contracts,
engagements or commitments of every nature or kind, in the name of and
on behalf of EmCare, and to engage, employ and dismiss all managers and
other employees and agents of EmCare, subject to the by-laws and
charter documents and policies of EmCare.
(b) The Executive shall conform to all lawful instructions and directions
given to him by the Chief Executive Officer of EmCare and obey and
carry out the by-laws of EmCare.
ARTICLE 8 -- SERVICE
(a) The Executive, throughout the term of his employment, shall devote his
full time and attention to the business and affairs of EmCare, and
shall not undertake any other business or occupation or, unless
approved by the Chief Executive Officer of EmCare, become either (i) an
officer, employee or agent of any other company or firm which is a
commercial venture or (ii) a director of more than two companies or
firms which are commercial ventures; provided, however, that the
Executive shall be entitled to maintain his ownership interest in BIDON
Inc. and related corporations ("BIDON") and shall be entitled to attend
the meetings of the principals of BIDON from time to time, provided
that such ownership or attendance does not conflict with the
Executive's duties and obligations hereunder.
(b) The Executive shall well and faithfully serve EmCare and use his best
efforts to promote the interests thereof and shall not disclose any
information he may acquire in relation to LINC's, EmCare's business,
the private affairs or trade secrets of LINC or EmCare, techniques and
concepts, and other confidential information concerning the business,
operations or financing of LINC or EmCare, to any person other than the
Chief Executive Officer of EmCare, or for any purposes other than those
of LINC or EmCare, either during the term of his employment under this
Agreement or after such term.
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ARTICLE 9 -- CHANGE IN CONTROL
(a) If a change in control (as defined in the Change in Control Agreement)
occurs, except as otherwise provided in this Article 9, the rights and
obligations of the Executive and shall be in accordance with the Change
in Control Agreement attached as Appendix A.
(b) In order to receive the entitlement under this paragraph, the Executive
must undertake to sign a release in a form satisfactory to EmCare,
fully releasing EmCare from further claims upon payment of the amounts
stipulated in Appendix A. However, the form of release shall not
require that the Executive to give up any rights of indemnity which the
Executive may have had as against EmCare for acts carried out by the
Executive in the ordinary course of EmCare's business.
If a change in control occurs and Executive receives all payments under the
Change in Control Agreement, the Executive hereby waives any rights he may have
to any payments or other benefits under this Agreement, including any severance
payments, provided that Executive shall remain entitled to the payment described
in Section 4(d) hereof, subject to the requirements of the final paragraph of
Section 6(a) hereof.
ARTICLE 10 -- ASSIGNMENT OF RIGHTS
The rights which accrue to EmCare under this Agreement shall pass to their
affiliates, successors or assigns. The rights of the Executive under this
Agreement are not assignable or transferable in any manner but flow to the
Executive's estate and heirs.
ARTICLE 11 -- NOTICES
All notices and other communications required or permitted hereunder, or
necessary or convenient in connection herewith, shall be in writing and shall be
deemed to have been given when hand delivered, delivered by facsimile or mailed
by registered mail as follows (provided that notice of change of address shall
be deemed given only when received):
If to EmCare to
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxxx Inc.
00 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx 00000
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If to the Executive, to:
Xxx X. Xxxxxx
0000 Xxxxxxxx Xx.
Xxxx Xxxx Xxxxx, XX 00000
or to such other names or addresses as EmCare or the Executive shall designate
by notice to the other in the manner specified in this paragraph.
ARTICLE 12 -- LIABILITY INSURANCE
EmCare to, maintain the Executive's liability insurance in accordance with
corporate policy and applicable law.
ARTICLE 13 -- INDEMNIFICATION
EmCare shall agree that if the Executive is made a party to any action, suit,
proceeding or any other claim whatsoever, by reason of the fact that the
Executive is or was a director, officer, employee or agent of EmCare, or is or
was serving at the request of EmCare as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
whether or not the basis of such claim is the Executive's alleged action in an
official capacity while in service as a director, officer, employee or agent of
EmCare, the Executive shall be indemnified and held harmless by EmCare to the
fullest extent legally permitted or authorized by EmCare's certificate of
incorporation or bylaws or resolutions of the board of directors of LINC or
EmCare against all expenses, liability and loss, including, without limitation,
legal fees, fines or penalties and amounts paid or to be paid in settlement, all
as reasonably incurred by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even after the Executive has
ceased to be a director, officer, employee or EmCare, and shall inure to the
benefit of the Executive's heirs, executors and administrators.
ARTICLE 14 -- WITHHOLDING OF TAXES
EmCare shall withhold from any amounts payable under this Agreement all taxes as
legally shall be required pursuant to applicable federal, state or local laws.
EmCare shall not be obligated to compensate the Executive for the payment of
such taxes.
ARTICLE 15 -- SEVERABILITY
If any provision of this Agreement or the application thereof to anyone, or
under any circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and shall not invalidate or
render unenforceable such provision or application in any other jurisdiction.
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ARTICLE 16 -- ENTIRE AGREEMENT
This Agreement, including Appendix A hereto, constitutes the entire agreement
between the parties with respect to the employment and appointment of the
Executive and any and all previous agreements, written or oral, express or
implied, between the parties or on their behalf, relating to the employment and
appointment of the Executive by EmCare, are terminated and cancelled and each of
the parties releases and forever discharges the other of and from all manner of
actions, causes of action, claims and demands whatsoever, under or in respect of
any previous agreement.
ARTICLE 17 -- AMENDMENT, WAIVER, ETC.
No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and EmCare. No waiver by any party hereto at any time of any breach by
any other party hereto of, or compliance with, any condition of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
ARTICLE 18 -- HEADINGS
The headings used in this Agreement are for convenience only and are not to be
construed in any way as additions to or limitations of the covenants and
agreements contained in it.
ARTICLE 19 -- COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
ARTICLE 20 -- GENDER AND NUMBER
Except where otherwise indicated by the context, any masculine term used herein
shall also include the feminine; the plural shall include the singular, the
singular shall include the plural.
ARTICLE 21 -- GOVERNING LAW
This Agreement shall be governed by the internal law, and not the laws of
conflicts, of the State of Delaware.
[SIGNATURES ON NEXT PAGE.]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the 1st day of
April, 2003.
EMCARE HOLDINGS, INC.
BY: /S/ XXXXXXX X. XXXXXX
NAME: XXXXXXX XXXXXX
TITLE: CEO
XXX X. XXXXXX
/S/ X.X.XXXXXX
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