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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 5, 1992, between EMCARE
HOLDINGS INC., a Delaware corporation (the "Company"), and XXXXXXX X. XXXXXX
(the "Employee").
W I T N E S S E T H:
WHEREAS the Employee is currently employed by EmCare, Inc., a Texas
corporation and a wholly owned subsidiary of the Company ("EmCare"), in the
capacity of President and Chief Operating Officer; and
WHEREAS the Employee is a member of the senior management of the
Company and EmCare and has access to proprietary information pertaining to the
business and operations of the Company and EmCare; and
WHEREAS the Company and the Employee desire to enter into an agreement
providing for the continued employment of the Employee in the capacity of
President and Chief Operating Officer of the Company in accordance with the
terms and conditions, and for the consideration, set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Employee agree as follows:
1. Employment. (a) The Company hereby employs the Employee, and
the Employee hereby accepts such employment with the Company for the period set
forth in paragraph 2 hereof, all upon the terms and conditions hereinafter set
forth.
(b) As a condition to the Employee's employment by the Company,
the Employee affirms and represents that he is under no obligation to any
former employer or other party which is in any way inconsistent with, or which
imposes any restriction upon, the Employee's acceptance of employment hereunder
with the Company, the employment of the Employee by the Company, or the
Employee's undertakings under this Agreement.
2. Term of Employment. Except as otherwise provided in paragraph
10(g) hereof, or unless earlier terminated as hereinafter provided, the term of
the Employee's employment under this Agreement shall be for a period beginning
on the date hereof and ending on the fifth anniversary hereof (the "Employment
Term"). In the event that the Employee continues in the full-time employ of
the Company after the end of the Employment Term (it being expressly understood
and agreed that the Company does not now, nor hereafter shall have, any
obligation to continue the Employee in its employ whether or not on a full-time
basis, after said Employment Term ends), then, unless otherwise agreed by the
Employee and the Company, the Employee's continued employment with the Company
shall, notwithstanding anything to the contrary expressed or implied herein, be
terminable by the Company or the Employee at will, but shall in all other
respects be subject to the terms and conditions of this Agreement.
Notwithstanding anything to the contrary herein, as long as Employee continues
in the employ of the Company
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after the end of the Employment Term, all of the terms and conditions of this
Agreement shall remain in full force and effect notwithstanding the end of such
Employment Term.
3. Duties. (a) Office. The Employee shall be employed as the
President and Chief Operating Officer of the Company and shall report to the
Board of Directors and the Chairman of the Board of the Company. The Employee
shall perform such executive duties as the Chairman of the Board or the Board
of Directors may prescribe so long as such duties are consistent with the
responsibilities of the Employee prior to the date of this Agreement and are
consistent with the office and position of President and Chief Operating
Officer of the Company. The Employee shall be elected to serve as President
and Chief Operating Officer of the Company during the Term of Employment, and
any failure of the Employee to be so nominated and elected (other than as a
result of the prior termination of the Employee's employment hereunder pursuant
to paragraph 8 hereof) shall constitute a termination of the Employee's
employment hereunder by the Company pursuant to subparagraph 8(d) hereof.
(b) Place of Business. The Employee's principal place of business
shall be located in Dallas, Texas, and the Employee shall not be required by
the Company to relocate without his consent. The Employee shall devote not
less than forty (40) hours per week on average to the performance of his duties
during the term of this Agreement.
(c) Services Exclusive. Except as may otherwise be approved in
advance by the Board of Directors of the Company, and except during vacation
periods and reasonable periods of absence due to sickness, personal injury or
other disability, the Employee shall devote his full time throughout the
Employment Term to the services required of him hereunder. The Employee shall
render his services exclusively to the Company during the Employment Term, and
shall use his best efforts, judgment and energy, to improve and advance the
business and interests of the Company in a manner consistent with the duties of
his position, provided, however, that the Employee may conduct such other
activities during the Employment Term as he deems appropriate and consistent
with his duties hereunder, including serving as a director of other companies
and engaging in civic and social responsibilities.
4. Salary and Bonus. (a) Annual Salary. As compensation for
the services to be performed by the Employee hereunder during the Employment
Term, the Company shall pay the Employee a base salary at the annual rate of
two hundred thousand dollars ($200,000) (the "Basic Salary", and together with
any adjustments or increments thereto being hereinafter referred to as the
"Salary"). Any increase in such salary shall be evidenced by an addendum to
this Agreement signed by the parties hereto and attached to this Agreement.
The payment of any Salary hereunder shall be subject to applicable withholding
and payroll taxes, and such other deductions as may be required under the
Company's employee benefit plans. Any Salary payable hereunder shall be paid
in equal semimonthly installments on the first and fifteenth day of each month.
(b) Salary Adjustments. On January 1, 1993 and on the first
business day of each calendar year thereafter during the Employment Term, the
annual Salary payable to the Employee hereunder for such calendar year will be
increased by an amount equal to the product of (i) the annual Salary paid to
the Employee during the immediately preceding calendar year multiplied by
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(ii) the greater of (x) the percentage increase, if any, in the Consumer Price
Index (All Cities -- All Items) during such calendar year and (y) five percent
(5%).
(c) Bonus. During the Employment Term (and, with respect to any
Bonus payable hereunder with respect to any period prior to the termination of
the Employment Term, as soon as practicable after such termination), subject to
(i) review and approval by the Board of Directors of the Company (which
approval shall not unreasonably be withheld) and (ii) the Company's achieving
earnings from internal growth and profitability at the level specified in the
Company's annual base financial plan approved by the Board of Directors of the
Company for the immediately preceding fiscal year (the "Base Financial Plan"
for such preceding fiscal year), the Company shall pay the Employee a cash
bonus of not less than one hundred thousand dollars ($100,000) (the "Bonus")
for such preceding fiscal year; provided, however, that if the Company achieves
eighty-percent (80%) or more of the operating income specified in the Base
Financial Plan for such preceding fiscal year, the Company shall pay the
Employee a pro rata cash Bonus equal to the percent so achieved multiplied by
the full Bonus he otherwise would have been entitled to receive had the Company
achieved 100% of the operating income specified in said Base Financial Plan.
The payment of the Bonus for any fiscal year hereunder shall be subject to
applicable withholding and payroll taxes, and such other deductions as may be
required under the Company's employee benefit plans. Any Bonus payable
hereunder shall be payable no later than one month after approval by the Board
of Directors of the audited annual financial statements of the Company for the
fiscal year in respect of which such Bonus is payable (the "Financials" for
such fiscal year), and the Company shall use its best efforts to cause its
auditors to deliver such Financials within ninety (90) days after the end of
such fiscal year.
(d) Additional Compensation. At any time during the Employment
Term, the Board of Directors may, in its sole discretion, pay an additional
cash bonus, and/or issue stock options to, the Employee.
(e) Stock Options. Simultaneously with the execution and delivery
of this Agreement by the parties hereto, the Company has (i) granted to the
Employee certain "non-qualified" stock options under the EmCare Holdings Inc.
Stock Option and Restricted Stock Purchase Plan (the "Plan") pursuant to the
Non-Qualified Stock Option Agreement of even date herewith between the Company
and the Employee and (ii) authorized the grant to the Employee of certain
additional stock options under the Plan subject to certain conditions.
5. Expenses. The Company shall upon submission of expense
reports acceptable to the Company, reimburse the Employee for all reasonable
expenses incurred by the Employee in connection with the performance of his
obligations hereunder, subject to submission of supporting documentation in a
form reasonably prescribed by the Company. Reimbursements will be made in a
manner consistent with the historical policies of the Company. The obligations
of the Company under this paragraph 5 in respect of such reasonable expenses
incurred by the Employee prior to the termination of this Agreement and/or the
Employment Term shall survive such termination.
6. Benefits. In addition to the payments required by paragraphs
4 and 5 to be paid to the Employee during the Employment Term, the Employee
shall:
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(a) be eligible to participate in the employee fringe benefits,
pension plan, life or other similar insurance plans and/or medical and health
plans or other employee welfare benefit plans described on Schedule I hereto;
(b) be entitled to six (6) weeks of annual paid vacation in
accordance with Company policy applicable to key executive employees; and
(c) be entitled to sick leave and sick pay in accordance with any
Company policy that may be applicable to key executive employees.
7. Confidentiality. The Employee hereby covenants, agrees and
acknowledges as follows:
(a) The Employee's employment hereunder creates a relationship of
confidence and trust between the Employee and the Company with respect to
certain information applicable to the Business (as such term is defined in
Section 7.01(b) of the Securities Purchase Agreement dated as of February 4,
1992 (the "Purchase Agreement") among the Company, EmCare, Inc., the Employee,
Xxxxxxx X. Xxxxx, M.D., and the several other individuals and entities named as
parties thereto) of the Company, its subsidiaries from time to time and any
professional associations or professional corporations which are listed on
Schedule II hereto or any other corporation, association or other entity
engaged in the Business which may hereafter be owned or controlled (directly or
indirectly) by the Company, the Employee or Xxxxxxx X. Xxxxx, M.D.
(individually, an "Affiliate", and collectively the "Affiliates") or applicable
to the business of any client or customer of the Company or any of its
subsidiaries or Affiliates.
(b) The Company possesses and will continue to possess information
that has been created, discovered or developed by, or otherwise become known
to, it (including without limitation information created, discovered, developed
or made known by the Employee during the period of or arising out of his
employment hereunder) or in which property rights have been or may be assigned
or otherwise conveyed to the Company which information has commercial value in
the Business and is treated by the Company as confidential.
(c) The Employee also agrees that he will not without the prior
written consent of an appropriate executive officer of the Company (i) use for
his benefit or disclose at any time during his employment by the Company, or
thereafter, except to the extent required by law or by the performance by him
of his duties as an employee of the Company, any information obtained or
developed by him while in the employ of the Company with respect to the
identity of the Company's customers, transactions between the Company and its
customers and suppliers, the products, services, employees, or financial
affairs of the Company or any of its subsidiaries or Affiliates, or any
confidential matter regarding the business of the Company or any of its
subsidiaries or Affiliates, except information which at the time is generally
known within the industry other than as a result of disclosure by him not
permitted hereunder, or (ii) take with him upon leaving the employ of the
Company any document or paper relating to any of the foregoing or any physical
property of the Company or any of its subsidiaries or Affiliates.
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(d) The Employee acknowledges that a remedy at law for any breach
or threatened breach of the provisions of this paragraph 7 would be inadequate
and therefore agrees that the Company shall be entitled to injunctive relief in
addition to any other available rights and remedies in case of any such breach
or threatened breach, provided, however, that nothing contained herein shall be
construed as prohibiting the Company from pursuing any other remedies available
for any such breach or threatened breach.
(e) The Employee agrees that upon termination of his employment
hereunder for any reason, the Employee shall forthwith return to the Company
all documents and other property in his possession belonging to the Company or
any of its subsidiaries or Affiliates.
(f) Without limiting the generality of paragraph 12 hereof , the
Employee hereby expressly agrees that the foregoing provisions of this
paragraph 7 shall be binding upon the Employee's heirs, successors and legal
representatives.
8. Termination. The Employee's employment hereunder shall be
terminated (without thereby giving rise to a breach of this Agreement solely as
a result of such termination) upon the occurrence of any of the following:
(a) the death of the Employee;
(b) written notice from the Company to the Employee based upon the
inability of the Employee to perform his duties on account of disability or
incapacity for a period of six (6) months, whether or not consecutive, during
any twelve (12)-month period ("Disability");
(c) written notice from the Company to the Employee that his
employment hereunder has been terminated "for cause";
(d) written notice by the Company to the Employee of the
termination of his employment hereunder by the Company at any time other than
pursuant to subparagraphs (a), (b) or (c) hereof;
(e) written notice by the Employee to the Company of a breach by
the Company of any material provision of this Agreement if such breach
continues for thirty (30) days after written notice thereof to the Board of
Directors of the Company; or
(f) written notice by the Employee to the Company of the
termination of the Employee's employment hereunder by the Employee at any time
for any reason whatsoever (including without limitation resignation or
retirement), other than a breach of any material provision of this Agreement by
the Company (as described above in subparagraph 8 (e)).
For purposes of this Agreement, the term "for cause" or "cause" shall
mean a written determination made in good faith by the Board of Directors of
the Company (other than the Employee) that the Employee (i) failed to obey the
reasonable and lawful orders of the Board of Directors of the Company, which
orders were consistent with the duties and rights of the Employee under this
Agreement, after the Employee had been given written notice of such failure and
not less than thirty (30) days to cure it, (ii) acted with gross negligence in
the performance of,
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or willfully disregarded, his obligations hereunder, (iii) habitually neglected
his duty after repeated requests by the Board of Directors, (iv) committed a
felony or any act involving dishonesty or fraud or moral turpitude, or (v)
violated in any material respect the provisions of paragraph 7 hereof or
Section 7.01 of the Purchase Agreement
9. Severance Benefit. (a) Subject to the provisions of
subparagraphs (c) and (d) below, in the event that (i) the Employee's
employment with the Company is terminated by the Company pursuant to
subparagraph 8(d) or by the Employee pursuant to subparagraph 8(e) above, or
(ii) the Employment Term terminates after the second anniversary of the date
hereof but prior to the fifth anniversary of the date hereof and the Company
elects, by written notice (the "Extension Notice") given to the Employee not
less than ten days prior to such date, to make the payments and to provide the
benefits described in this subparagraph 9(a), then during each month for a
period of one year commencing on the date of such termination or expiration of
the Employment Term the Company shall (A) pay to the Employee, as severance pay
or liquidated damages or both, (x) the Employee's monthly Salary determined as
of the date the Employee's employment so ceases plus (y) one-twelfth (1/12) of
the Employee's Pro Rata Bonus (as hereinafter defined), if any, in each case in
equal semi-monthly installments, on the first and fifteenth day of each month,
and (B) continue to provide the Employee with (x) medical and health plan
coverage, (y) life or other similar insurance plan coverage (assuming such
coverage is available at rates comparable to those in effect prior to the
termination or expiration of the Employment Term) and (z) disability insurance
coverage, all at the benefit levels in effect for the Employee and his family
as of the date the Employee's employment so ceases. As used in this
subparagraph 9(a), the term "Pro Rata Bonus" shall mean the amount, if any,
obtained by (1) calculating the amount of Bonus, if any, that would be payable
to the Employee pursuant to subparagraph 4(c) hereof with respect to the fiscal
year in which the Employment Term terminates or expires the operating profit
achieved for the period from the beginning of such fiscal year through the last
day of the calendar month ending closest to the date of such termination or
expiration is annualized and treated for the purposes of this subparagraph 9(a)
as the operating profit achieved for such fiscal year, and (2) multiplying such
amount by a fraction, the numerator of which consists of the number of days in
such fiscal year prior to the termination or expiration of the Employment Term,
and the denominator of which is 365.
(b) Notwithstanding anything to the contrary expressed or implied
herein, in the event that (i) the Employee's employment with the Company is
terminated by the Company pursuant to subparagraph 8(c) above or (ii) the
Employee violates in any material respect any of the provisions of paragraph 7
hereof and/or Section 7.01 of the Purchase Agreement, then the Employee's
rights to any payments and benefits pursuant to subparagraph (a) above shall
thereupon terminate and the Company's obligations hereunder to make such
payments and to provide such benefits shall thereupon cease. In the event that
the Employee becomes employed by any person, organization or entity other than
the Company, the severance payments and benefits described in subparagraph (a)
above shall be reduced pro rata to the extent of Employee's compensation and
benefits provided by such other employment, provided, however, that nothing in
this sentence shall limit the operation of clause (ii) of this subparagraph
9(b).
(c) Notwithstanding anything to the contrary expressed or implied
herein, except as set forth in subparagraph 9(a) above, paragraph 10 below, and
in Section 7.02 of the Purchase
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Agreement, and except as may be otherwise required by law, the Company shall
not be obligated to make any severance or other payments or provide any
benefits to the Employee or on his behalf of whatever kind or nature by reason
of the Employee's cessation of employment, other than (i) such amounts, if any,
of his Salary otherwise payable pursuant to subparagraph 4(a) hereof as shall
have accrued and remained unpaid as of the date of said cessation, and (ii) in
the event that the Employee's employment with the Company is terminated
pursuant to subparagraphs 8(a) or 8(b) above, an amount equal to the Employee's
Pro Rata Bonus as shall be determined pursuant to subparagraph 9(a) above.
(d) Any severance payments and benefits provided under this
paragraph 9 shall be subject to applicable payroll and withholding taxes.
10. Change in Control.
(a) Definitions. For purposes of this Agreement, the following
terms shall have the respective meanings assigned to them herein:
(1) A "Change in Control" of the Company shall be defined
as follows:
(A) an event or series of events by which any
"person" or "group" (as such terms are defined in Sections
3(a)(9) and 13(d) of the Securities Exchange Act of 1934),
together with its or their "affiliates" and "associates" (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934), becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, modified to
include, without regard to the 60-day period referred to in
such Rule, all shares that such person or group has the right
to acquire pursuant to any agreement or arrangement, or upon
exercise of conversion rights, warrants or options, or
otherwise), directly or indirectly, of securities of the
Company having 30% of more of the total number of votes
entitled to be cast for the election of the Board of Directors
of the Company, except that "Change in Control" shall not
include an event or series of events described above which
occur pursuant to a transaction or agreement approved by such
Board of Directors prior to the time such person or group
becomes such a 30% beneficial owner, and "Change in Control"
shall not include an event or series of events described above
in which any Company-sponsored employee benefit plan or plans
shall become the "beneficial owner" of such 30% interest; or
(B) a change in a majority of the Board of
Directors of the Company within any 24-month period unless the
election or the nomination for election by the Company
stockholders of each new director was approved by a vote of
least a majority of the directors then still in office who
were directors at the beginning of the period; or
(C) the sale or transfer of 50% or more of the
assets or earning power of the Company and its subsidiaries
(taken as a whole); or
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(D) at any time (i) the Company shall consolidate
with, or merge with, any other person and the Company shall
not be the continuing or surviving corporation, (ii) any
person shall consolidate with, or merge with the Company, and
the Company shall be the continuing or surviving corporation
and in connection therewith, all or part of the outstanding
Company stock shall be changed into or exchanged for stock or
other securities of any other person or cash or any other
property, or (iii) the Company shall be a party to a statutory
share exchange with any other person after which the Company
is a subsidiary of any other person.
(2) The "Change in Control Date" shall mean the date
immediately prior to the effectiveness of the Change in Control.
(3) The Employee shall have "Good Reason" to terminate
employment if: (A) the Employee is not elected, reelected, or
otherwise continued in the office of the Company or any of its
subsidiaries which he held immediately prior to the Change in Control
Date, or he is removed as a member of the Board of Directors of the
Company or any of its subsidiaries if the Employee was a director
immediately prior to the Change in Control Date; (B) the Employee's
duties, responsibilities or authority as an employee are materially
reduced or diminished from those in effect on the Change in Control
Date without the Employee's consent; (C) the Employee's compensation
or benefits are reduced; (D) the Company reduces the potential
earnings of the Employee under any performance-based bonus or
incentive plan of the Company in effect immediately prior to the
Change in Control Date; (E) the Company requires that the Employee's
employment be based other than at Dallas, Texas without his consent;
(F) any purchaser, assign, surviving corporation, or successor of the
Company or its business or assets (whether by acquisition, merger,
liquidation, consolidation, reorganization, sale or transfer of assets
or business, or otherwise) fails or refuses to expressly assume in
writing this Agreement and all of the duties and obligations of the
Company hereunder pursuant to paragraph 12 hereof; or (G) the Company
breaches any of the provisions of this Agreement.
(4) For purposes of this Agreement, a "Potential Change
in Control" of the Company shall be deemed to have occurred if the
conditions set forth in any one of the following subparagraphs shall
have been satisfied:
(A) the Company enters into an agreement, the
consummation of which would result in the occurrence of a
Change in Control of the Company;
(B) any person (including the Company) publicly
announces an intention to take or to consider taking actions
which, if consummated, would constitute a Change in Control of
the Company;
(C) any person other than a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company (or a corporation owned, directly or indirectly by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), who
is or becomes the
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beneficial owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power
of the Company's then outstanding securities, increases such
person's beneficial ownership of such securities by 5
percentage points or more over the percentage so owned by such
person on either the date hereof or, if later, the date such
person becomes a 10% or more beneficial owner; or
(D) the Board of Directors of the Company adopts
a resolution to the effect that, for purposes of this
Agreement, a potential Change in Control of the Company has
occurred; or
(E) commencement of discussions with a third
party that ultimately results in a Change in Control of the
Company.
(5) "Termination of Employment" shall mean the
termination of the Employee's employment by the Company other than
such a termination in connection with an offer of immediate
re-employment by a successor or assign of the Company or purchaser of
the Company or its assets under terms and conditions which would not
permit the Employee to terminate his employment for Good Reason.
(b) Termination Following Change in Control or Potential Change in
Control. If a Change in Control of the Company occurs, Employee shall be
entitled to the benefits provided in subparagraph 10(c) upon the Employee's
subsequent Termination of Employment during the term of this Agreement. If a
Potential Change in Control of the Company occurs, Employee shall be entitled
to the benefits provided in subparagraph 10(d) upon Employee's subsequent
Termination of Employment during the term of this Agreement.
(c) Benefits to be Provided Upon a Change in Control. If during
the term of this Agreement there has been a Change in Control, and during the
two (2) year period commencing on the Change in Control Date the Employee has a
Termination of Employment which is initiated by the Company without cause (as
such term is defined in paragraph 8 above) or by the Employee for Good Reason,
the Company agrees to provide the following benefits and compensation:
(1) Any outstanding stock options, restricted stock, or
other form of stock-based grant or award previously granted to
Employee by the Company, to the extent vested in Employee as of the
date of such Termination of Employment, shall remain exercisable for a
minimum of thirty (30) days after such Termination of Employment,
notwithstanding any provision of such grant or award to the contrary.
(2) For a two-year period following such Termination of
Employment, the Employee shall not lose his eligibility for health,
dental, life, or disability benefits under any employee benefit plan,
policy, arrangement, or program (regardless of whether such program is
maintained for employees in general, highly- compensated employees (as
that term is defined in Section 414(q) of the Internal Revenue Code of
1986, as amended (the "Code"), non-highly compensated employees, or
for a select group of management employees or highly-compensated
employees (described in 29 CFR Section 2520.104-24)). In
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the event that under the terms of such plan, policy, arrangement, or program,
the Employee's Termination of Employment results in a loss of such coverage,
the Company shall immediately purchase identical coverage for Employee for any
portion of the 24-month period so remaining. Following this period, Employee
shall be entitled to receive continuation coverage under COBRA, treating the
end of this period as a termination of Employee's employment other than for
gross misconduct.
(3) Immediately following such Termination of Employment,
the Company shall pay to Employee an amount equal to two (2) times the
sum of:
(A) Employee's annual base rate of pay determined
as of the greater of (x) the year in which the Termination of
Employment occurs, or (y) the beginning of the calendar year
coinciding with or next preceding such Change in Control; plus
(B) the greater of (x) the average of the last
three annual incentive bonuses paid to the Employee under the
Company's long-term incentive program immediately prior to
such Change in Control, or (y) the average of the first three
annual incentive bonuses paid to Employee under the Company's
long-term incentive program immediately prior to such
Termination of Employment. Such amount shall be paid in cash
to the Employee within 30 days of such Termination of
Employment.
(4) If, in the written opinion of a national accounting
firm engaged by either the Company or the Employee for this purpose
(at the Company's expense), or if so alleged by the Internal Revenue
Service, the aggregate of the benefit payments hereunder (other than
under this subparagraph 10(c)(4)) would cause the payment of one or
more of such benefits to constitute an "excess parachute payment" as
defined in Section 280G(b) of the Code, then the Company will pay to
the Employee an additional amount in cash (the "Gross-Up Payment")
equal to the amount necessary to cause the net amount retained by the
Employee, after deduction of any (i) excise tax on the payments
hereunder (other than under this subparagraph 10(c)(4)), (ii) federal,
state or local income tax on the Gross-Up Payment, and (iii) excise
tax on the Gross-Up Payment, to be equal to the aggregate remuneration
the Employee would have received hereunder, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes),
as if Sections 280G and 4999 of the Code (and any successor provisions
thereto) had not been enacted into law. The Gross-Up Payment provided
for in this subparagraph shall be made within thirty (30) days after
the termination of Employee's employment, provided, however, that if
the amount of the payment cannot be finally determined at the time,
the Company shall pay to Employee an estimate as determined in good
faith by the Company of such payments (together with interest at the
rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the forty
fifth (45th) day after the Termination of Employment date. Any
dispute concerning the application of this Paragraph shall be resolved
pursuant to paragraph 24 of this Agreement.
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(d) Benefits to be Provided Upon a Potential Change in Control.
If during the term of this Agreement there has been a Potential Change in
Control and during the one (1) year period commencing on the date immediately
prior to the Potential Change in Control, the Employee has a Termination of
Employment which is initiated by the Company without cause (as such term is
defined in paragraph 8 above) or by the Employee for Good Reason (and for
purposes of this subparagraph 10(d), "Good Reason" shall be defined by
substituting "Potential Change in Control" for the phrase "Change in Control"
everywhere it occurs therein), the Company agrees to provide the following
benefits and compensation, provided, however, notwithstanding the above, if an
actual Change in Control of the Company also occurs and Employee incurs a
Termination of Employment under which subparagraph 10(c) hereof would apply,
then subparagraph 10(c) shall supersede this subparagraph and this subparagraph
shall not apply.
(1) Any outstanding stock options, restricted stock, or
other form of stock-based grant or award previously granted to
Employee by the Company, to the extent vested in Employee as of the
date of such Termination of Employment, shall remain exercisable for a
minimum of thirty (30) days after such Termination of Employment,
notwithstanding any provision of such grant or award to the contrary.
(2) For a two-year period following such Termination of
Employment, the Employee shall not lose his eligibility for health,
dental, life, or disability benefits under any employee benefit plan,
policy, arrangement, or program (regardless of whether such program is
maintained for employees in general, highly- compensated employees (as
that term is defined in Section 414(q) of the Code), non-highly
compensated employees, or for a select group of management employees
or highly-compensated employees (described in 29 CFR Section
2520.104-24)). In the event that under the terms of such plan,
policy, arrangement, or program, the Employee's Termination of
Employment results in a loss of such coverage, the Company shall
immediately purchase identical coverage for Employee for any portion
of the 24-month period so remaining. Following this period, Employee
shall be entitled to receive continuation coverage under COBRA,
treating the end of this period as a termination of Employee's
employment other than for gross misconduct.
(3) Immediately following such Termination of Employment,
the Company shall pay to Employee an amount equal to two (2) times the
sum of:
(A) Employee's annual base rate of pay determined
as of the greater of (x) the year in which the Termination of
Employment occurs, or (y) the beginning of the calendar year
coinciding with or next preceding such Potential Change in
Control; plus
(B) the greater of (x) the average of the last
three annual incentive bonuses paid to the Employee under the
Company's long-term incentive program immediately prior to
such Potential Change in Control, or (y) the average of the
last three annual incentive bonuses paid to Employee under the
Company's long-term incentive program immediately prior to
such Termination of Employment.
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Such amount shall be paid in cash to the Employee within 30
days of such Termination of Employment.
(4) If, in the written opinion of a national accounting
firm engaged by either the Company or the Employee for this purpose
(at the Company's expense), or if so alleged by the Internal Revenue
Service, the aggregate of the benefit payments hereunder (other than
under this subparagraph 10(d)(4)) would cause the payment of one or
more of such benefits to constitute an "excess parachute payment" as
defined in Section 280G(b) of the Code, then the Company will pay to
the Employee an additional amount in cash (the "Gross-Up Payment")
equal to the amount necessary to cause the net amount retained by the
Employee, after deduction of any (i) excise tax on the payments
hereunder (other than under this subparagraph 10(d)(4)), (ii) federal,
state or local income tax on the Gross-Up Payment, and (iii) excise
tax on the Gross-Up Payment, to be equal to the aggregate remuneration
the Employee would have received hereunder, excluding such Gross-Up
Payment (net of all federal, state and local excise and income taxes),
as if Sections 280G and 4999 of the Code (and any successor provisions
thereto) had not been enacted into law. The Gross-Up Payment provided
for in this Paragraph shall be made within thirty (30) days after the
termination of Employee's employment, provided, however, that if the
amount of the payment cannot be finally determined at the time, the
Company shall pay to Employee an estimate as determined in good faith
by the Company of such payments (together with interest at the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the forty fifth
(45th) day after the Termination of Employment date. Any dispute
concerning the application of this Paragraph shall be resolved
pursuant to paragraph 24 of this Agreement.
(e) Death of the Employee. In the event of the death of the
Employee between a Change in Control or Potential Change in Control and the
payment of the amount determined under subparagraph 10(c) or 10(d) above, such
amount shall be paid to the beneficiary specified in writing by the Employee to
the Company. In the event that the Employee has not specified a beneficiary,
the Company shall pay such amount to the following with the priority as
follows:
(1) any testamentary trust created under the will of
Employee,
(2) Employee's surviving spouse,
(3) Employee's surviving children, or
(4) Employee's estate.
(f) Offset by Other Severance Obligations. For so long as the
Company's obligations under subparagraphs 10(b), 10(c), or 10(d) of this
Agreement cover a termination of the Employee's employment with the Company,
payments under this paragraph 10 shall be offset by any other severance
obligations provided to the Employee under this Agreement, provided that such
severance obligations shall remain effective in accordance with the terms of
this Agreement with respect to any termination of Employee not covered under
subparagraphs 10(b), 10(c), or 10(d) of this Agreement.
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(g) Automatic Extension. Notwithstanding anything to the contrary
in paragraph 2 or elsewhere herein, if a Potential Change in Control occurs,
the provisions of this paragraph 10 shall be automatically extended and
continue to be in effect for an additional twelve (12) months. Notwithstanding
anything to the contrary in paragraph 2 or elsewhere herein, if a Change in
Control shall have occurred during the original or extended term of this
paragraph 10, the provisions of this paragraph 10 shall continue in effect for
a minimum period of twenty four (24) months beyond the month in which such
Change in Control occurred.
(h) Notwithstanding anything to the contrary herein, and without
limiting Employee's rights at law or in equity, if the Company fails or refuses
to timely pay to Employee the benefits due under subparagraphs 10(c) and/or
10(d) of this Agreement, then the benefits under subparagraphs 10(c)(3) and
10(d)(3) shall be increased and the benefits under subparagraphs 10(c)(1) and
(2) and 10(d)(1) and (2) shall each be continued by one additional day for each
day of any such failure or refusal of the Company to pay. In addition, any
Gross-Up Payment due under subparagraphs 10(c)(4) or 10(d)(4) shall be
increased to take into account any increased benefits under this subparagraph
10(h).
11. Non-Assignability. (a) Neither this Agreement nor any right
or interest hereunder shall be assignable by the Employee, his beneficiaries,
or legal representatives without the Company's prior written consent; provided,
however, that nothing in this subparagraph (a) shall preclude (i) the Employee
from designating a beneficiary to receive any benefit payable hereunder upon
his death, or (ii) the executors, administrators, or other legal representative
of the Employee or his estate from assigning any rights hereunder to the person
or person entitled thereunto.
(b) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
12. Binding Effect. (a) This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and assigns. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of the Company or by any
merger or consolidation where the Company is not the surviving corporation, or
upon any transfer of all or substantially all of the Company's assets, or any
other Change in Control. The Company covenants that it will require any
successor, assign or purchaser of its business (whether direct or indirect, by
purchase, merger, acquisition, asset sale, spinoff, consolidation or otherwise)
to (i) expressly assume and agree to perform under this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place, in writing, the Company's obligations and
responsibilities under this Agreement and (ii) agree to notify Employee in
writing of the assumption of this Agreement within 10 days of such assumption.
Failure of the Company to obtain such assumption and agreement prior to the
effective date of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount and
on the same terms to which Employee would be entitled hereunder if Employee
terminates Employee's employment for Good Reason (as defined in paragraph 10
above) following a Change in Control
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or Potential Change in Control of the Company, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed to be the date of Employee's termination.
(b) This Agreement shall be binding upon and inure to the benefit
of the Company and any purchaser, assign, surviving corporation or successor to
the Company, including without limitation any persons acquiring directly or
indirectly all or substantially all of the business and/or assets of the
Company, or otherwise (and such purchaser, assign, surviving corporation or
successor shall thereafter be deemed to be the "Company" for the purposes of
this Agreement). but this Agreement shall not otherwise be assignable,
transferable or delegable by the Company.
(c) This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(d) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder (except as
expressly provided hereunder). Without limiting the generality of the
foregoing, the Employee's right to receive payments hereunder shall not be
assignable, transferable, delegable, whether by pledge, creation of a security
interest or otherwise, or otherwise subject to anticipation, alienation, sale,
encumbrance, charge, hypothecation, or set-off in respect of any claim, debt,
or obligation, or to execution, attachment, levy or similar process , or
assignment by operation of law, other than by a transfer by his will or by the
laws of descent and distribution. Any attempt, voluntarily or involuntarily,
to effect any action prohibited by this paragraph 12 shall be null, void, and
of no effect.
13. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and either delivered in
person, sent by first class certified or registered mail, postage prepaid, or
transmitted by facsimile, if to the Company, at the Company's principal place
of business, and if to the Employee, at his home address most recently filed
with the Company, or to such other address or addresses as either party shall
have designated in writing to the other party hereto.
14. Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
15. Severability. If any provision of this Agreement shall be
determined to be invalid, illegal or unenforceable in whole or in part, neither
the validity of the remaining part of such provision nor the validity or any
other provision of this Agreement shall in any way be affected thereby. In
lieu of such invalid, illegal or unenforceable provision, there shall be added
automatically as part of this Agreement a provision as similar in terms to such
invalid, illegal or unenforceable provision as may be possible and be valid,
legal and enforceable.
16. Waiver. Failure to insist upon strict compliance with any of
the terms, covenants or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall
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any waiver or relinquishment of any right or power hereunder at any one or more
times be deemed a waiver or relinquishment of such right or power at any other
time or times.
17. Entire Agreement; Modifications. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior agreements, oral and written, between the parties
hereto with respect to the subject matter hereof. This Agreement may be
modified or amended only by an instrument in writing signed by both parties
hereto.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Relocation. If at any time the Company requests the Employee
to report for the performance of his services hereunder on a regular or
permanent basis at any location or office more than thirty-five (35) miles from
his current home, and if the Employee consents to do so, the Company shall pay
the Employee's reasonable relocation and moving expenses, including, but not
limited to, the cost of moving his immediate family, expenses incurred while
seeking new housing (including travel by the Employee's spouse) and temporary
living expenses incurred by the Employee or his family for up to ninety (90)
days.
20. Indemnification. (a) Indemnification; Liability Insurance.
The Company shall indemnify and hold the Employee (or his legal representative)
harmless to the full extent permitted by applicable law for all legal expenses
and all liabilities, losses, judgments, fines, expenses and amounts paid in
settlement in connection with any proceeding involving him (including any
action by or in the right of the Company) by reason of his being or having been
a director, officer, employee or agent of the Company or any of its
subsidiaries, Affiliates, or any other enterprise if he is serving or has
served therein at the request of the Company. In addition, the Company shall
cause such subsidiary, Affiliate or enterprise also to so indemnify and hold
the Employee harmless to the full extent permitted by applicable law. The
foregoing shall not be deemed to limit any rights of the Employee pursuant to
applicable indemnification provisions of the Company's Certificate of
Incorporation or By-laws or otherwise. In addition, the Company shall acquire
and maintain directors and officers liability insurance for the benefit of the
Employee on at least as favorable terms and coverage amounts as for any other
officer or director of the Company, such insurance to remain in effect for as
long as reasonably necessary to cover all events occurring during the term of
this Agreement (but in no event less than three years after the term of this
Agreement), regardless of when the claim is made.
(b) Advance of Expenses. In the event of any action, proceeding,
or claim against the Employee arising out of his serving or having served in a
capacity specified in subparagraph (a) above, which in the Employee's sole
judgment requires him to retain counsel (such choice of counsel to be made in
his sole and absolute discretion) or otherwise expend his personal funds for
his defense in connection therewith, the Company shall be obligated to advance
to the Employee (or pay directly to his counsel) reasonable counsel fees and
other costs associated with the Employee's defense of such action, proceeding
or claim; provided, however, that in such event the Employee shall first agree
in writing, without posting bond or collateral, to repay all sums paid or
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advanced to him pursuant to this provision in the event that the final
disposition of such action, proceeding or claim is one for which the Employee
would not be entitled to indemnification pursuant to the provisions hereof.
21. No Set-Off. There shall be no right of set-off or
counterclaim in respect of any claim, debt or obligation against any payment to
or benefit for the Employee provided for in this Agreement.
22. No Mitigation Required. The Employee's rights hereunder upon
termination of employment shall be cumulative with and in addition to any other
rights or remedies he may be entitled to by reason of any such termination. In
addition, the Employee shall have no obligation to mitigate his damages
hereunder, whether by seeking new employment or otherwise, nor shall the amount
of any payment provided for in this Agreement (except as otherwise provided in
subparagraph 9(b) hereof) be reduced by any compensation earned by the Employee
as the result of employment by another employer after the date of termination
of the Employee's employment with the Company, or otherwise.
23. Survival of Rights and Obligations. The terms and provisions
of paragraphs 7, 9, 10, 12, 20, 21, 22, 23, and 24 of this Agreement shall
survive the expiration of the Employment Term.
24. Disputes. Any dispute or controversy arising under, out of,
in connection with or in relation to this Agreement shall, at the election and
upon written demand of either party, be finally determined and settled by
binding arbitration in the city of Dallas, Texas, using a single arbitrator, in
accordance with the Labor Arbitration rules and procedures of the American
Arbitration Association, and judgment upon the award may be entered in any
court having jurisdiction thereof. The arbitrator shall have the power to
order specific performance, mandamus, or other appropriate legal or equitable
relief to enforce the provisions of this Agreement. The Company shall pay all
costs of the arbitration and all reasonable attorney's and accountant's fees of
the Employee in connection therewith.
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IN WITNESS WHEREOF, the Company and the Employee have duly executed
and delivered this Agreement as of the day and year first above written.
EMCARE HOLDINGS INC.
By /s/ XXXXXXX X. XXXXX, XX., M.D.
--------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx., M.D.
--------------------------------
Title: Chief Executive Officer
-------------------------------
/s/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx
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SCHEDULE I
BENEFITS
COMPANY NAME POLICY NUMBER TERM COVERAGAMOUNT
------------ ------------- ---- -------------
United Life & Accident (Chubb) 805113 Annual $500,000
New York Life 41309058 Annual 250,000
Security Mutual 1007665 Annual 250,000
Provident Life & Accident 6334-643484 Annual Monthly disability payments
Northwood Club annual dues
Premier Club annual dues
Auto & Insurance monthly lease payments and insurance
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SCHEDULE II
AFFILIATES
NAME JURISDICTION
---- ------------
Emergency Health Services Associates of New Mexico, P.C. New Mexico
Emergency Health Services Associates, P.A. Texas
EmCare Medical Services of New York, P.C. New York
Emquest Professional Services P.A. Texas
EmCare Radiology Services of Texas, P.A. Texas
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ADDENDUM
This Addendum is hereby attached to that certain Employment Agreement,
dated as of February 5, 1992, between EmCare Holdings Inc., a Delaware
corporation and Xxxxxxx X. Xxxxxx, III (the "Agreement").
1. Capitalized terms used herein but not otherwise defined
herein, shall have the meanings ascribed thereto in the
Agreement.
2. As of January 1, 1994 the annual salary shall be increased to
two hundred forty-five thousand dollars ($245,000) and on
January 1, 1995 and on each succeeding January 1 during the
Employment Term, the annual salary payable to the Employee
hereunder for such calendar year will be increased by an
amount equal to the product of (i) the annual Salary paid to
the Employee during the immediate preceding calendar year
multiplied by (ii) the greater of (x) the percentage increase,
if any in the Consumer Price Index (All Cities-- All Items)
during such calendar year and (y) five percent (5%).
IN WITNESS WHEREOF, the parties hereto have each executed and
delivered this Addendum effective as of January 1, 1994.
EMCARE HOLDINGS INC.
By: /s/ XXXXXXX X. XXXXX, XX., M.D.
-------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx., M.D.
Title: Chief Executive Officer
/s/ XXXXXXX X. XXXXXX, III
----------------------------------------
Xxxxxxx X. Xxxxxx, III
