EXHIBIT 7
EMPLOYMENT AGREEMENT
This Employment Agreement (hereinafter referred to as the "Agreement") is
made and entered into this 10th day of December, 1996 by and among American
Medical Response, Inc., a Delaware corporation ("American"), STAT Healthcare,
Inc., a Delaware corporation (hereinafter referred to as "Employer"), and
Xxxxxxx X. Xxxxxxxxx, (hereinafter referred to as "Employee").
WHEREAS, American is engaged in the healthcare services businesses and
expects to, pursuant to an Agreement and Plan of Merger dated as of October 7,
1996 among American, Employer and SHI Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of American ("Acquisition Sub"), under which
Acquisition Sub will merge with and into Employer (the "Merger"), acquire all of
the outstanding stock of Employer;
WHEREAS, Employee is or will be employed by Employer in a confidential
relationship wherein Employee, in the course of his employment, will become
familiar with and aware of information as to the specific manner of doing
business and the customers of the Employer, American and their respective
subsidiaries and affiliates and future plans with respect thereto, all of which
will be established and maintained at great expense to Employer, American and
their respective subsidiaries and affiliates.
WHEREAS, Employee recognizes that the business of Employer, American and
their respective subsidiaries and affiliates depends upon a number of trade
secrets, including secret techniques, methods and data. The protection of these
trade secrets is of critical importance to Employer, American and their
respective subsidiaries and affiliates.
WHEREAS, subject to the terms and conditions hereinafter provided, Employer
desires to employ Employee and Employee desires to be employed by Employer; and
NOW, THEREFORE, in consideration of the employment of Employee and the
compensation to be paid by Employer to Employee, the Employee hereby accepts
employment hereunder subject to the terms and conditions stated below including
the agreement of Employee not to enter into certain competitive activities with
the Employer, as follows:
1. TERM. This Agreement shall commence upon the consummation of the Merger
(the "Effective Date") and shall continue for a period of three years or until
terminated in accordance with the provisions set forth herein.
2. DUTIES. The Employee shall perform the following duties pursuant to
this Agreement:
a. Employee shall be employed at Employer's office in Houston, Texas, or at
such other location(s) as may be determined by Employer.
b. Employee shall be actively involved in Employer's day-to-day activities
and will have the duties assigned to Employee from time to time by the
Employer.
c. Employee shall be available to assist Employer and its subsidiaries and
related entities in any way deemed appropriate, commensurate with the
duties of a corporate executive.
c. All funds received by Employee on behalf of Employer, if any, shall be
held in trust for Employer and shall be delivered to Employer as soon as
practicable.
d. Employee acknowledges that Employer is an equal opportunity employer,
and that it is Employer's established policy not to discriminate on the
basis of age, marital status, race, color, sex, religion or national
origin, or to violate any federal or state anti-discrimination law.
Employee shall be responsible for carrying out and implementing the
foregoing policy throughout the operations and activities of Employer.
3. COMPENSATION PACKAGE. For all services provided, Employee shall be
compensated as follows:
a. ANNUAL SALARY. Effective as of the Effective Date, Employer shall pay
Employee an annual salary of $150,000, payable in accordance with
Employer's customary pay practices as from time to time in effect.
b. INCENTIVE COMPENSATION. Employee may be entitled to receive additional
compensation as set forth below:
(i) performance Bonuses authorized by the Compensation Committee of the
Board of Directors of American.
(ii) participation in employee benefit programs subject to and on a
basis consistent with the terms, conditions and overall administration of
such programs.
c. EXPENSES REIMBURSED. Employee shall be entitled to reimbursement for
expenses incurred on behalf of Employer in the performance of his duties
hereunder, consistent with Employer's reimbursement policies.
d. DISABILITY PAY. Employee shall be entitled to receive for a period of
up to six (6) months his base salary during such time as, because of
illness or physical or mental disability or other incapacity, he is
unable to perform his duties under this Agreement. Such amounts payable
shall be offset by any amounts paid to Employee under disability
insurance policies maintained by Employer.
e. STOCK OPTION. The Employee may receive incentive stock options as
recommended by Employer and upon the approval of the Compensation
Committee of the Board of Directors of American.
4. SOLE EMPLOYMENT. During the term of this Agreement, the Employee shall
devote his entire time, attention and best efforts to advancing the business and
good reputation of Employer, its subsidiaries and affiliates, and shall not
during the term of his employment provide personal services for compensation,
whether received directly or indirectly, to any other business or commercial
enterprise, either alone, or as a member of a partnership, or an officer,
director, shareholder or employee of any other corporation or business, or as a
consultant or independent contractor. This Section shall not prevent Employee
from making passive investments, so long as such investments do not require
Employee to perform any services which interfere with the performance of
Employee's duties under this Agreement.
5. CONFIDENTIALITY, NON-DISCLOSURE AND OWNERSHIP OF CONFIDENTIAL
INFORMATION. The Employee acknowledges that during his employment, he will gain
access to, or possession or knowledge of, numerous trade secrets, confidential
information and other valuable properties, including, but not limited to,
hospital and healthcare facility client lists, client files and records, lists
of potential clients, prospects or targets, and/ or other market and marketing
data and plans, price books, promotional devices and methods, business methods,
manuals and plans, business and sales techniques and research and development
(hereinafter referred to collectively as "Confidential Information").
Confidential Information shall not include information in the public domain or
attainable from information generally available to the public. Employee
acknowledges that such Confidential Information is unique and a valuable asset
which is owned solely by Employer and is to be used only for Employer's benefit.
Employee shall not, during or after the term of employment, disclose, divulge,
reveal, transfer, reproduce, sell, capitalize upon or take advantage of such
Confidential Information and in addition, Employee shall exercise all reasonable
efforts and precautions to protect such Confidential Information form
misappropriation, misuse, disclosure, breach of confidentiality, or other
conduct or action inconsistent with Employer's rights. Upon termination,
Employee shall return immediately to Employer all Employer's property
(including, without limitation, Confidential Information) in Employee's
possession or control.
6. CONFIDENTIAL INFORMATION: COVENANT NOT TO COMPETE.
a. Employer acknowledges that Employee has previously been involved in an
executive capacity for a long period of time in the healthcare services
business and that Employee has acquired substantial knowledge concerning
that business as a result of such experience. Employee acknowledges that
his
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contact with physicians and medical institutions as a result of his
employment by Employer will result in a personal relationship being
established between Employee and such physicians and/or the
administration of such medical institutions whereby Employee could
influence the future actions of such medical institutions and/or
physicians relative to the renewal or cancellation of contractual
relationships between Employer, its subsidiaries and/or affiliates and
such medical institutions and/or physicians. Furthermore, Employee
acknowledges and agrees that Employee's employment by Employer will
result in the acquisition by Employee of confidential information
concerning the method of operation and administration of Employer and its
subsidiaries and affiliates and of medical institutions and physicians
with whom Employer and its subsidiaries and affiliates transact business,
including, but not limited to, fee schedules, formulas and special client
requirements. Employee acknowledges and agrees that such confidential
information would create an unfair advantage in the event Employee were
to attempt to solicit or provide services of a similar nature to a
medical client of Employer, its subsidiaries or affiliates.
Accordingly, Employee agrees not to disclose Confidential
Information and agrees not to interfere with the contractual
relationship between Employer, its subsidiaries, and/or affiliates and
any medical institution and/or physician for a period of two (2) years
after termination of employment.
b. Employee agrees, during the term hereof, and for a period of two (2)
years following the termination of employment hereunder, that he will
not, directly or indirectly, by himself, or as a shareholder, employee,
director, officer, partner, contractor or agent of another, enter into
any business or activity anywhere within 100 miles of any location in
which Employer or any of its subsidiaries or affiliates conducts
non-transportation business in competition with Employer or its
subsidiaries or affiliates and that would involve the following: (i) the
solicitation of hospitals or other healthcare facilities to provide
emergency department, kidney dialysis, or healthcare management services
or other contract physician services similar to or in competition with
such services provided by Employer or any of its subsidiaries or
affiliates providing similar services; or (ii) the solicitation of
hospitals or other healthcare facilities that are clients or prospective
clients (potential clients as to which a marketing presentation has been
made within six (6) months of the date of termination of this Agreement)
of Employer to provide any physician staffing, recruitment or management
services similar to or in competition with services provided by Employer
or its subsidiaries and with which Employee was associated.
Notwithstanding the foregoing, Ownership of up to 5% of the outstanding
equity or debt securities of any publicly traded entity which engages in
such activities shall not of itself constitute a breach of this
Agreement.
c. Employee acknowledges that Employer is a party to those certain
Professional Services Agreements with Columbia/HCA Healthcare Corporation
("Columbia") dated as of February 1, 1996 and October 1, 1996,
respectively, (collectively, the "Columbia Agreements") whereby Employer
provides services to certain Columbia facilities ("Facilities"). Employee
agrees that, for a period commencing on the date hereof and continuing
until two (2) years following termination of the Columbia Agreements, he
will not, without prior written approval of Columbia, either individually
or as an employee, agent, officer or director of a third party, directly
or indirectly (i) render any professional, administrative, advisory or
consulting services to or for any physician clinic, independent physician
organization or similar physician organization within a ten mile radius
of any hospital or similar facility to which Employer has provided
services under the Columbia Agreements, or (ii) solicit, raid, entice or
induce any person who is (or was at any time within the one year period
immediately preceding such termination) an employee or independent
contractor of any Facility to (y) terminate his employment or contract
with such Facility, or (z) become employed by or contract with any other
person, firm, or corporation, and Employee will not approach any such
employee or independent contractor for such purpose or authorize or
knowingly approve the taking of such actions by any other persons.
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7. SOLICITATION OF OTHER EMPLOYEES. Employee shall not, until two (2)
years subsequent to the termination of employment, solicit or seek to influence,
either directly or indirectly, any employee or any physician or healthcare
provider under contract with Employer or any of its subsidiaries or affiliates,
to enter into any employment agreements, independent contractor arrangement, or
any other contractual arrangement whereby such individual would perform services
for compensation, either directly or indirectly, for any person, firm,
corporation or other entity or business that provides products or services in
competition with the Employer or any of its subsidiaries or affiliates.
8. TRANSFER OF AMERICAN COMMON STOCK. Employee acknowledges and agrees
that as an executive he will be subject to American's policies with respect to
transactions in American Common Stock, as such policies are in effect from time
to time. Employee acknowledges that, as of the Effective Date, he is the owner
of 703,730 shares (the "Employee Shares") of the common stock of American, $.01
par value ("American Common Stock"), which Employee Shares represent all of the
shares of American Common Stock held by Employee. In the event that Employee
shall, without the prior written consent of American, sell, assign, pledge,
hypothecate or otherwise dispose of, directly or indirectly, any Employee Shares
(including any shares of American Common Stock distributed in respect of the
Employee Shares), except in such amounts and on or following such dates (the
"Release Dates") set forth on SCHEDULE A hereto, Employee shall pay to Employer
on or as soon as practicable following each such Release Date the product of (y)
the number of shares of American Common Stock sold by Employee in excess of that
permitted hereunder as of such Release Date (the "Excess Shares"), and (z) the
difference between (1) the weighted average selling price of the Excess Shares
and (2) the closing price of American Common Stock as of such Release Date or,
if such Release Date is not a business day, on the next business day following
such Release Date, as reported in The Wall Street Journal.
9. BREACH AND REMEDIES. Employee acknowledges that the breach or
threatened breach of any of the covenants set forth in this Agreement will
result in immediate and irreparable injury to Employer. Accordingly, Employee
agrees that in addition to any rights or remedies available to Employer for a
breach or threatened breach by Employee of any of the provisions set forth
above, Employer shall be entitled to injunctive relief to enforce the
obligations of Employee contained therein. Nothing herein shall be construed as
prohibiting Employer from pursuing any other legal or equitable remedies that
may be available to it for any such breach or threatened breach, including the
recovery of damages from Employee. In the event that any of the provisions of
this Agreement are found to be unenforceable or void (either in whole or in
part), then the offending portion shall be construed as valid and enforceable
only to the extent permitted by law and the balance of this Agreement shall
remain in full force and effect.
10. TERMINATION. This Agreement may be terminated as follows:
a. VOLUNTARY TERMINATION. Either party may terminate this Agreement
without cause at any time upon sixty (60) days prior written notice to
the other.
b. TERMINATION FOR CAUSE. This Agreement may be terminated by Employer at
any time for cause upon written notice to Employee, which notice shall
specify the reason for termination. For purposes of this Section, cause
shall include the following: fraud; substantial and continuous non-
performance of assigned duties and unlawful activities for which Employee
is convicted in a jurisdiction of the United States; and material breach
of an express term of this Agreement.
c. TERMINATION UPON DEATH OR DISABILITY. This Agreement shall terminate
upon the death or permanent disability of Employee. Employee shall be
deemed to be disabled if he qualifies as such for purposes of receiving
long term or permanent disability payments under the group disability
insurance program of Employer or in the event that he is unable to
regularly and consistently perform his normal duties as contemplated
hereunder for a continuous period of twelve (12) months.
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d. TERMINATION BENEFITS. Upon termination of Employee's employment
pursuant to paragraph 10.c. or by Employer pursuant to paragraph 10.a.,
Employee shall be entitled to receive (i) all cash compensation earned
under this Agreement to the date of termination PLUS (ii) an amount equal
to last year's cash bonus, if any, prorated for any partial year prior to
termination PLUS (iii) base compensation as in effect on the date prior
to termination for an additional period of 12 months plus (iv) subject to
any employee contribution applicable to the Employee on the date of
termination, for a 12 month period following the date of termination
Employer shall continue to pay for the cost of the Employee participation
in Employer's group medical and dental insurance plans, provided that
Employee is entitled to continue such participation under applicable
state and federal law and plan terms.
e. SURVIVAL OF CERTAIN PROVISIONS. In the event of termination of
Employee's employment for any reason provided in this paragraph 10, all
rights and obligations of Employer and Employee under this Agreement
shall cease immediately, except that Employee's obligations under
paragraphs 2.d., 5, 6, 7, 8 and 9 hereof shall survive such termination,
and thereafter Employee shall have the right to receive, and Employer
shall be obligated to pay, the compensation as set forth in paragraph
10.d.
11. CONFIDENTIALITY. Employee agrees to keep this Agreement and its terms
confidential except to the extent that disclosure is required by a lawfully
constituted judicial or governmental authority or to the extent that such
disclosure is authorized by the prior written consent of Employer and/or
Employee.
12. ENTIRE AGREEMENT. This Agreement supersedes and cancels any employment
agreement previously executed by the Employee and Employer, its subsidiaries or
affiliates. This Agreement contains the entire understanding between the parties
hereto and supersedes and cancels any prior oral or written understanding and/or
agreements between them respecting any subject matter of this Agreement. This
Agreement may be amended or modified only in writing signed by both parties
hereto.
13. SEVERABILITY. If any provision, term, condition or clause of this
Agreement or the application thereof shall be invalid or unenforceable to any
extent, the remainder of this Agreement shall not be affected thereby and shall
be enforced to the greatest extent permitted by law.
14. GOVERNING LAW. THIS AGREEMENT IS MADE AND ENTERED INTO IN THE STATE OF
TEXAS AND IS TO BE CONSTRUED IN ACCORDANCE WITH AND TAKE EFFECT UNDER THE LAWS
OF THE STATE OF TEXAS.
15. ASSIGNMENT. No party shall have any right to assign, mortgage, pledge,
hypothecate or encumber this Agreement, in whole or in part, or any benefit or
any rights accruing hereunder, without in any such case first obtaining the
prior written consent of the other party hereto, except that Employer may assign
this Agreement to a subsidiary or affiliate of Employer or American, provided
that in the event of such an assignment, Employer shall remain responsible for
its obligations hereunder. All rights hereunder are personal to the Employee and
shall cease upon the termination of this Agreement.
16. NOTICE. Any notice, or other written communication to be given
pursuant to this Agreement for whatever reason shall be deemed duly given and
received (a) if delivered personally, from the date of delivery, or (b) by
certified mail, postage prepaid, return receipt requested, three (3) days after
the date of mailing, addressed to the below parties as follows:
TO: American Medical Response, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
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TO: Xxxxxxx X. Xxxxxxxxx
STAT Healthcare, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
17. MISCELLANEOUS. Any protection, benefits, rights or other provisions
given to Employer in this Agreement shall also be deemed to apply to, protect
and inure to the benefit of any subsidiary, affiliate or other business or
person related or connected to Employer. All rights of the Employer expressed in
this Agreement are in addition to any rights available under the common law or
other legal principles. Section or paragraph titles or captions contained in
this Agreement are inserted only as matter of convenience and for reference and
in no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof. All pronouns and any variation thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of person or persons, firm or firms, corporation or corporations, and
as context may require.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
AMERICAN MEDICAL RESPONSE, INC.
By: /s/ XXXX X. XXXXXXX
-----------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
STAT HEALTHCARE, INC.
By: /s/ XXXXXX X. XXXXXXX, M.D.
-----------------------------------------
Title: PRESIDENT--EMERGENCY PHYSICIANS
EMPLOYEE:
/s/ XXXXXXX X. XXXXXXXXX
---------------------------------
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SCHEDULE A
PERMITTED TRANSFER PERCENTAGE RELEASE DATE
------------------------------------------------------------ -----------------
Up to 25% of the Employee Shares............................ June 30, 1997
Up to 50% of the Employee Shares............................ December 31, 1997
Up to 75% of the Employee Shares............................ June 30, 1998
Up to 100% of the Employee Shares........................... December 31, 1998
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