EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 31,
1994, by and between HEALTHTRUST, INC. - THE HOSPITAL
COMPANY, a Delaware corporation (the "Corporation"),
and R. CLAYTON MCWHORTER ("Employee").
W I T N E S S E T H
WHEREAS, the Corporation desires to recognize
the outstanding contributions made by Employee to the
Corporation and to secure the continuation of his
services with the Corporation; and
WHEREAS, the Compensation Committee of the
Board of Directors of the Corporation (the "Board") at
a meeting held on December 31, 1993, at which meeting a
quorum was present and voted, authorized and directed
the Corporation to enter into an Employment Agreement
with Employee;
NOW THEREFORE, in consideration of the
foregoing and of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Terms and Duties
(a) The Corporation hereby employs Employee
for a term commencing on September 1, 1993, and ending
on August 31, 1996 and Employee hereby agrees to serve
as Chairman of the Board, Chief Executive Officer and
President of the Corporation during said period upon
the terms and conditions herein contained. As used in
this Agreement, the phrase "term of this Agreement"
shall mean the period of time from September 1, 993, to
August 31, 1996, unless the parties agree to extend
this Agreement, pursuant to Paragraph 1(c) below, in
which case the term of this Agreement shall also
include the extension of such period pursuant to such
agreement.
(b) During the term of this Agreement,
Employee shall perform such duties and assignments for
the Corporation as may be determined from time to time
by the Board of Directors of the Corporation and as are
reasonable and customary for a Chairman of the Board,
Chief Executive Officer and President.
(c) The Corporation and Employee hereby
acknowledge that this Agreement may be extended for an
additional period, provided both parties agree on the
terms and conditions in writing at any time prior to
September 1, 1996.
2. Minimum Base Compensation and Bonus
(a) Commencing as of September 1, 1993, the
Corporation agrees to pay Employee a base salary (in
addition to the other compensation and benefits
provided herein) at the rate per year of $800,000.00
Employee's annual base salary payable pursuant to this
Paragraph (including any changes thereto pursuant to
Paragraph 2(b) below) is hereinafter sometimes referred
to as "Employee's Base Compensation". Employee's Base
Compensation shall be payable in accordance with the
customary payroll practices of the Corporation, but in
no event less frequently than monthly. The Board may
increase but no decrease Employee's Base Compensation
at any time by such amounts as it deems proper.
(b) Employer shall be eligible to receive
such bonus awards or other incentive compensation as
shall be determined from time to time by the Board in
its sole discretion. Nothing contained in this
Agreement shall preclude the Board from eliminating,
reducing or otherwise changing any term or condition of
any such bonus award.
3. Participation in Benefit Plans
While employed under this Agreement, Employee
shall be eligible to participate in all executive
compensation and employee benefit plans or programs
generally applicable to senior management employees of
the Corporation. Except as otherwise provided herein,
any such participation shall be in accordance with the
provisions of such plans or programs and nothing
contained in this Agreement is intended to or shall be
deemed to affect adversely any of the Employee's rights
as a participant under any such plan or program.
Nothing in this Agreement shall preclude the
Corporation from terminating or amending any such plan
or program so as to eliminate, reduce or otherwise
change any benefit payable thereunder.
4. Vacation
Employee shall be entitled to vacation in
accordance with the policies of the Corporation in
effect from to time.
5. Reimbursement of Business Expenses
Employee is authorized to incur reasonable
expenses related to and for promoting the business of
the Corporation, including expenses for entertainment,
travel and similar items, and any such expenses paid by
Employee from his own funds shall be promptly
reimbursed to him by the Corporation in accordance with
the policies and procedures of the Corporation in
effect from time to time.
6. Source of Payments
In any case were coverage or benefits are
required to be provided under this Agreement but cannot
be provided in accordance with the terms of the
Corporation's plans which are maintained for the
Corporation's senior executive or other employees
generally, or both, such coverage and benefits shall be
provided from the general assets of the Corporation.
No special or separate fund shall be established and no
other segregation of assets shall be made to assure the
payment of any such amounts. To the extent that any
person acquires a right to receive payments from the
Corporation under this Agreement, such right shall be
no greater than the right of an unsecured general
creditor of the Corporation.
7. Termination by the Corporation of
Employee's Employment for Cause
(a) Notwithstanding any other provision of
this Agreement, the Corporation shall have the right to
terminate Employee's employment upon written notice to
Employee that the Board has found, based upon
reasonable evidence presented in writing to Employee,
that Employee has materially breached this Agreement by
engaging in dishonest or fraudulent actions or willful
misconduct or has materially harmed the Corporation by
performing his duties in a grossly negligent manner.
Employee shall upon receipt of such written notice and
evidence immediately cease to be an employee of the
Corporation.
(b) In case of a termination by the
Corporation on account of breach hereunder pursuant to
Paragraph 7(a) above, the Corporation's obligations to
Employee under this Agreement shall cease upon the
effective date of such termination and the Corporation
shall not be liable to continue paying Employee the
Employee's Base Compensation nor shall Employee be
entitled to any rights or benefits pursuant to
Paragraph 3 above, other than as may be provided under
the terms of such plans which are generally applicable
to participants who have terminated employment under
similar circumstances.
8. Disability
(a) In the event of the total disability (as
hereinafter defined) of Employee during the term of
this Agreement, the Corporation shall continue to pay
Employee's Base Compensation and shall continue
Employee's participation in its various executive
compensation and employee benefit plans and programs
pursuant to Paragraph 3 above during the period of this
total disability until the end of the term of this
Agreement; provided, however, that in the event
Employee is totally disabled for a continuous period
exceeding one hundred fifty (150) days the Corporation
may, at its election, terminate Employee's employment
upon thirty (30) days' written notice, in which event
Employee shall be entitled to receive the benefits
described in Paragraph 8(b) below. As used in this
Agreement, the term "total disability" shall mean the
complete inability of Employee to perform all of the
duties of his position with the Corporation by reason
of any physical or mental ailment.
(b) In the event that Employee is totally
disabled for a period described in Paragraph 8(a) above
and the Corporation elects to terminate Employee's
employment, the Corporation shall continue to pay
Employee a disability benefit ("Disability Benefit")
equal to Employee's Base Compensation in effect at the
time of such termination for the greater of (i) the
entire term of this Agreement and (ii) one year from
the date of termination. Payment of the Disability
Benefit under this Paragraph 8(b) shall commence within
thirty (30) days of the termination of Employee's
participation (including dependent coverage) in any
life, accident, disability, health and dental insurance
plans, and any other similar welfare plans of the
Corporation in effect immediately prior to the
effective date of the termination shall be continued,
or equivalent benefits provided, by the Corporation
during the period in which the Disability Benefit is
paid at no cost to Employee or his dependents.
(c) If Employee becomes entitled to and
receives other disability benefits under any disability
payment plan paid for by the Corporation, including
disability insurance, the Disability Benefit otherwise
payable by the Corporation to Employee pursuant to
Paragraph 8(b) above shall be reduced (but not below
zero) by the amount of any such other disability
benefits received by him, but only to the extent such
benefits are attributable to payments made by the
Corporation.
9. Death
If Employee should die during the term of
this Agreement, the Corporation shall continue to pay
his estate or designated beneficiary or beneficiaries a
death benefit ("Death Benefit") equal to Employee's
Base Compensation in effect at the date of his death
for the greater of (i) the entire term of this
Agreement or (ii) one year from the date of his death.
Payment of the Death Benefit shall commence within
thirty (30) days of the date of Employee's death. The
Corporation shall also pay Employee's estate or
designated beneficiary or beneficiaries such other
death benefits as become payable under the terms of
such travel accident, life insurance, and employee
stock ownership plan, and other executive compensation
and employee benefit plans and programs of the
Corporation in which Employee was a participant on his
date of death. In addition, dependent coverage
provided by any life, accident, disability, health and
dental insurance plans, and any other similar welfare
plans of the Corporation in effect immediately prior to
the date of Employee's death shall be continued, or
equivalent benefits provided, by the Corporation during
the period in which the Death Benefit is paid at no
cost to Employee or his dependents.
10. Resignation as Board Member
In any instance where Employee ceases to be
an employee of the Corporation, no matter what the
reason, and if Employee is then a member of the board,
Employee hereby agrees that, unless otherwise requested
by the board, he shall simultaneously submit his
resignation as a member of the Board in writing on or
before the date he ceases to be an employee of the
Corporation. If Employee fails or neglects to submit
such resignation in writing, this Paragraph 10 may be
deemed by the Corporation to constitute Employee's
written resignation as a member of the Board effective
on the same date that Employee ceases to be an employee
of the Corporation.
11. Waiver
Failure of either party hereto to insist upon
strict compliance by the other party with any term,
covenant or condition hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall
any waiver or relinquishment or failure to insist upon
strict compliance of any right or power hereunder at
any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time
or times.
12. Withholding of Taxes
The Corporation may withhold from any
benefits payable under this Agreement all federal,
state, city or other taxes as shall be required
pursuant to any law or governmental regulation or
ruling.
13. Facility of Payment
If the Board shall find the person to whom
any amount is or was payable hereunder is unable to
care his affairs because of illness or accident, or is
a minor, or has dies, then the Board, if it so elects,
may direct than any payment due him or his estate
(unless a prior claim therefore has been made by a duly
appointed legal representative) or any part hereof be
paid or applied for the benefit of such person or to or
for the benefit of his spouse, children or other
dependents, an institution maintaining or having
custody of such person, any other person deemed by said
Board to be a proper recipient on behalf of such person
otherwise entitled to payment, or any of them, in such
manner and proportion as the Board may deem proper.
Any such payment shall be in complete discharge of the
liability of the Corporation therefor.
14. Prior Agreements
This instrument sets forth the entire
agreement between the parties hereto with respect to
the subject matter hereof.
15. Consolidation or Merger
Nothing in this Agreement shall preclude the
Corporation from consolidating or merging into or with,
or transferring all or substantially all of its assets
to, another corporation or other entity (the "Successor
Employer") which assumes this Agreement and all
obligations of the Corporation hereunder by operation
of law or affirmative action. Upon such a
consolidation, merger or transfer of assets and
assumption, the term "Corporation" shall refer to the
Successor Employer and this Agreement shall continue in
full force and effect.
16. Unsecured Creditor Status
Employee shall have no right, title or
interest whatsoever in or to any investments which the
Corporation may make to aid it in meeting its
obligations under this Agreement. Nothing contained in
this Agreement, and no action taken pursuant to its
provision, shall create or be construed to create a
trust of any kind, or a fiduciary relationship between
the Corporation and Employee, his beneficiary, legal
representative or any other person. To the extent that
any person acquires a right to receive payments from
the Corporation under this Agreement, such right shall
be no greater than the right of an unsecured general
creditor of the Corporation. All payments to be made
hereunder shall be paid from the general funds of the
Corporation and no special or separate fund shall be
established and no segregation of assets shall be made
to assure payment of such amounts.
17. Non-Alienation of Benefits
Except insofar as applicable law may
otherwise require, no amount payable to or in respect
of Employee at any time under this Agreement shall be
subject in any manner to alienation by anticipation,
sale, transfer, assignment, bankruptcy, pledge,
attachment, change or encumbrance of any kind, and any
attempt to so alienate, sell, transfer, assign, pledge,
attach, charge or otherwise encumber any such amount,
whether presently or thereafter payable shall be void;
provided, however, that nothing in this Paragraph 17
shall preclude Employee from designating a beneficiary
or beneficiaries to receive any benefit on his death.
18. Benefits
Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of
and be binding upon the Corporation, its successors and
assigns, and upon Employee, his beneficiaries, heirs,
executors and administrators.
19. Amendment
No amendment or modification of this
Agreement shall be deemed effective unless and until
executed in writing by Employee and the Corporation.
20. Severability
If for any reason any provision of this
Agreement shall be held invalid, such invalidity shall
not affect any other provision of this Agreement not
held so invalid, and all other such provisions shall t
the full extent consistent with law continue in full
force and effect. If any such provision shall be held
invalid in part, such invalidity shall in no way affect
the remaining portion of such provision not held so
invalid, and the remaining portion of such provision,
together with all other provisions of this Agreement,
shall likewise to the full extent consistent with law
continue in full force and effect.
21. Headings
The headings of paragraphs are included
solely for convenience of reference and shall not
control the meaning or interpretation of any of the
provisions of this Agreement.
22. Governing Law
This Agreement shall be governed by the laws
of the State of Tennessee.
23. Notices
Any notices required or desired to be given
pursuant to this Agreement shall be sufficient if in
writing and transmitted by hand delivery or by
registered or certified mail. All communications to
Employee shall be addressed to:
R. Clayton McWhorter
4500 Post Road, #F66
Nashville, TN 37205
All communications to the Corporation shall
be addressed to:
Board of Directors
Healthtrust, Inc. - The Hospital Company
4525 Harding Road
Nashville, TN 37205
Notwithstanding the foregoing, the
Corporation and Employee may, by notice in accordance
herewith, designate a different address than contained
herein.
IN WITNESS WHEREOF, the Corporation has
caused its name to be ascribed to this Agreement by its
duly authorized representative and Employee has
executed this Agreement as of the day and year first
above written.
HEALTHTRUST, INC. - THE
HOSPITAL COMPANY
By: s/Richard W. Hanselman
Name: Richard W. Hanselman
Title: Chairman of the
Compensation Committee
s/R. Clayton McWhorter
R. Clayton McWhorter