Exhibit 10.5
EMPLOYMENT AGREEMENT
This Agreement by and between Emergency Medical Services L.P., a
Delaware limited partnership ("Company"), and Dighton Packard, M.D.
("Executive") is made and entered into this 19 day of April, 2005, effective as
of the date set forth below.
RECITALS
WHEREAS, Executive desires to be employed by the Company in a
confidential relationship during which Executive will become familiar with and
aware of information as to the specific manner of doing business, strategic
plans for future business, and the identity of customers of the Company and its
subsidiaries, affiliates and managed entities, all of which will be established
and maintained at great expense to the Company; this information is a trade
secret and constitutes the valuable goodwill of the Company; and
WHEREAS, Executive recognizes that the Company and its subsidiaries and
managed entities depend upon a number of trade secrets (including secret
techniques, methods and data) in the course of providing services to their
clients and that the protection of these trade secrets is of critical importance
of the Company and its subsidiaries; and
WHEREAS, the Company and its subsidiaries will sustain great loss and
damage if Executive should violate the provisions of this Agreement,
particularly with respect to confidential information and restrictions on
competition. Monetary damages for such losses would be extremely difficult to
measure.
NOW THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, effective
as of the time of the effective date, it is hereby agreed as follows:
1. Employment.
A. The Company shall employ the Executive as Chief Medical
Officer, and the Executive shall serve in such capacity,
performing such duties as are consistent with the position,
along with such other duties and responsibilities assigned to
the Executive by the Chief Executive Officer ("CEO") or
President of the Company. The Executive shall devote his best
efforts to the performance of his duties under this Agreement
and shall perform them faithfully, diligently, competently and
in a manner consistent with the policies of the Company as
determined from time to time by the CEO or President of the
Company.
B. The Executive shall report to the CEO or President of the
Company on all matters pertaining to his duties hereunder.
C. The Executive shall devote such time as is necessary to
fulfill Executive's duties under this Agreement. During such
time as Executive is employed by Texas EM-I Medical Services,
P.A. ("Texas EM-I") as Baylor System Chief of Emergency
Medicine, Executive shall coordinate his efforts as Baylor
System Chief with his efforts under this Agreement so as to
most effectively fulfill his obligations in both positions.
The parties further anticipate that Executive will on occasion
provide clinical services under his Employment Agreement with
Texas EM-I.
D. On or before July 1, 2006, Executive shall reduce the number
of clinical shifts that he provides under his Employment
Agreement with Texas EM-I, and accordingly increase the number
of days that he provides services under this Agreement by at
least thirty (30) days annually. Executive shall agree in
writing on or before July 1, 2006, to provide such additional
services at which point Executive's compensation shall be
adjusted in accordance with paragraph 3.A.1 of this Agreement.
E. The Executive shall not serve as an officer or director (or
the equivalent position) of any entity other than Company or
its affiliates or managed entities, and shall not receive fees
or other remuneration for work performed either within or
outside the scope of his employment without prior written
consent of the President of the Company.
2. Term of Employment. This Agreement shall commence on April 1, 2005,
shall continue for a period of one (1) year, and shall automatically
renew for additional one (1) year periods thereafter, unless either
party provides the other with notice of termination pursuant to
paragraph 7 of this Agreement.
3. Compensation.
A. As full compensation for all services rendered by the
Executive pursuant to this Agreement, the Company shall pay,
or shall cause a Subsidiary to pay, to the Executive a salary
of $260,000 per year ("Base Salary"), less applicable
withholdings, subject to adjustment as set forth below. The
Base Salary shall be payable twice monthly on the 15th
business day and last business day of each month. Executive's
compensation shall be reviewed by the President annually
during the Company's normal review period, beginning in the
year following the first anniversary of the Effective Date.
1. Upon Executive's agreement to devote additional time
and effort under this Agreement in accordance with
paragraph 1.D of this Agreement, Company shall
increase Executive's Base Salary by the sum of One
Hundred Thousand Dollars ($100,000) annually.
2. If during the initial term or any renewal term of
this Agreement, Executive agrees in writing to cease
providing clinical services and dedicate a minimum of
one hundred fifty (150) days annually to the
exclusive provision of services under this Agreement,
Company shall increase
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Executive's Base Salary by the sum of Two Hundred
Thousand Dollars ($200,000) annually.
3. Upon Executive's agreement to devote all of his
business efforts to the full-time provision of
services under this Agreement, Company and Executive
shall negotiate in good faith an adjustment to
Executive's compensation under this Agreement such
that the compensation represents fair market value
for the services of a Chief Medical Officer of a
company of like size, scope and complexity.
B. The Executive will be eligible to participate in a short term
incentive plan. For fiscal years commencing September 1, 2004
and thereafter, the Executive's target bonus under such plan
will be 50% of Base Salary (pro-rated for a partial fiscal
year, including the first fiscal year in the term). The
Executive's right to receive any bonus under such plan shall
be determined based upon performance targets for each year
fixed by the CEO or President thereof; provided, that in the
case of the partial fiscal year beginning on the Effective
Date the Executive's right to receive any bonus under such
plan shall be based on the achievement of the budget/business
plan of EmCare and AMR for the fiscal year beginning August
31, 2004 approved by the board of directors of Laidlaw
International, Inc.
4. Fringe Benefits; Expenses.
A. The Executive shall be entitled to participate in all health
and related employee benefit plans to the extent his position,
title and tenure make him eligible, on a basis consistent with
the terms of such plans as offered to Company executives
generally.
B. The Company shall reimburse the Executive for all reasonable
and necessary expenses incurred by him in connection with the
performance of services hereunder, in accordance with the
Company's standard policies and procedures.
5. Disability or Death.
A. If, as the result of any physical or mental disability, the
Executive shall have failed or is unable to perform his duties
for a period of ninety (90) consecutive days, the Company may,
by notice to the Executive subsequent thereto, terminate this
Agreement as of the date of the notice without any further
payment or the furnishing of any benefit by the Company under
this Agreement, unless otherwise required by applicable law.
B. The term of the Executive's employment under this Agreement
shall terminate upon his death without any further payment or
the furnishing of any benefit by the Company under this
Agreement (other than accrued and unpaid base salary and
commissions and expenses and benefits which have accrued
pursuant to any plan or by law).
6. Restrictive Covenants.
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A. Executive agrees that during the term of this Agreement, and
for twenty-four (24) months thereafter, Executive will not in
any manner, without the prior written consent of the Company,
directly or indirectly: (1) disclose or divulge to any person,
entity, firm, company or employer, or use for Executive's own
benefit or the benefit of any other person, entity, firm,
company or employer directly or indirectly in competition with
the Company, any knowledge, information, business methods,
techniques or data of the Company; (2) solicit, divert, take
away or interfere with any of the customers, accounts, trade,
business patronage, employees or contractual arrangements of
the Company; (3) compete with the Company or enter into any
contractual arrangements for the provision of medical
transportation services or physician practice management
services as related to hospital emergency department and
hospitalist outsourcing with any governmental authority,
provider or hospital with which Executive has come into
contact while an employee of the Company; or (4) either
individually or in partnership, or jointly in conjunction with
any other person, entity or organization, as principal, agent,
consultant, lender, contractor, employer, employee, investor,
shareholder, or in any other manner, directly or indirectly,
manage, carry on, establish, control, engage in, invest in,
offer financial assistance, financial services to, or permit
his name to be used by any business that competes with the
then-existing business of the Company, provided that the
Executive shall be entitled, for investment purposes, to
purchase and trade shares of a public company which are listed
and posted for trading on a recognized stock exchange and the
business of which public company may be in competition with
the business of the Company, provided that the Executive shall
not directly or indirectly own more than five percent (5%) of
the issued share capital of the public company, or participate
in its management or operation, or in any advisory capacity
within the time limits set out herein. Solely for the purposes
of this paragraph 6, the term "Company" shall mean the
Company, its subsidiaries, its affiliates, their subsidiaries
and companies for whom such entities provide services.
B. Executive further agrees that for a period of twenty-four (24)
months following termination of employment, however caused, he
will not solicit for hire or rehire, or take away, or cause to
be hired, or taken away, employee(s) of the Company.
C. It is the intention of the parties to restrict the activities
of Executive in a manner which reasonably protects the
legitimate business interests of the Company. In the event
this paragraph 6 is deemed overly broad or unenforceable by a
court of competent jurisdiction, it is the intent of the
parties that this paragraph be enforced to the fullest extent
allowed under applicable law, and be reformulated by such
court to the extent necessary to so enforce it.
D. Executive agrees that the damages and remedies at law for any
breach under this paragraph would be inadequate and that, in
addition, in the event of a breach under this paragraph, the
Company may apply to a court of competent jurisdiction and be
entitled to an injunction by such court to prevent a breach or
further breach
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thereof on the part of the Executive. Such injunction shall be
in addition to damages or other relief afforded under this
Agreement.
E. The Executive acknowledges that the agreements provided in
this Section 6 were an inducement to the Company to enter into
this Agreement and that the remedy at law for breach of his
covenants under this Section 6 will be inadequate.
Accordingly, in the event of any breach or threatened breach
by the Executive of any provision of this Section 6, the
Company shall be entitled, in addition to all other remedies,
to an injunction restraining any breach by Executive.
F. All memoranda, notes, records, or other documents made or
composed by the Executive, or made available to him during the
term of this Agreement concerning or in any way relating to
the business or affairs of the Employer or clients shall be
the Company's property and shall be delivered to the Employer
on the termination of this Agreement or at any other time at
the request of the Employer.
G. Executive hereby assigns and agrees to assign all his interest
in any and all conceptions and ideas for inventions,
improvements, discoveries and works, whether or not patentable
or copyrightable, which are conceived or made by Executive
solely or jointly with another during the period of employment
or within one (1) year thereafter and which are related to the
business or activities of the Employer or which Executive
conceives as a result of his employment by the Employer
(collectively, "Proprietary Rights"), to the Employer or its
nominee. All copyrightable Propriety Rights shall be
considered to be "works made for hire". Whenever requested to
do so by the Employer, Executive shall execute any and all
instruments and do such acts that the Employer shall request
to protect the Employer's interest therein. These obligations
shall continue beyond the termination of employment, and shall
be binding upon Executive's assigns, executors, administrators
and other legal representatives.
H. The Executive acknowledges that the agreements provided in
this Section 6 were an inducement to the Company to enter into
this Agreement and that the remedy at law for breach of his
covenants under this Section 6 will be inadequate.
Accordingly, in the event of any breach or threatened breach
by the Executive of any provision of this Section 6, the
Company shall be entitled, in addition to all other remedies,
to an injunction restraining any breach by Executive.
7. Termination.
A. The Company shall have the right to terminate this Agreement
and the Executive's employment with the Company for cause. For
purposes of this Agreement, the term "cause" shall mean:
1. Any material breach of the Executive's obligations
under this Agreement.
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2. Fraud, theft, or gross misconduct on the part of the
Executive, including, without limitation, conduct of
a felonious or criminal nature, conduct involving
moral turpitude, embezzlement, or misappropriation of
assets.
3. Executive's exclusion from participation in, or
imposition of penalties from, any governmental
reimbursement program, including but not limited to
Medicare, Medicaid or CHAMPUS.
4. Alcohol or drug abuse that impairs the Executive's
ability to properly perform his duties.
5. In the event Executive engages in conduct which has a
material adverse affect on the business of the
Company or any of its subsidiaries, divisions, or
affiliates.
6. Violation by the Executive of any of the written work
rules or written policies of the Company, including
the Company's Corporate Compliance Policy.
7. Suspension, revocation, cancellation or limitation of
Executive's right to practice in any jurisdiction
whether because of loss of Executive's license or any
other reason.
8. Revocation, in whole or in part of Executive's
medical privileges as extended to him by the
appropriate authorities of any hospital at which the
Employer conducts its business.
B. The Company may terminate this Agreement without cause by
providing the Executive with ninety (90) days' prior written
notice, such termination to be effective on the date set forth
in the notice.
C. Executive may terminate his employment by providing ninety
(90) days' written notice to the Company that the Company has
materially breached this Agreement, such termination to be
effective on the date set forth in the notice if and only if
the Company fails to cure such breach to the reasonable
satisfaction of the Executive prior to the scheduled
termination date.
D. Executive may terminate his employment at any time by
providing ninety (90) days' prior written notice of
termination of this Agreement to the Company.
E. If the employment of the Executive is terminated for cause,
the Company shall have no obligation to make any further
payment to the Executive (other than accrued and unpaid base
salary and expenses to the date of termination), or continue
to provide any benefit (other than benefits which have accrued
pursuant to any plan or by law) to the Executive under this
Agreement.
F. Upon termination of Executive's employment by the Company
pursuant to paragraph 7.B, Executive shall be entitled to
receive (i) all cash compensation
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earned under this Agreement to the date of termination plus
(ii) base compensation in the amount payable on the date
immediately prior to termination for an additional period of
one (1) year following notice of termination plus (iii) a pro
rata portion (based upon the portion of the applicable year
Executive provided services under this Agreement) of the
performance bonus payable to Executive, if any, for the period
then in effect, plus (iv) for a period of one (1) year
following notice of termination, the Company shall continue to
pay for the cost of the Executive's participation in the
Company's group medical and dental insurance plans, provided
that the Executive is entitled to continue such participation
under applicable state and federal law and plan terms.
8. Miscellaneous.
A. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to
agreements made and performed in Texas, and shall be construed
without regard to any presumption or other rule requiring
construction against the party causing the Agreement to be
drafted.
B. This agreement contains a complete statement of all the
arrangements between the Company and the Executive with
respect to its subject matter, supersedes all previous
agreements, written or oral, among them relating to its
subject matter, and cannot be modified, amended, or terminated
orally. Amendments may be made to this Agreement at any time
if mutually agreed upon in writing.
C. Any amendment, notice, or other communication under this
Agreement shall be in writing and shall be considered given
when received and shall be delivered personally or mailed by
Certified Mail, Return Receipt Requested, to the parties at
their respective addresses set forth below (or at such other
address as a party may specify by notice to the other):
If to Company: 1717 Main Street, Suite 5200
Dallas, Texas 75201
Attention: Legal Department
If to Executive: Executive's last known address on
file with Company
D. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
E. Each of the parties irrevocably submits to the exclusive
jurisdiction of any court of the State of Texas sitting in
Dallas County over any action, suit, or proceeding relating to
or arising out of this Agreement and the transactions
contemplated hereby.
F. The invalidity or unenforceability of any term or provision of
this Agreement shall not affect the validity or enforceability
of the remaining terms or provisions
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of this Agreement which shall remain in full force and effect
and any such invalid or unenforceable term or provision shall
be given full effect as far as possible. If any term or
provision of this Agreement is invalid or unenforceable in one
jurisdiction, it shall not affect the validity or
enforceability of that term or provisions in any other
jurisdiction.
G. This Agreement is not assignable by either party except that
it shall inure to the benefit of and be binding upon any
successor to the Company by merger or consolidation or the
acquisition of all or substantially all of the Company's
assets, provided such successor assumes all of the obligations
of the Company, and shall inure to the benefit of the heirs
and legal representatives of the Executive.
H. The parties acknowledge that none of the benefits granted to
either party here under are conditioned on any requirement
that either party make referrals to, be in a position to make
or influence referrals to, or otherwise generate business for
the other.
IN WITNESS WHEREOF, Company and Executive have executed this Agreement,
in multiple counterparts, each of which shall be deemed an original, effective
the day and year first above written.
EMERGENCY MEDICAL SERVICES, L.P.
By: /s/ Don. S. Harvey
-------------------------------------
Title: President
Date of Execution: April 19, 2005
DIGHTON PACKARD, M.D.
By: /s/ Dighton Packard
------------------------------------
Title: CMO
Date of Execution: April 18, 2005
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ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption, dated as of April 19, 2005, between
Emergency Medical Services Corporation, a Delaware corporation ("EMSC") and
Emergency Medical Services L.P., a Delaware limited partnership ("EMS").
Reference is made to the Employment Agreement, dated as of April 19,
2005, between EMS and Dighton Packard, M.D. (the "EMPLOYMENT AGREEMENT").
EMS wishes to assign to EMSC, and EMSC wishes to accept and assume from
EMS, EMS's rights and obligations and Employment Agreement.
NOW THEREFORE, intending to be legally bound, the parties hereby agree
as follows:
EMS hereby assigns, transfers, grants and otherwise conveys to EMSC,
and EMSC hereby accepts and assumes from EMS, all of the rights and obligations
under the Employment Agreement.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed and delivered as of the date first written above.
EMERGENCY MEDICAL SERVICES CORPORATION
By: /s/ Randel G. Owen
----------------------------
Name: Randel G. Owen
Title: Chief Financial Officer
EMERGENCY MEDICAL SERVICES L.P.
By: Emergency Medical Services Corporation,
its general partner
By: /s/ Todd Zimmerman
----------------------------
Name: Todd Zimmerman
Title: Secretary and General Counsel
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