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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT | Document Parties: EMSC, Inc | Medical Holdings, Inc | Onex Investment Corporation You are currently viewing:
This Employment Agreement involves

EMSC, Inc | Medical Holdings, Inc | Onex Investment Corporation

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Title: EMPLOYMENT AGREEMENT
Governing Law: Delaware     Date: 8/2/2005

EMPLOYMENT AGREEMENT, Parties: emsc  inc , medical holdings  inc , onex investment corporation
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Exhibit 10.1

This Agreement made as of December 6, 2004

By and Between

EMSC, Inc., a Delaware corporation ("Purchaser")

and

William A. Sanger (the "Executive")

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WHEREAS, Purchaser desires to purchase all of the issued and

outstanding shares of common stock of (i) EmCare Holdings Inc., a Delaware

corporation and (ii) American Medical Response, Inc., a Delaware corporation

(the "Contemplated Transactions");

WHEREAS, concurrently with the execution and delivery of this

Agreement, Purchaser will execute that certain (i) Stock Purchase Agreement,

dated as of the date hereof, by and among Laidlaw International, Inc., Laidlaw

Medical Holdings, Inc. and Purchaser (the "AMR Purchase Agreement") and (ii)

Stock Purchase Agreement, dated as of the date hereof, by and among Laidlaw

International, Inc., Laidlaw Medical Holdings, Inc. and Purchaser (the "EmCare

Purchase Agreement" together with the AMR Purchase Agreement, the "Stock

Purchase Agreements");

WHEREAS, Purchaser desires that the Executive enter into employment

with Purchaser and the Executive desires to be employed by Purchaser.

NOW THEREFORE, the parties have agreed that the terms and conditions

of the relationship shall be as follows:

ARTICLE 1

DEFINITIONS

Whenever used in this Agreement, the following terms shall have the

meanings set forth below, and when the meaning is intended, the initial letter

of the word is capitalized:

(a) "Agreement" means this employment agreement, as amended from

time to time.

(b) "AMR" means American Medical Response, Inc., a Delaware

corporation and a wholly owned subsidiary of Purchaser.

(c) "Base Salary" means the salary of record paid to the Executive

as annual salary, and as further indicated in paragraph (a) of Article 4.

(d) "Board" means the Board of Directors of Purchaser.

(e) "Cause" means the Executive's:

(i) Willful and continued failure to perform substantially the

Executive's duties with Purchaser or a Subsidiary, which failure is not

cured within 30 days after Purchaser delivers to the Executive written

demand for substantial performance, specifically identifying the manner in

which the Executive has not substantially performed his duties;

(ii) Conviction of an indictable offense; or

(iii) Willfully engaging in illegal conduct or gross

misconduct which is materially and demonstrably injurious to Purchaser or

a Subsidiary.

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For purposes of this paragraph and Article 12, no act or omission by the

Executive shall be considered "willful" unless it is done or omitted in

bad faith or without reasonable belief that the Executive's action or

omission was in the best interests of Purchaser or a Subsidiary.

(f) "Committee" means the Compensation Committee of the Board or if

there is no Compensation Committee, the Board.

(g) "Effective Date" means the Closing Date (as defined in the Stock

Purchase Agreements).

(h) "EmCare" means EmCare Holdings Inc., a Delaware corporation, and

a wholly owned subsidiary of Purchaser.

(i) "Executive" means William A. Sanger.

(j) "15% Internal Rate of Return" means an Investor Return, in cash

or cash equivalent, at least equal to an amount determined by increasing

the amount of the initial investment, and all subsequent direct or

indirect investments by Onex, by the total compounded annual rate of

return of 15%, taking into account for these purposes the exercise of all

options to purchase Shares outstanding under the Plan or otherwise

(including, without limitation, options, other stock awards or interests

held by affiliates of Onex and their respective employees), which are then

exercisable or become exercisable as a result of the realization of the

15% Internal Rate of Return. Whether the 15% Internal Rate of Return has

been realized shall be determined by the Board whose decision shall be

final and binding on the Executive. For the avoidance of doubt, a 15%

Internal Rate of Return shall be deemed realized only if the Investor

Return includes both the amount of the investments and the required return

on the investments.

(k) "Investor Return" means the sum of all cash amounts actually

received by Onex, on a cumulative basis through the date of determination,

in the form of cash dividends, other distributions or sale proceeds in

connection with (a) a disposition of all or any part of its Shares

calculated based on the actual net proceeds received from the disposition

of such Shares, (b) a disposition of all or substantially all of the

assets of Purchaser or a Subsidiary or (c) a recapitalization of Purchaser

or any Subsidiary. Such calculation shall take into account any

transaction costs and fees and shall exclude any management, consulting or

other similar fees received by Onex or its affiliates.

(l) "IPO/Recap" means an initial public offering of the equity of

Purchaser (an "IPO") or a recapitalization of the Purchaser.

(m) "Liquidity Event" means (i) the sale of all, or substantially

all, of Purchaser's consolidated assets, including, without limitation, a

sale of all or substantially all of the assets of Purchaser or any of its

Subsidiaries whose assets constitute all or substantially all of

Purchaser's consolidated assets in any single transaction or series of

related transactions or (ii) any merger or consolidation of Purchaser with

or into another

2

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corporation unless, after giving effect to such merger or consolidation,

the holders of Purchaser's voting securities (on a fully-diluted basis)

immediately prior to the merger or consolidation, own voting securities

(on a fully-diluted basis) of the surviving or resulting corporation

representing a majority of the outstanding voting power to elect directors

of the surviving or resulting corporation in the same proportions that

they held their shares prior to such merger.

(n) "Onex" means Onex Partners LP.

(o) "Purchaser" means EMSC, Inc., a corporation incorporated under

the laws of Delaware, and except where the context requires otherwise,

including all affiliates and Subsidiaries of Purchaser, and any successor

thereto.

(p) "Shares" means shares of the common stock of Purchaser.

(q) "Subsidiary" means any corporation that is a subsidiary of

Purchaser, including but not limited to EmCare and AMR.

(r) "Change in ownership or control" means, during the Term, the

sale of all or substantially all of the assets of the Company.

ARTICLE 2

TERM OF THE AGREEMENT

This Agreement shall commence on the Effective Date and shall

continue for a period of five years unless earlier terminated in accordance with

Article 6 hereof.

ARTICLE 3

TITLE; COMMENCEMENT OF EMPLOYMENT; REPORTING

The Executive shall serve as the Chairman and Chief Executive

Officer of Purchaser, and, at Purchaser's request, as President and Chief

Executive Officer of a Subsidiary. The Executive's employment shall commence on

the Effective Date. The Executive shall report to the Board.

ARTICLE 4

COMPENSATION

(a) Unless otherwise provided, all dollar amounts set forth in this

Agreement shall be in United States Dollars. The Base Salary of the Executive

for his services shall be at the annualized rate of $850,000. The Base Salary

shall be payable twice monthly on the 15th business day and last business day of

each month. The Base Salary shall be reviewed annually beginning in the year

following the second anniversary of the Effective Date during Purchaser's normal

review period. The review will be undertaken by assessing the Executive's

achievement of the overall objectives established by the Committee in

consultation with the Executive and with regard to the market rates of

remuneration paid for similar duties and responsibilities.

3

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(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 100% of Base Salary

(prorated 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 fiscal year fixed by the

Board or the Committee during the first quarter of the year; 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

ending August 31, 2005 approved by the board of directors of Laidlaw

International, Inc.

(c) Purchaser will adopt a stock option plan (the "Plan") to be

effective as of the Effective Date. Pursuant to the Plan, Purchaser will grant

to the Executive, as of the Effective Date, options to purchase four percent

(4%) of the Shares outstanding on the Effective Date (the "Sanger Options"). The

Sanger Options will contain the following terms and will otherwise be subject to

the terms and provisions of the Plan:

(i) Exercise Price. The exercise price will be the per share

purchase price paid by the initial equity investors in Purchaser.

(ii) Vesting and Exercisability.

(I) 50% of the Sanger Options will become vested and

exercisable 12.5% on each of the first eight sixth-month anniversaries of

the Effective Date without further condition. In the event Sanger is

terminated as provided in this Agreement, the Sanger Options shall vest

and be exercisable as if Sanger had remained employed up to the nearest

six-month anniversary.

(II) 50% of the Sanger Options will become vested and

exercisable 12.5% on each of the first eight sixth-month anniversaries of

the Effective Date, provided, that exercisability is subject to the

further condition that Onex has realized a 15% Internal Rate of Return. In

the event Sanger is terminated as provided in this Agreement, the Sanger

Options shall vest and be exercisable as if Sanger had remained employed

up to the nearest sixth-month anniversary; provided, that exercisability

is subject to the further condition that Onex has realized a 15% Internal

Rate of Return.

(III) Notwithstanding the provisions of clause (II),

upon the occurrence of a Liquidity Event in which Onex realizes a 15%

Internal Rate of Return, all of the Sanger Options shall become fully

vested and exercisable on the occurrence of the Liquidity Event, and the

Sanger Options shall terminate and be of no further force or effect if

they are not exercised in connection with the Liquidity Event. For the

purposes of this clause (III) only, the 15% Internal Rate of Return shall

be determined based on (i) cash received by Onex at any time and/or (ii)

the fair market value of assets received by Onex at any time (as such fair

market value is determined by the Board). Any assets received by the

Executive in the Liquidity Event shall be subject to the same restrictions

(such as lock-up provisions) to which the assets received by Onex are

subject.

4

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(IV) On the fourth anniversary of the Effective Date, if

the Sanger Options referred to in clause (II) have not terminated pursuant

to clause (III) and have vested but are not exercisable because Onex has

not realized a 15% Internal Rate of Return, then such Sanger Options shall

also become exercisable if:

(a) Purchaser has met the Cumulative Cash Flow

Test, as such term will be defined in the Plan, or

(b) if (x) Purchaser's common stock is publicly

traded and listed on a national securities exchange and (y) Onex would

have realized a 15% Internal Rate of Return if it had sold its remaining

common stock interest in Purchaser at a per share price equal to the

weighted average sale price of the Purchaser common stock (as quoted by

such national securities exchange) for any 30 consecutive trading days.

(iii) Term. For the avoidance of doubt, Options that have

vested (by acceleration or otherwise) upon the occurrence of a Liquidity

Event but are not exercisable because Onex has not realized a 15% Internal

Rate of Return shall terminate on the occurrence of the Liquidity Event,

and be of no further force or effect. The occurrence of an IPO/Recap shall

not affect the vesting of the Sanger Options.

ARTICLE 5

BENEFITS

(a) AUTOMOBILE

Purchaser will, or will cause a Subsidiary to, (i) provide the

Executive with a monthly allowance of $1,200 for expenses incurred by the

Executive for the leasing of an automobile and (ii) reimburse the Executive for

expenses incurred by the Executive in connection with the related operating


 
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