EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into by and
between PEDIATRIX MEDICAL GROUP, INC., a Florida corporation (“Employer”), and
ROGER J. MEDEL, M.D. (“Employee”) effective as of the 20th day of August, 2008
(the “Effective Date”).

RECITALS

WHEREAS, Employer is presently engaged in “Employer’s Business” as defined on
Exhibit A hereto;

WHEREAS, Employee is a founder of Employer and currently serves as Chief
Executive Officer of Employer pursuant to an Employment Agreement effective as
of November 11, 2004 (the “Prior Employment Agreement”);

WHEREAS, Employer and Employee desire to replace the Prior Employment Agreement
with this Agreement effective as stated above and set forth herein the terms and
conditions of Employee’s employment with Employer following termination of the
Prior Employment Agreement; and

WHEREAS, in order to induce Employer to enter into this Agreement on the terms
and conditions set forth herein (including an increase in compensation over what
was provided under the Prior Employment Agreement), and disclose its trade
secrets and Confidential Information in connection with Employee’s employment by
Employer and provide incentive compensation from time to time, Employee hereby
agrees to be bound by the terms of this Agreement, including the arbitration,
non-competition and related restrictive covenants set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

1. Employment.

1.1. Employment and Term. Employer hereby agrees to employ Employee and Employee
hereby agrees to serve Employer on the terms and conditions set forth herein for
a “Term” that commences on the Effective Date and continues for a period of five
(5) years, unless sooner terminated in accordance with the provisions of
Section 4. In this Agreement, the term “Employment Period” shall refer to the
period of time beginning on the Effective Date and ending on the earlier of the
expiration of the Term or such earlier date as the employment of Employee is
terminated pursuant to the provisions of Section 4 of this Agreement. Employer
and Employee agree that the Prior Employment Agreement shall terminate and be of
no further force and effect as of the Effective Date.

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1.2. Duties of Employee. During the Employment Period, Employee shall serve as
Chief Executive Officer of Employer and perform such duties as are customary to
the position Employee holds or as may be reasonably assigned to Employee from
time to time by Employer’s Board of Directors (“Employee’s Supervisor”);
provided, that such duties as assigned shall be customary to Employee’s role as
an executive officer of Employer. Employee’s employment shall be full-time and
as such Employee agrees to devote substantially all of Employee’s attention and
professional time to the business and affairs of Employer. During the Employment
Period, Employer shall promote the proficiency of Employee by, among other
things, providing Employee with Confidential Information, specialized
professional development programs, and information regarding the organization,
administration and operation of Employer. During the Employment Period, Employee
agrees that Employee will not, without the prior written consent of Employer
(which consent shall not be unreasonably withheld), serve as a director on a
corporate board of directors or in any other similar capacity for any
institution other than Employer. Employee may continue to serve as a director on
any corporate board of directors on which he serves as of the Effective Date,
and he may continue to serve in any other similar capacity in which he serves as
of the Effective Date for any institution. During the Employment Period, it
shall not be a violation of this Agreement to (i) serve on other civic or
charitable boards or committees, or (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, so long as such activities do
not interfere with the performance of Employee’s responsibilities as an employee
of Employer in accordance with this Agreement, including the restrictions of
Section 8 hereof.

1.3. Place of Performance. Employee shall be based at Employer’s offices located
in Sunrise, Florida, except for required travel relating to Employer’s Business.

2. Base Salary and Performance Bonus.

2.1. Base Salary. Employee shall be paid an annual base salary of Nine Hundred
Fifty Thousand Dollars ($950,000.00) (the “Base Salary”) beginning June 1, 2008
and continuing during the Employment Period, payable in installments consistent
with Employer’s customary payroll schedule and subject to applicable withholding
for taxes and Employee directed withholdings. The Compensation Committee of the
Board of Directors of Employer (the “Compensation Committee”) shall review the
amount of Employee’s Base Salary on an annual basis no later than ninety
(90) days after the beginning of Employer’s fiscal year. Any change to
Employee’s Base Salary that is approved by the Compensation Committee shall
become the Base Salary for purposes of this Agreement.

2.2. Performance Bonus. During the Employment Period, Employee shall be eligible
for an annual bonus (the “Performance Bonus”) in accordance with incentive
programs approved from time to time by the Compensation Committee, which
programs shall contemplate a target bonus payment of at least One Hundred Fifty
Percent (150%) of Employee’s Base Salary upon the fulfillment of reasonable
performance objectives set by the Compensation Committee. Each Performance Bonus
shall be paid in the calendar year immediately following the calendar year in
which it is earned as soon as practicable after the audited financial statements
for Employer for the year for which the bonus is earned have been released;
provided, however, that if calculation of Employee’s Performance Bonus within
such time is not administratively practicable due to events beyond the control
of Employer, then Employer may delay payment of the Performance Bonus provided
that the payment is made during the first taxable year of Employee in which the
calculation of the amount of the payment is administratively practicable.

 

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3. Benefits.

3.1. Expense Reimbursement. Employer shall promptly reimburse Employee for all
out-of-pocket expenses reasonably incurred by Employee during the Employment
Period on behalf of or in connection with Employer’s Business pursuant to the
reimbursement standards and guidelines of Employer in effect from time to time.
Employee shall account for such expenses and submit reasonable supporting
documentation to Employer in accordance with Employer’s policies in effect from
time to time.

3.2. Employee Benefits. During the Employment Period, Employee shall be entitled
to participate in such health, welfare, disability, stock purchase, retirement
savings and other fringe benefit plans and programs as may be established and
maintained by Employer from time to time to the extent that such plans and
programs are applicable to other similarly situated employees of Employer and
subject to the provisions of such plans and programs.

3.3. Leave Time. During the Employment Period, Employer shall allow Employee
thirty eight (38) days of paid time off each year for vacation, illness, injury,
personal days or other similar purposes in accordance with Employer’s policies
in effect from time to time (prorated for periods of less than a calendar year).
Any paid time off not used during each calendar year may be carried over into
the next year to the extent permitted by Employer’s policies in effect from time
to time.

3.4. Incentive Compensation Plan. During the Employment Period, Employee shall
be eligible to participate in Employer’s incentive compensation plans that
provide for the issuance of stock options, restricted stock and other awards to
its employees. Employee’s stock-based award each year shall be determined by the
Compensation Committee based on Employee’s performance and Employer’s
performance during the immediately preceding year and shall be consistent with
the Compensation Committee’s determination of Employee’s stock-based award in
prior years. The terms of any award to Employee and Employee’s rights and
interest in any such award shall be controlled by this Agreement, the award
agreement and the appropriate incentive compensation plan. Employee acknowledges
that this Section 3 is sufficient consideration for Employee to enter into this
agreement, including the restrictive covenants set forth in Section 8 below.

3.5. Personal Use of Corporate Aircraft. Corporate aircraft, whether owned by
the Company outright, jointly with another person or entity, or by fractional
interest, may be used by Employee during the Employment Period for personal
matters; provided, however, (i) the aircraft is not being used, nor during the
period Employee has requested use for personal matters will it be needed for
use, by Employer for business-related matters, as Employer shall have priority
over Employee’s personal use; and (ii) Employee’s personal use of the aircraft
does not exceed a total of seventy-five (75) hours of flight in any calendar
year without the advance approval of the Compensation Committee. Such personal
use of the aircraft by Employee shall be treated as imputed income to Employee
in accordance with rules and regulations of the Internal Revenue Code of 1986,
as amended.

 

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3.6 Legal Fees. Employer shall reimburse Employee for the reasonable legal fees
and expenses incurred by Employee in connection with the review and negotiation
of this Agreement and the related Restricted Shares Units Agreements. Employer
shall also reimburse Employee for all reasonable legal fees and expenses that
Employee may incur during the Term or within ten years after the expiration
thereof in connection with any dispute between Employee and the Employer
involving this Agreement, Employee’s employment with the Employer or the
termination thereof, to the greatest extent permitted by law. All reimbursements
described in this paragraph shall be made promptly after demand is made by
Employee and Employee’s provision to the Employer of reasonably satisfactory
evidence of such fees and expenses, but no later than the last day of the
calendar year following the calendar year in which Employee incurs such fees and
expenses.

4. Termination.

4.1. Termination for Cause. Employer may terminate Employee’s employment under
this Agreement for Cause. As used in this Agreement, the term “Cause” shall mean
the occurrence of any of (i) Employee’s engagement in (A) willful misconduct
resulting in material harm to Employer, or (B) gross negligence; (ii) Employee’s
conviction of, or pleading nolo contendere to, a felony or any other crime
involving fraud, financial misconduct, or misappropriation of Employer’s assets;
(iii) Employee’s willful and continual failure, after written notice from
Employee’s Supervisor, to (A) perform substantially his employment duties
consistent with his position and authority, or (B) follow, consistent with
Employee’s position, duties, and authorities, the reasonable lawful mandates of
Employee’s Supervisor; or (iv) Employee’s breach of Section 8.4 of this
Agreement. No act or omission shall be deemed willful or grossly negligent for
purposes of this definition if taken or omitted to be taken by Employee in a
good faith belief that such act or omission to act was in the best interests of
the Employer or if done at the express direction of the Employer’s Board. The
termination date for a termination of Employee’s employment under this Agreement
pursuant to this Section 4.1 shall be the date specified by Employer in a
written notice to Employee of finding of Cause, which may not be retroactive.
Upon termination of Employee’s employment under this Agreement pursuant to
Section 4.1, Employee shall be entitled to compensation in accordance with and
subject to, the provisions of Section 5.1 hereof.

4.2. Disability. Employer may terminate Employee’s employment under this
Agreement upon the Disability (as defined below) of Employee. Subject to the
requirements of applicable law, Employee shall be deemed to have a “Disability”
for purposes of this Agreement in the event of (i) Employee’s inability to
perform Employee’s duties hereunder, with or without a reasonable accommodation,
as a result of physical or mental illness or injury, and (ii) a determination by
an independent qualified physician selected by Employer and acceptable to
Employee (which acceptance shall not be unreasonably withheld) that Employee is
currently unable to perform such duties and in all reasonable likelihood such
inability will continue for a period in excess of an additional ninety (90) or
more days in any one hundred twenty (120) day period. The termination date for a
termination of Employee’s employment under this Agreement pursuant to this
Section 4.2 shall be the date specified by Employer in a notice to Employee,
which date shall not be retroactive. Upon any termination of Employee’s
employment under this Agreement pursuant to this Section 4.2, Employee shall be
entitled to compensation and/or benefits in accordance with, and subject to, the
provisions of Section 5.2 hereof.

 

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4.3. Death. Employee’s employment under this Agreement shall terminate
automatically upon the death of Employee, without any requirement of notice by
Employer to Employee’s estate. The date of Employee’s death shall be the
termination date of Employee’s employment under this Agreement pursuant to this
Section 4.3. Upon any termination of Employee’s employment under this Agreement
pursuant to this Section 4.3, Employee shall be entitled to the compensation
specified in Section 5.3 hereof.

4.4. Termination by Employer Without Cause. Employer may terminate Employee’s
employment without Cause by giving Employee written notice of such termination.
The termination date shall be the date specified by Employer in such notice,
which shall not be less than ninety (90) days from the date of written notice to
Employee. Upon any termination of Employee’s employment under this Agreement
pursuant to this Section 4.4, Employee shall be entitled to compensation and/or
benefits in accordance with, and subject to, the provisions of Section 5.4
hereof.

4.5. Termination by Employee Due to Poor Health. Employee may terminate
Employee’s employment under this Agreement upon written notice to Employer if
Employee’s health should become impaired to any extent that makes the continued
performance of Employee’s duties under this Agreement hazardous to Employee’s
physical or mental health or Employee’s life (regardless of whether such
condition would be deemed a Disability under any other Section of this
Agreement), provided that Employee shall have furnished Employer with a written
statement from a qualified doctor to that effect, and provided further that, at
Employer’s written request and expense, Employee shall submit to a medical
examination by an independent qualified physician selected by Employer and
acceptable to Employee (which acceptance shall not be unreasonably withheld),
which doctor shall substantially concur with the conclusions of Employee’s
doctor. The termination date shall be ninety (90) days from Employer’s receipt
of such notice. Upon any termination of Employee’s employment under this
Agreement pursuant to this Section 4.5, Employee shall be entitled to
compensation and/or benefits in accordance with, and subject to, the provisions
of Section 5.5 hereof.

4.6. Termination by Employee. Employee may terminate Employee’s employment under
this Agreement for any reason whatsoever upon not less than ninety (90) days
prior written notice to Employer. Upon receipt of such notice from Employee,
Employer may, at its option, require Employee to terminate employment at any
time in advance of the expiration of such ninety (90) day period. The
termination date under this Section 4.6 shall be the date specified by Employer,
but in no event more than ninety (90) days after Employer’s receipt of notice
from Employee as contemplated by this Section 4.6. Upon any termination of
Employee’s employment under this Agreement pursuant to this Section 4.6,
Employee shall be entitled to compensation and/or benefits in accordance with,
and subject to, the provisions of Section 5.6 hereof.

4.7. Termination by Employee for Good Reason. Employee may terminate Employee’s
employment under this Agreement for Good Reason. For purposes of this Section,
“Good Reason” shall mean the occurrence of any of the following:

(a) a material diminution in the Employee’s Base Salary or Performance Bonus
eligibility;

 

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(b) a material diminution in the Employee’s authority, duties, or
responsibilities;

(c) a material diminution in the authority, duties or responsibilities of the
supervisor to whom the Employee is required to report, including a requirement
that the Employee report to a corporate officer or employee instead of reporting
directly to the Board of Directors of the Employer

(d) a material diminution in the budget over which the Employee retains
authority;

(e) a material change in the geographic location at which the Employee must
perform the services under this Agreement; or

(f) any other action or inaction that constitutes a material breach by the
Employer under this Agreement.

For purposes hereof, “Good Reason” shall not be deemed to exist unless the
Employee provides the Employer with written notice of the existence of such
condition within ninety (90) days after the initial existence of the condition
and the Employer fails to remedy the condition within 30 days after its receipt
of such notice.

Notice of the condition shall include the proposed termination date of
Employee’s employment under this Agreement, which must be ninety (90) days from
the date of the notice. If Employer fails to remedy the condition, Employer may,
at its option, require Employee to terminate employment at any time in advance
of the expiration of such ninety (90) day period. The termination date under
this Section 4.7 shall be the date specified by Employer, but in no event more
than ninety (90) days after Employer’s receipt of notice from Employee as
contemplated by this Section 4.7. If Employee terminates Employee’s employment
under this Agreement pursuant to this Section 4.7, then Employee shall be
entitled to compensation and/or benefits in accordance with, and subject to, the
provisions of Section 5.7 hereof.

4.8 Termination by Employee due to Change in Control of Employer. Employee may
terminate Employee’s employment under this Agreement due to a Change in Control,
of Employer. For purposes of this Section, a “Change in Control of Employer”
shall mean (i) the acquisition by a person or an entity or a group of persons
and entities, directly or indirectly, of more than fifty (50%) percent of
Employer’s common stock in a single transaction or a series of transactions
(hereinafter referred to as a “50% Change in Control”); (ii) a merger or other
form of corporate reorganization resulting in an actual or de facto 50% Change
in Control; or (iii) the failure of Applicable Directors (defined below) to
constitute a majority of Employer’s Board of Directors (the “Board”) during any
two (2) consecutive year period after the Effective Date (the “Two-Year
Period”). “Applicable Directors” shall mean those individuals who are members of
the Board at the inception of the Two-Year Period and any new director whose
election to the Board or nomination for election to the Board was approved
(prior to any vote thereon by the shareholders) by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the Two-Year Period at issue or whose election or nomination for
election during such Two-Year Period was previously approved as provided in this
sentence.

 

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If Employee desires to terminate Employee’s employment under this Agreement
pursuant to this Section 4.8, Employee must, within one year after the Change in
Control of Employer provide Employer with a written notice of the termination.
Such notice shall include the proposed termination date of Employee’s employment
under this Agreement, which must be ninety (90) days from the date of the
notice. Upon receipt of such notice from Employee, Employer may, at its option,
require Employee to terminate employment at any time in advance of the
expiration of such ninety (90) day period. The termination date under this
Section 4.8 shall be the date specified by Employer, but in no event more than
ninety (90) days after Employer’s receipt of notice from Employee as
contemplated by this Section 4.8. If (i) Employee terminates Employee’s
employment under this Agreement pursuant to this Section 4.8, or (ii) Employer
terminates Employee’s employment under this Agreement for any reason within
twenty-four (24) months after a Change in Control of Employer, then Employee
shall be entitled to compensation and/or benefits in accordance with, and
subject to, the provisions of Section 5.8.

5. Compensation and Benefits Upon Termination.

5.1. Cause. If Employee’s employment is terminated for Cause, Employer shall pay
Employee’s Base Salary through the termination date specified in Section 4.1 at
the rate in effect at the termination date. Upon payment of such amount, plus
any amounts as may be due under Section 5.10 below, Employer shall have no
further obligation to Employee under this Agreement, other than any benefits to
which Employee is entitled under Section 5.13 below.

5.2. Disability. In the event of Employee’s Disability, Employer shall continue
to pay Employee’s monthly Base Salary for a period of twelve (12) months after
the termination date. The twelve (12) month period after the termination date
during which Employee may continue to receive Base Salary payments pursuant to
this Section 5.2 shall be referred to as the “Severance Period” for purposes of
this Agreement. Amounts payable under this Section 5.2 are not intended to be in
lieu of benefits under any long-term disability plan Employer may maintain from
time to time, and Employee’s entitlement to benefits under such plan , if any,
shall be determined solely by the plan’s terms.

5.3. Death. Upon Employee’s death during the Employment Period, Employer shall
pay to the person or entity designated by Employee in a notice filed with
Employer or, if no person is designated, to Employee’s estate any unpaid amounts
of Base Salary to the date of Employee’s death, plus any amounts as may be due
under Sections 5.10 and 5.11 below. Any payments Employee’s spouse,
beneficiaries or estate may be entitled to receive pursuant to any pension plan,
employee welfare benefit plan, life insurance policy, or similar plan or policy
then maintained by Employer shall be determined and paid in accordance with the
written instruments governing the respective plans and policies. In the event of
Employee’s death during the Employment Period, Employer shall notify Employee’s
designee or estate of the stock awards held by Employee and the procedures
pursuant to which all vested stock options may be exercised and other stock
awards may be realized under the terms applicable to such awards.

5.4. Termination by Employer Without Cause. If Employer terminates Employee’s
employment in accordance with Section 4.4, then Employer shall pay Employee’s
Base Salary through the termination date specified in Section 4.4 at the rate in
effect at such termination date, plus any amount due under Section 5.10 and 5.11
hereof.

 

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5.5. Termination by Employee Due to Poor Health. If Employee terminates
employment under this Agreement pursuant to Section 4.5 hereof, Employer shall
pay to Employee any unpaid amounts of Base Salary to the termination date
specified in Section 4.5, plus any disability payments otherwise payable by or
pursuant to plans provided by Employer, plus any amounts as may be due under
Section 5.10 and 5.11 hereof.

5.6. Termination by Employee. If Employee’s employment under this Agreement
terminates pursuant to Section 4.6 hereof, Employer shall pay to Employee any
unpaid amounts of Base Salary to the termination date specified in Section 4.6,
plus any amounts as may be due under Section 5.10 and 5.11 below. In the event
that the termination date specified by Employer is less than ninety (90) days
after the date of Employer’s receipt of notice as contemplated by Section 4.6,
then Employer shall continue Employee’s Base Salary for a period of days equal
to ninety (90) minus the number of days from Employee’s notice to the
termination date.

In addition, if Employee gives Employer sufficient notice in accordance with
Section 4.6 and executes, and does not revoke, a general release of claims
pursuant to Section 5.18 of this Agreement, Employer shall pay Employee a bonus
calculated in accordance with Section 5.11 hereof.

5.7. Termination by Employee for Good Reason. If Employee’s employment under
this Agreement is terminated in accordance with Section 4.7, then (i) Employer
shall pay Employee’s Base Salary through the termination date specified pursuant
to Section 4.7 at the rate in effect at such termination date, plus any amounts
as may be due under Section 5.10 and 5.11 hereof.

5.8. Termination by Employee due to Change in Control of Employer. If Employee’s
employment under this Agreement is terminated in accordance with Section 4.8,
then Employer shall pay Employee’s Base Salary through the termination date
specified pursuant to Section 4.7 at the rate in effect at such termination
date, plus any amounts as may be due under Section 5.10 and 5.11 hereof.

5.9. Payments in the Event of a Change in Control of Employer. In the event it
shall be determined that any payment, distribution or other action by Employer
to or for the benefit of Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, including
any additional payments required under Section 5.7) (a “Payment”) would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), or any interest or penalties are incurred by
Employee with respect to any such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), Employer shall make a payment to Employee (a “Gross-Up Payment”)
in an amount such that after payment by Employee of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, Employee retains (or has had paid
to the Internal Revenue Service on his behalf) an amount of the Gross-Up Payment
equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the
product of any deductions disallowed because of the inclusion of the Gross-Up
Payment in Employee’s adjusted gross income and the highest applicable marginal
rate of federal income taxation for the calendar year in which the Gross-Up

 

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Payment is to be made. For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to (i) pay federal income taxes at the highest
marginal rates of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made, and (ii) pay applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-Up Payment is to be made, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

(a) Subject to the provisions of paragraph (b) of this Section, all
determinations required to be made under this Section 5.9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by a “Big Four” accounting firm (the “Accounting Firm”) selected by the Chief
Executive Officer; provided, that if the Gross-Up Payment relates to the
termination of the Chief Executive Officer’s employment with Employer, then the
Accounting Firm shall be selected by the Chief Financial Officer; and provided,
further that the Accounting Firm shall not also be Employer’s independent
auditor. The Accounting Firm shall provide detailed supporting calculations both
to Employer and Employee within thirty (30) business days of the receipt of
notice from Employee that there has been a Payment, or such earlier time as is
requested by Employer. All fees and expenses of the Accounting Firm shall be
borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this
Section 5.9, shall be paid by Employer to Employee within five (5) days of the
receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by Employee, it shall furnish Employee
with a written opinion that failure to report the Excise Tax on Employee’s
applicable federal income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the Accounting Firm shall be
binding upon Employer and Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments that may
not have been made by Employer should have been made (“Underpayment”) consistent
with the calculations required to be made hereunder. In the event that Employer
exhausts its remedies pursuant to Section 5.9 and Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Employee.

(b) Employee shall notify Employer in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by Employer of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than thirty (30) business days after Employee is informed in
writing of such claim and shall apprise Employer of the nature of such claim and
the date on which such claim is requested to be paid. Employee shall not pay
such claim prior to the expiration of the thirty (30) day period following the
date on which it gives such notice to Employer (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If
Employer notifies Employee in writing prior to the expiration of such period
that it desires in good faith to contest such claim, Employee shall:

(i) give Employer any information reasonably requested by Employer relating to
such claim;

 

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(ii) take such action in connection with contesting such claim as Employer shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by Employer;

(iii) cooperate with Employer in good faith in order effectively to contest such
claim; and

(iv) permit Employer to participate in any proceedings relating to such claim;

provided, however, that Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such contest and payment
of costs and expenses. Without limitation on the foregoing provisions of this
Section 5.9(b), Employer shall control all proceedings taken in connection with
such contest and, after making a determination in good faith, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct Employee to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and Employee agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
Employer shall reasonably determine; provided, however, that if Employer directs
Employee to pay such claim and sue for a refund, Employer shall advance the
amount of such payment to Employee, on an interest-free basis and shall
indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax
or income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with respect
to such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Employee with
respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, Employer’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Employee shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing
authority.

(c) If, after the receipt by Employee of an amount advanced by Employer pursuant
to Section 5.9(b), Employee becomes entitled to receive any refund with respect
to such claim, Employee shall (subject to Employer’s complying with the
requirements of Section 5.9(b)) promptly pay to Employer the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Employee of an amount advanced by
Employer pursuant to Section 5.9(b), a determination is made that Employee shall
not be entitled to any refund with respect to

 

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such claim and Employer does not notify Employee in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

5.10. Expense Reimbursement. Employee shall be entitled to reimbursement for
reasonable business expenses incurred prior to the termination date, subject,
however to the provisions of Section 3.1. Such reimbursement shall be made at
the times and in accordance with Employer’s normal procedures for
reimbursements.

5.11. Performance Bonus. In the situations described in Sections 5.2, 5.3, 5.4,
5.5, 5.6, 5.7 and 5.8, upon termination of Employee’s employment under this
Agreement, Employee shall be paid a bonus with respect to Employer’s fiscal year
in which the termination date occurs, equal to the Performance Bonus, if any,
that would have been payable to Employee for the fiscal year if Employee’s
employment had not been terminated, multiplied by the number of days in the
fiscal year prior to and including the date of termination and divided by three
hundred sixty-five (365). Any amount payable under this Section 5.11 shall be
paid to Employee when Employer pays performance bonuses to its eligible
employees, which shall be in the calendar year following the termination date of
this Agreement.

5.12. Employment Transition and Severance Agreement. If Employer so requests
within five business days following a termination of Employee’s employment under
this Agreement pursuant to Section 4.2, 4.4, 4.5, or 4.7, Employee shall
continue to be employed by Employer on a part time basis for a period (the
“Transition Period”) to be determined by Employer that shall not exceed ninety
(90) days, unless extended by mutual agreement. During the Transition Period,
Employee shall perform (to the extent reasonably capable in the case of a
termination pursuant to Section 4.2 or Section 4.5) such services as may
reasonably be required for the transition to others of matters previously within
Employee’s responsibilities. Unless otherwise mutually agreed, Employee will not
be required to serve more than five (5) days per month during the Transition
Period. For services during the Transition Period, Employee shall be compensated
at a daily rate equal to his Base Salary immediately preceding the termination
of this Agreement divided by 365.

5.13 Continuation of Group Health Coverage.

(a) Extended Coverage in the Event of Reduction of Employee’s Hours of
Employment. In the event that a reduction of hours of Employee’s employment
would otherwise cause a loss of group health coverage as an employee and such
loss would entitle Employee and his eligible dependents to elect health care
continuation coverage under Section 601 et seq. of the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1161, et seq (“COBRA”), Employee and
his eligible dependents will be entitled to the following. Except as provided in
Section 5.13(d), or 5.13(e) below, Employee and his eligible dependents will be
entitled to elect (for the duration of Employee’s employment by Employer) to
continue to participate in any self-insured group health plan sponsored by
Employer for its employees on the same basis as regular, full-time employees of
Employer and their eligible dependents. As a condition of eligibility to elect
extended coverage of

 

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health care benefits under this Section 5.13(a), Employee and his eligible
dependents must first irrevocably decline any continuation coverage provided
pursuant to COBRA. Employee and each of his eligible dependents shall have an
independent opportunity to decline COBRA coverage in favor of extended coverage
under this Section 5.12(a), and the election or nonelection by Employee and/or
any of his eligible dependents shall not effect the eligibility of the others to
elect coverage under this Section 5.13(a).

(b) Severance and Transition Periods. Except as provided in Section 5.13(d) or
5.13(e) below, Employee and his eligible dependents will be entitled, during any
Severance Period or Transition Period, to continue to participate in any
self-insured, group health plan sponsored by Employer for its employees on the
same basis as regular, full-time employees of Employer and their eligible
dependents.

(c) Alternate Extended Coverage. Except as provided in Section 5.13(d) or
5.13(e) below, upon Employee’s termination of employment for any reason,
Employee (if living) and his eligible dependents will be entitled to elect (for
a period of five (5) years following the later of the Employee’s termination
date, the end of the Severance Period, or the end of the Transition Period) to
continue to participate in any self-insured group health plan sponsored by
Employer for its employees on the same basis as regular, full-time employees of
Employer and their eligible dependents. As a condition of eligibility to elect
the alternate extended coverage of health care benefits under this
Section 5.13(c), Employee and his eligible dependents must first irrevocably
decline any continuation coverage provided pursuant to COBRA. Employee and each
of his eligible dependents shall have an independent opportunity to decline
COBRA coverage in favor of the alternate extended coverage under this
Section 5.13(c), and the election or nonelection by Employee and/or any of his
eligible dependents shall not affect the eligibility of the others to elect
coverage under this Section 5.13(c).

(d) Payment for Coverage. Employee will pay the full cost of any continued group
health coverage provided under Section 5.13(a), 5.13(b), or 5.13(c), which is
understood to be equal to the “applicable premium” as determined under
Section 604 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §
1164.

(e) Employer Option to Provide Insurance. In its sole discretion, Employer may
provide health care insurance to Employee and his eligible dependents through an
insurance carrier(s) selected by Employer in lieu of providing the coverage
described in Section 5.13(a), 5.13(b), or 5.13(c) above, provided the coverage
afforded by such insurance is substantially comparable to coverage under
Section 5.13(a), 5.13(b), and 5.13(c) above. Employee shall pay the cost of such
insurance up to the amount that would have been paid by Employee under
Section 5.13(d) above. Employer shall pay the excess cost, if any.

(f) Indemnification for Income Tax. Employer and Employee do not contemplate
that the provision of benefits under this Section 5.13 will occasion any imputed
income to Employee under Section 105(h) of the Internal Revenue Code of 1986, 26
U.S.C. § 105(h), for purposes of income taxes but, if it does, Employer agrees
to indemnify Employee from and against any income taxes imposed under
Section 105(h) as a consequence of such imputed income.

 

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5.14. Vesting of Incentive Awards. Notwithstanding any contrary provision in
this Agreement or any Stock Option or Incentive Compensation Plan then
maintained by Employer, (i) all stock options, stock appreciation rights,
restricted stock, and other stock-based awards granted to Employee by Employer
prior to termination of this Agreement shall continue to vest until fully vested
following a termination of Employee’s employment pursuant to Section 4.2, 4.3,
4.4, 4.5, and 4.7 and (ii) in the event of a Change in Control of Employer, all
unvested stock options, stock appreciation rights, restricted stock, and other
stock-based awards granted to Employee by Employer shall automatically vest and,
in the cases of stock options and stock appreciation rights, become immediately
exercisable. This Section 5.14 shall not apply to the Restricted Share Units
Agreements entered into between Employee and Employer on August 20, 2008.

5.15. Period for Exercising Stock Options After Termination. Except as to
incentive stock options granted in accordance with Section 422 of the Internal
Revenue Code, Employee shall be allowed a period of the greater of
(i) twenty-four (24) months after termination of Employee’s employment under
this Agreement or (ii) twelve months from the applicable vesting date during
which to exercise any vested options to purchase Employer’s common stock or
vested stock appreciation rights and realize any other vested incentive
compensation awards that may be granted or made under any of Employer’s Stock
Option Plans or Incentive Compensation Plans and/or any other similar plan
adopted by Employer that provides for the issuance of stock options, restricted
stock and other awards to its employees; provided, however, that in no event
shall the period during which Employee may exercise any vested stock option or
vested stock appreciation right be extended pursuant to this Section 5.15 to a
date that is later than the earlier of (i) the latest date upon which the stock
right could have expired by its original terms under any circumstances or
(ii) the tenth anniversary of the original date of grant of the stock right. In
all other respects, the terms of the applicable equity compensation plan shall
control the terms and conditions of any awards made pursuant thereto.

5.16. Assistant and Office. Upon Employee’s termination of employment for any
reason, Employer will reimburse Employee for lease payments incurred by Employee
in leasing an office in such location as Employee and Employer shall mutually
agree, and for reasonable wages paid by Employee to an administrative assistant,
in each case on a continuing basis reasonably comparable to that provided to
Employee currently, until the date that is two (2) years from the date of
termination.

5.17. Compliance with Section 409A.

(a) General. It is the intention of both Employer and Employee that the benefits
and rights to which Employee could be entitled in connection with termination of
employment comply with Section 409A of the Code and the Treasury Regulations and
other guidance promulgated or issued thereunder (“Section 409A”), and the
provisions of this Agreement shall be construed in a manner consistent with that
intention. If Employee or Employer believes, at any time, that any such benefit
or right does not so comply, it shall promptly advise the other and shall
negotiate reasonably and in good faith to amend the terms of such benefits and
rights such that they comply with Section 409A of the Code (with the most
limited possible economic effect on Employee and on Employer).

 

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(b) Distributions on Account of Separation from Service. If and to the extent
required to comply with Section 409A, no payment or benefit required to be paid
under this Agreement on account of termination of Employee’s employment shall be
made unless and until Employee incurs a “separation from service”, within the
meaning of Section 409A.

(c) 6 Month Delay for Specified Employees.

(i) If Employee is a “specified employee”, then no payment or benefit that is
payable on account of Employee’s “separation from service”, as that term is
defined for purposes of Section 409A, shall be made before the date that is six
months after Employee’s “separation from service” (or, if earlier, the date of
Employee’s death) if and to the extent that such payment or benefit constitutes
deferred compensation (or may be nonqualified deferred compensation) under
Section 409A and such deferral is required to comply with the requirements of
Section 409A. Any payment or benefit delayed by reason of the prior sentence
shall be paid out or provided in a single lump sum at the end of such required
delay period in order to catch up to the original payment schedule.

(ii) For purposes of this provision, Employee shall be considered to be a
“specified employee” if, at the time of his or her separation from service,
Employee is a “key employee”, within the meaning of Section 416(i) of the Code,
of Employer (or any person or entity with whom Employer would be considered a
single employer under Section 414(b) or Section 414(c) of the Code) any stock in
which is publicly traded on an established securities market or otherwise.

(iii) Unless otherwise required to comply with Section 409A, a payment or
benefit shall not be deferred pursuant to this provision if:

(x) it is not made on account of Employee’s “separation from service”,

(y) it is required to be paid no later than within 2  1/2 months after the end
of the taxable year of Employee in which the payment or benefit is no longer
subject to a “substantial risk of forfeiture”, as that term is defined for
purposes of Section 409A, or

(z) the payment satisfies the following requirements: (A) it is being paid or
provided due to Employer’s termination of Employee’s employment without Cause or
Employee’s termination of employment for Good Reason, (B) it does not exceed two
times the lesser of (1) Employee’s annualized compensation from Employer for the
calendar year prior to the calendar year in which the termination of Employee’s
employment occurs, and (2) the maximum amount of compensation that may be taken
into account under a qualified plan pursuant to Section 401(a)(17) of the Code
for the year in which Employee’s employment terminates, and (C) the payment is
required under this Agreement to be paid no later than the last day of the
second calendar year following the calendar year in which Employee incurs a
“separation from service”.

 

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(d) No Acceleration of Payments. Neither Employer nor Employee, individually or
in combination, may accelerate any payment or benefit that is subject to
Section 409A, except in compliance with Section 409A and the provisions of this
Agreement, and no amount shall be paid prior to the earliest date on which it
may be paid without violating Section 409A.

(e) Treatment of Each Installment as a Separate Payment. For purposes of
applying the provisions of Section 409A to this Agreement, each separately
identified amount to which Employee is entitled under this Agreement shall be
treated as a separate payment. In addition, to the extent permissible under
Section 409A, any series of installment payments under this Agreement shall be
treated as a right to a series of separate payments.

(f) Reimbursements and In-Kind Benefits.

(i) Any reimbursements by Employer to Employee of any eligible expenses pursuant
to Section 3.1 or 5.10 of this Agreement, that are not excludible from
Employee’s income for Federal income tax purposes (“Taxable Reimbursements”)
shall be made on or before the last day of the taxable year of Employee
following the year in which the expense was incurred.

(ii) The amount of any Taxable Reimbursements, and the value of any in-kind
benefits to be provided to Employee under this Agreement, during any taxable
year of Employee shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year of Employee.

(iii) The right to Taxable Reimbursements, or in-kind benefits, shall not be
subject to liquidation or exchange for another benefit.

(g) Tax Gross-Ups. Payment of any Gross-Up Payment under Section 5.9 hereof must
be made by the end of the taxable year of Employee following the taxable year of
Employee in which Employee remits the related taxes.

5.18. Release. Any payments due Employee under this Article 5 (other than
accrued but unpaid Base Salary and employee benefits as of the end of the
Employment Period) shall be conditioned upon Employee’s signing, and not
revoking, a general release of claims in the form attached as Exhibit B (subject
to such modifications as Employer reasonably may request). Employer shall
provide the required general release to Employee, and Employee shall have
twenty-one (21) days after receiving it to consider whether to sign the general
release and, if he elects to sign the general release, Employee shall have seven
(7) days within which to revoke the general release by providing a written
notice of his revocation to Employer. Employee is hereby advised to consult with
an attorney before signing the general release.

 

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6. Successors; Binding Agreement.

6.1. Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) acquiring a majority
of Employer’s voting common stock or any other successor to all or substantially
all of the business and/or assets of Employer to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Employer
would be required to perform it if no such succession had taken place and
Employee hereby consents to any such assignment. In such event, “Employer” shall
mean Employer as previously defined and any successor to its business and/or
assets which executes and delivers the agreement provided for in this Section 6
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law. This Section shall not limit Employee’s ability
to terminate his employment under this Agreement in the circumstances described
in Section 4.8 in the event of a Change in Control of Employer.

6.2. Benefit. This Agreement and all rights of Employee under this Agreement
shall inure to the benefit of and be enforceable by Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die after the termination date and
amounts would have been payable to Employee under this Agreement if Employee had
continued to live, including under Section 5 hereof, then such amounts shall be
paid to Employee’s devisee, legatee, or other designee or, if there is no such
designee, Employee’s estate.

7. Conflicts with Prior Employment Contract. Except as otherwise provided in
this Agreement, this Agreement constitutes the entire agreement among the
parties pertaining to the subject matter hereof, and supersedes and revokes any
and all prior or existing agreements, written or oral, relating to the subject
matter hereof, and this Agreement shall be solely determinative of the subject
matter hereof.

8. Restrictive Covenants; Confidential Information; Work Product; Injunctive
Relief.

8.1. No Material Competition.

(a) Employer and Employee acknowledge and agree that a strong relationship and
connection exists between Employer and its current and prospective patients,
referral sources, and customers as well as the hospitals and healthcare
facilities at which it provides professional services. Employer and Employee
further acknowledge and agree that the restrictive covenants described in this
Section are designed to enforce, and are ancillary to or part of, the promises
contained in this Agreement and are reasonably necessary to protect the
legitimate interests of Employer in the following: (i) the use and disclosure of
the Confidential Information as described in Section 8.4; and (ii) the
professional development activities described in Section 1.2. The foregoing
listing is by way of example only and shall not be construed to be an exclusive
or exhaustive list of such interests. Employee acknowledges that the restrictive
covenants set forth below are of significant value to Employer and were a
material inducement to Employer in agreeing to the terms of this Agreement.
Employee further acknowledges that the goodwill and other proprietary interest
of Employer will suffer irreparable and continuing damage in the event Employee
enters into competition with Employer in violation of this Section.

 

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Therefore, Employee agrees that, except with respect to services performed under
this Agreement on behalf of Employer, Employee shall not (without the consent of
Employer’s Supervisor, which consent may be granted or withheld in the sole
discretion of Employer’s Supervisor), at any time during the Restricted Period
(as defined below) for any reason, for Employee or on behalf of any other
person, persons, firm, partnership, corporation or employer, participate or
engage in or own an interest in, directly or indirectly, any individual
proprietorship, partnership, corporation, joint venture, trust or other form of
business entity, whether as an individual proprietor, partner, joint venturer,
officer, director, member, employee, consultant, independent contractor,
stockholder, lender, landlord, finder, agent, broker, trustee, or in any manner
whatsoever, if such entity or its affiliates is engaged in, directly or
indirectly, “Employer’s Business,” as defined on Exhibit A hereto. Employee
acknowledges that, as of the date hereof, Employee’s responsibilities will
include matters affecting the businesses of Employer listed on Exhibit A.

(b) Medical Services in Florida. Employee acknowledges that Employee’s duties
under this Agreement have included Employee’s active leadership relating to
medical practices owned or operated by Employer and by an affiliate of Employer
in the State of Florida. Employee further acknowledges that Employer and
Employer’s affiliates in Florida have a substantial investment in such medical
practices and that Employer and Employer’s affiliates would be economically
injured due to lost income in a material amount in the event Employee competes
with Employer or any of Employer’s affiliates in their primary market areas in
Florida. Accordingly, Employee agrees that Employee shall not (without the
consent of Employer’s Supervisor, which consent may be granted or withheld in
the sole discretion of Employer’s Supervisor), at any time during the Restricted
Period, for any reason, for Employee or on behalf of any other person, persons,
firm, partnership, corporation or employer, provide professional medical
services in any of the clinical practice areas described as Employer’s Business
on Exhibit A within a radius of twenty (20) miles of a medical practice owned or
operated by Employer or any of Employer’s affiliates in Florida.

For purposes of this Section 8, the “Restricted Period” shall mean the
Employment Period plus (i) twenty-four (24) months in the event this Agreement
is terminated pursuant to Section 4.4, 4.7 or 4.8, or (ii) twelve (12) months in
the event this Agreement is terminated for any other reason.

8.2. No Hire. Employee further agrees that Employee shall not (without the
consent of Employer’s Supervisor, which consent may be granted or withheld in
the sole discretion of Employer’s Supervisor), at any time during the Restricted
Period, for any reason, for Employee or on behalf of any other person, persons,
firm, partnership, corporation or employer, employ, or knowingly permit any
company or business directly or indirectly controlled by Employee to employ or
otherwise engage (a) any person who is a then current employee or independent
contractor of Employer or one of its affiliates, or (b) any person who was

 

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an employee or independent contractor of Employer or one of its affiliates in
the prior six (6) month period, or in any manner seek to induce such persons to
leave his or her employment or engagement with Employer or one of its affiliates
(including without limitation for or on behalf of a subsequent employer of
Employee). Notwithstanding the foregoing, it shall not be a violation of this
Section for Employee to participate in any capacity in a business venture after
termination of this Agreement with a current or former employee or independent
contractor of Employer or its affiliates if (i) Employee’s participation in such
business venture does not violate Section 8.1, (ii) Employee and such individual
were actively pursuing such business venture for a period of at least six
(6) months while both were employed or otherwise engaged by Employer, and
(iii) a period of at least one (1) year has elapsed since the termination of
Employee’s employment. Additionally, it shall not be a violation of this Section
for Employee to hire one of his administrative assistants at the time of his
termination for the purposes of Section 5.15 of this Agreement, or for any other
purpose.

8.3. Non-solicitation. Employee further agrees that Employee shall not (without
the consent of Employer’s Supervisor, which consent may be granted or withheld
in the sole discretion of Employer’s Supervisor), at any time during the
Restricted Period, for any reason, for Employee or on behalf of any other
person, persons, firm, partnership, corporation or employer, solicit or accept
business from or take any action that would interfere with, diminish or impair
the valuable relationships that Employer or its affiliates have with
(i) hospitals or other health care facilities with which Employer or its
affiliates have contracts to render professional services or otherwise have
established relationships, (ii) patients, (iii) referral sources, (iv) vendors,
(v) any other clients of Employer or its affiliates, or (vi) prospective
hospitals, patients, referral sources, vendors or clients whose business
Employee was aware that Employer or any affiliate of Employer was in the process
of soliciting at the time of Employee’s termination (including potential
acquisition targets).

8.4. Confidential Information. At all times during the term of this Agreement,
Employer shall provide Employee with access to “Confidential Information.” As
used in this Agreement, the term “Confidential Information” means any and all
confidential, proprietary or trade secret information, whether disclosed,
directly or indirectly, verbally, in writing or by any other means in tangible
or intangible form, including that which is conceived or developed by Employee,
applicable to or in any way related to: (i) patients with whom Employer has a
physician/patient relationship; (ii) the present or future business of Employer;
or (iii) the research and development of Employer. Without limiting the
generality of the foregoing, Confidential Information includes: (a) the
development and operation of Employer’s medical practices, including information
relating to budgeting, staffing needs, marketing, research, hospital
relationships, equipment capabilities, and other information concerning such
facilities and operations and specifically including the procedures and business
plans developed by Employer for use at the hospitals where Employer conducts its
business; (b) contractual arrangements between Employer and insurers or managed
care associations or other payors; (c) the databases of Employer; (d) the
clinical and research protocols of Employer, including coding guidelines;
(e) the referral sources of Employer; and (f) other confidential information of
Employer that is not generally known to the public that gives Employer the
opportunity to obtain an advantage over competitors who do not know or use it,
including the names, addresses, telephone numbers or special needs of any of its
patients, its patient lists, its marketing methods and related data, lists or
other written records used in Employer’s business, compensation paid to
employees and other terms of

 

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employment, accounting ledgers and financial statements, contracts and licenses,
business systems, business plan and projections, and computer programs. The
parties agree that, as between them, this Confidential Information constitutes
important, material, and confidential trade secrets that affect the successful
conduct of Employer’s business and its goodwill. Employer acknowledges that the
Confidential Information specifically enumerated above is special and unique
information and is not information that would be considered a part of the
general knowledge and skill Employee has or might otherwise obtain.

Notwithstanding the foregoing, Confidential Information shall not include any
information that (i) was known by Employee from a third party source before
disclosure by or on behalf of Employer, (ii) becomes available to Employee from
a source other than Employer that is not, to Employee’s knowledge, bound by a
duty of confidentiality to Employer, (iii) becomes generally available or known
in the industry other than as a result of its disclosure by Employee, or
(iv) has been independently developed by Employee and may be disclosed by
Employee without breach of this Agreement, provided, in each case, that Employee
shall bear the burden of demonstrating that the information falls under one of
the above-described exceptions.

Employee agrees that, except as required in the performance of Employee’s duties
as an employee of Employer, Employee will not at any time (without the consent
of Employer’s Supervisor, which consent may be granted or withheld in the sole
discretion of Employer’s Supervisor), whether during or subsequent to the term
of Employee’s employment with Employer, in any fashion, form or manner, unless
specifically consented to in writing by Employer, either directly or indirectly,
use or divulge, disclose, or communicate to any person, firm or corporation, in
any manner whatsoever, any Confidential Information of any kind, nature, or
description, subject to applicable law. In the event that Employee is requested
or ordered to disclose any Confidential Information, whether in a legal or a
regulatory proceeding or otherwise, Employee shall provide Employer with prompt
written notice of such request or order so that Employer may seek to prevent
disclosure or, if that cannot be achieved, the entry of a protective order or
other appropriate protective device or procedure in order to assure, to the
extent practicable, compliance with the provisions of this Agreement. In the
case of any disclosure required by law, Employee shall disclose only that
portion of the Confidential Information that Employee is ordered to disclose in
a legally binding subpoena, demand or similar order issued pursuant to a legal
or regulatory proceeding.

All Confidential Information, and all equipment, notebooks, documents,
memoranda, reports, files, samples, books, correspondence, lists, other written
and graphic records, in any media (including electronic or video) containing
Confidential Information or relating to the business of Employer, which Employee
shall prepare, use, construct, observe, possess, or control shall be and remain
Employer’s sole property (collectively “Employer Property”). Upon termination or
expiration of this Agreement, or earlier upon Employer’s request, Employee shall
promptly deliver to Employer all Employer Property, retaining none.

8.5. Ownership of Work Product. Employee agrees and acknowledges that all
copyrights, patents, trade secrets, trademarks, service marks, or other
intellectual property or proprietary rights associated with any ideas, concepts,
techniques, inventions, processes, or works of authorship developed or created
by Employee during the course of performing work for Employer and any other work
product conceived, created, designed, developed or contributed by Employee
during the term of

 

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this Agreement that relates in any way to Employer’s Business (collectively, the
“Work Product”), shall belong exclusively to Employer and shall, to the extent
possible, be considered a work made for hire within the meaning of Title 17 of
the United States Code. To the extent the Work Product may not be considered a
work made for hire owned exclusively by Employer, Employee hereby assigns to
Employer all right, title, and interest worldwide in and to such Work Product at
the time of its creation, without any requirement of further consideration. Upon
request of Employer, Employee shall take such further actions and execute such
further documents as Employer may deem necessary or desirable to further the
purposes of this Agreement, including without limitation separate assignments of
all right, title, and interest in and to all rights of copyright and all right,
title, and interest in and to any inventions or patents and any reissues or
extensions which may be granted therefor, and in and to any improvements,
additions to, or modifications thereto, which Employee may acquire by invention
or otherwise, the same to be held and enjoyed by Employer for its own use and
benefit, and for the use and benefit of Employer’s successors and assigns, as
fully and as entirely as the same might be held by Employee had this assignment
not been made.

8.6. Clearance Procedure for Proprietary Rights Not Claimed by Employer. In the
event that Employee wishes to create or develop, other than on Employer’s time
or using Employer’s resources, anything that may be considered Work Product but
of which Employee believes Employee should be entitled to the personal benefit,
Employee agrees to follow the clearance procedure set forth in this Section 8.6.
Before beginning any such work, Employee agrees to give Employer advance written
notice and provide Employer with a sufficiently detailed written description of
the work under consideration for Employer to make a determination regarding the
work. Unless otherwise agreed in a writing signed by Employer prior to receipt,
Employer shall have no obligation of confidentiality with respect to such
request or description. Employer will determine in its sole discretion, within
thirty (30) days after Employee has fully disclosed such plans to Employer,
whether rights in such work will be claimed by Employer. If Employer determines
that it does not claim rights in such work, Employer agrees to so notify
Employee in writing and Employee may retain ownership of the work to the extent
that such work has been expressly disclosed to Employer. If Employer fails to so
notify Employee within such thirty (30) day period, then Employer shall be
deemed to have agreed that such work is not considered Work Product for purposes
of this Agreement. Employee agrees to submit for further review any significant
improvement, modification, or adaptation that could reasonably be related to
Employer’s Business so that it can be determined by Employer whether the
improvement, modification, or adaptation relates to the business or interests of
Employer. Clearance under this procedure does not relieve Employee of the
restrictive covenants set forth in this Section 8.

8.7. Non-Disparagement and Medical Malpractice Cases. Employer agrees that for a
period of ten (10) years after the termination of this Agreement, Employer shall
not disparage Employee or otherwise impugn Employee’s name or reputation.
Employee agrees that for a period of ten (10) years after the termination of
this Agreement, Employee shall not (i) disparage Employer or any of Employer’s
affiliates (including any present, future or former agent, attorney, employee,
officer or director of Employer or any of Employer’s affiliates); (ii) impugn in
any manner the name or reputation of Employer or any of Employer’s affiliates
(including any present, future or former agent, attorney, employee, officer or
director of Employer or any of Employer’s affiliates); or (iii) speak or write
anything disparaging or critical of Employee’s work conditions or the

 

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circumstances of the termination of Employee’s employment with Employer.
Furthermore, for a period of ten (10) years after the termination of this
Agreement, Employee shall not serve as a medical consultant or expert witness
for any person or entity (including any attorney for such person or entity) in
any lawsuit or other proceeding against Employer or any Related Person (as
hereinafter defined). For purposes of this Section 8.7, each of the following is
a Related Person: (a) every present, future and former affiliate of Employer;
(b) every present, future and former agent, employee, officer and director of
Employer or any affiliate of Employer; and (c) every hospital at which
professionals affiliated with Employer have provided services at any time
material to the lawsuit or other proceeding.

8.8. Review by Employee. Employee has carefully read and considered the terms
and provisions of this Section 8, and having done so, agrees that the
restrictions set forth in this Section 8 are fair and reasonably required for
the protection of the interests of Employer. Without limiting other possible
remedies available to Employer, Employee agrees that injunctive or other
equitable relief will be available to enforce the covenants set forth in this
Section, such relief to be without the necessity of posting a bond. In the event
that, notwithstanding the foregoing, any part of the covenants set forth in this
Section 8 shall be held to be invalid, overbroad, or unenforceable by an
arbitration panel or a court of competent jurisdiction, the parties hereto agree
that such invalid, overbroad, or unenforceable provision(s) may be modified or
severed from this Agreement without, in any manner, affecting the remaining
portions of this Section 8 (all of which shall remain in full force and effect).
In the event that any provision of this Section 8 related to time period or
areas of restriction shall be declared by an arbitration panel or a court of
competent jurisdiction to exceed the maximum time period, area or activities
such arbitration panel or court deems reasonable and enforceable, said time
period or areas of restriction shall be deemed modified to the minimum extent
necessary to make the geographic or temporal restrictions or activities
reasonable and enforceable.

8.9. Survival and Termination of Payments and Benefits. The provisions of this
Section 8 shall survive the termination of this Agreement and Employee’s
employment with Employer. If Employee fails to comply fully with any provision
of this Section 8, Employee shall not be entitled to receive any further
payments or benefits of any kind under Section 5 of this Agreement (other than
Base Salary through date of termination and any amounts and/or benefits due
under Section 5.9, 5.10, or 5.13 hereof) and Employer shall have the right to
terminate without advance notice any and all other future payments and benefits
of every kind that otherwise would be due under Section 5 of this Agreement. The
provisions of this Section 8 are expressly intended to benefit and be
enforceable by other affiliated entities of Employer, who are express third
party beneficiaries hereof. Employee shall not assist others in engaging in any
of the activities described in the foregoing restrictive covenants. This
Section 8.9 shall not apply to the Restricted Share Units Agreements entered
into between Employee and Employer on August 20, 2008.

9. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or any alleged breach hereof shall be finally determined by binding
arbitration before a three member panel, consisting of one member selected by
each party hereto, with the third member selected by the first two arbitrators.
Each party hereto shall bear the costs of its own nominee, and shall share
equally the cost of the third arbitrator and the parties agree that the costs of
arbitration shall not be subject to reapportionment by the

 

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arbitration panel. The arbitration proceedings shall be held in Sunrise,
Florida, unless otherwise mutually agreed by the parties, and shall be conducted
in accordance with the Employment Arbitration Rules and Mediation Procedures of
the American Arbitration Association then in effect and any judgment or award
rendered by the arbitration panel may be entered and enforced by any court
having jurisdiction thereof. Notwithstanding anything herein to the contrary, if
Employer shall require immediate injunctive relief, then Employer shall be
entitled to seek such relief in any court having jurisdiction, and if Employer
elects to do so, Employee hereby consents to the jurisdiction of the state and
federal courts sitting in the State of Florida and to the applicable service of
process. Employee hereby waives and agrees not to assert, to the fullest extent
permitted by applicable law, any claim that (i) Employee is not subject to the
jurisdiction of such courts, (ii) Employee is immune from any legal process
issued by such courts and (iii) any litigation or other proceeding commenced in
such courts is brought in an inconvenient forum. Any such arbitration shall be
treated as confidential by all parties thereto, except as otherwise provided by
law or as otherwise necessary to enforce any judgment or order issued by the
arbitrators.

10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to its conflict
of laws principles to the extent that such principles would require the
application of laws other than the laws of the State of Florida.

11. Notices. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given when delivered by
hand or when deposited in the United States mail by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

 

If to Employer:    If to Employee: Pediatrix Medical Group, Inc.    Roger J.
Medel, M.D. 1301 Concord Terrace    c/o Pediatrix Medical Group, Inc. Sunrise,
FL 33323    1301 Concord Terrace Attention: General Counsel    Sunrise, FL 33323

or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.

12. Benefits: Binding Effect. This Agreement shall be for the benefit of and
binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns. Notwithstanding the foregoing, Employee may not assign the rights or
benefits hereunder without the prior written consent of Employer.

13. Severability. The invalidity of any one or more of the words, phrases,
sentences, clauses or Sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof.

14. Waivers. The waiver by either party hereto of a breach or violation of any
term or provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or violation.

 

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15. Damages. Nothing contained herein shall be construed to prevent Employer or
Employee from seeking and recovering from the other damages sustained by either
or both of them as a result of a breach of any term or provision of this
Agreement. In the event of any controversy or claim arising out of or relating
to this Agreement, each party will bear its own costs for arbitration or court
and attorneys’ fees.

16. No Third Party Beneficiary. Except as provided in Section 8.9, nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any person (other than the parties hereto and, in the case
of Employee, Employee’s heirs, personal representative(s) and/or legal
representative) any rights or remedies under or by reason of this Agreement. No
agreements or representations, oral or otherwise, express or implied, have been
made by either party with respect to the subject matter of this Agreement which
agreements or representations are not set forth expressly in this Agreement, and
this Agreement supersedes any other agreement between Employer and Employee.

17. Headings. The section headings in this Agreement are solely for convenience
of reference and form no part of this Agreement.

[Remainder of page left blank intentionally]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

 

EMPLOYER:     EMPLOYEE: PEDIATRIX MEDICAL GROUP, INC.     By:   /s/ Michael B.
Fernandez     /s/ Roger J. Medel, M.D.   Michael B. Fernandez     Roger J.
Medel, M.D.   Chairman, Compensation Committee    

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EXHIBIT A

BUSINESS OF EMPLOYER

As of the date hereof, Employer, directly or through its affiliates, provides
professional medical services and all aspects of practice management services in
medical practice areas that include, but are not limited to, the following
(collectively referred to herein as “Employer’s Business”):

 

  (1) Neonatology, including hospital well baby care;

 

  (2) Maternal-Fetal Medicine, including general obstetrics services;

 

  (3) Pediatric Cardiology;

 

  (4) Pediatric Intensive Care, including Pediatric Hospitalist Care;

 

  (5) Anesthesiology; and

 

  (6) Newborn hearing screening services;

References to Employer’s Business in this Agreement shall include such other
medical service lines, practice management services and other businesses entered
into by Employer after the date hereof but during the term of this Agreement;
provided, that to be considered a part of Employer’s Business, Employer must
have engaged in such other service line, practice management service or other
business at least six (6) months prior to the termination date of this
Agreement. For purposes of this Exhibit A, businesses of Employer shall include
the businesses conducted by Employer’s subsidiaries, entities under common
control and affiliates as defined under Rule 144 of the Securities Act of 1933,
as amended. Such affiliates shall include the professional corporations and
associations whose operating results are consolidated with Employer for
financial reporting purposes.

Notwithstanding the foregoing, Employer acknowledges and agrees to the following
exceptions and clarifications regarding the scope of Employer’s Business.

A. Practice Management Services. Employer acknowledges that, as of the date
hereof, Employer’s Business relates to the delivery of both professional and
practice management services in the forgoing practice areas. Therefore, as of
the date hereof, Employer acknowledges that it would not be a violation of
Section 8.1 of the Agreement for Employee to provide services to a practice
management company (such as a billing company or management services
organization (MSO)) if such practice management company is not owned by,
affiliated with (as defined under Rule 144 of the Securities Act of 1933, as
amended) or under common control with a health care provider that provides
services in the medical services areas included in Employer’s Business. Subject
to paragraph C below, the provisions of this paragraph shall not apply to the
extent that, after the date hereof, Employer enters into a business that
involves the delivery of practice management services to unrelated third
parties.

B. Hospital Services. Employer and Employee acknowledge that, as of the date
hereof, Employer does not currently operate hospitals, hospital systems or
universities. Nevertheless, the businesses of hospitals, hospital systems and
universities would be the same as Employer’s Business where such hospitals,
hospital systems or universities provide some or all of the medical services

 

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included in Employer’s Business. Therefore, the parties desire to clarify their
intent with respect to the limitations on Employee’s ability to work for a
hospital, hospital system or university after termination of this Agreement.
Section 8.1 shall not be deemed to restrict Employee’s ability to work for a
hospital, hospital system or university if the hospital, hospital system or
university does not provide any of the medical services included in Employer’s
Business. Furthermore, even if a hospital, hospital system or university
provides medical services that are included in Employer’s Business, Employee may
work for such hospital, hospital system or university if (i) Employee has no
direct supervisory responsibility for or involvement in the hospital’s, hospital
system’s or university’s medical services that are Employer’s Business, and
(ii) Employee would not otherwise violate Section 8.1(b). Finally, Employer
agrees that Employee may hold direct supervisory responsibility for or be
involved in the medical services of a hospital, hospital system or university
that are included in Employer’s Business so long as such hospital, hospital
system or university is located at least ten (10) miles from a medical practice
owned or operated by Employer or its affiliate. Subject to paragraph C below,
the provisions of this paragraph shall not apply to the extent that, after the
date hereof, Employer enters into the business of operating a hospital or health
system.

C. DeMinimus Exception. Employer agrees that a medical service line (other than
those listed in items 1 through 5 above), practice management service or other
business entered into by Employer shall not be considered to be a part of
Employer’s Business if such medical service line, practice management service or
other business constitutes less than Fifteen Million Dollars ($15,000,000) of
Employer’s annual revenues.

D. Certain Ownership Interests. It shall not be deemed to be a violation of
Section 8.1 for Employee to: (i) own, directly or indirectly, five percent
(5%) or less of a publicly-traded entity; or (ii) own, directly or indirectly,
less than five percent (5%) of a privately-held business or company, if Employee
is at all times a passive investor with no board representation, management
authority or other special rights to control operations of such business.

 

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EXHIBIT B

FORM OF RELEASE

AGREEMENT OF GENERAL RELEASE

This Agreement of General Release (“General Release”) is hereby made and entered
into between (“Employer”) and ROGER J. MEDEL, M.D. (“Employee”) to be effective
as set forth in Section 8 below.

1. Employee, for himself and his family, heirs, executors, administrators, legal
representatives and their respective successors and assigns, in exchange for the
consideration to be provided pursuant to Section 5 of the Employment Agreement
entered into by and between Employee and Pediatrix Medical Group, Inc. effective
as of August 20, 2008 (the “Employment Agreement”), hereby gives up, releases,
and discharges Employer, its subsidiaries, affiliated companies, successors and
assigns, and its current and former directors, officers, employees, shareholders
and agents in such capacities (collectively with Employer, the “Released
Parties”) from any and all rights and claims that Employee may have against the
Released Parties as of the effective date of this Agreement arising from or in
connection with Employee’s employment or termination of employment with
Employer, including without limitation any and all rights and claims to or for
attorneys’ fees, whether or not Employee presently is aware of such rights or
claims or suspects them to exist. These rights and claims include, but are not
limited to, any and all rights and claims which Employee may have under, or
arising out of, the Age Discrimination in Employment Act of 1967, as amended
(the “ADEA”); the Americans with Disabilities Act of 1990, as amended; the
Family and Medical Leave Act; Title VII of the Civil Rights Act of 1964, as
amended; and any other federal, state or local constitution, statute, ordinance,
executive order, or common law.

2. Notwithstanding anything in Paragraph 1 above to the contrary, this General
Release shall not apply to (i) any actions to enforce rights to receive any
payments or benefits which may be due Employee pursuant to Section 5 of the
Employment Agreement, or under any of Employer’s employee benefit plans;
(ii) any rights or claims that may arise as a result of events occurring after
the date this General Release is signed by Employee, (iii) any indemnification
rights Employee may have as a former officer or director of Employer or its
subsidiaries or affiliated companies, (iv) any claims for benefits under any
directors’ and officers’ liability policy maintained by Employer or its
subsidiaries or affiliated companies in accordance with the terms of such
policy, and (v) any rights Employee may have as a holder of equity securities of
Employer.

3. Employee represents that he has not filed against the Released Parties any
complaints, charges, or lawsuits arising out of his employment, termination of
employment, or any other matter arising on or prior to the date Employee signed
this General Release, and covenants and agrees that he will never individually
or with any person or entity file, or commence the filing of, any charge,
lawsuit, complaint or proceeding with any governmental agency, or against the
Released Parties with respect to any of the matters released by Employee
pursuant to Paragraph 1 hereof (a “Proceeding”); provided, however, Employee
retains the right to commence a Proceeding to challenge whether Employee
knowingly and voluntarily waived his rights under ADEA.

 

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4. Employee shall have twenty-one (21) days to sign this General Release, but he
may knowingly and voluntarily waive that twenty-one (21) day period by signing
this General Release earlier. Employee shall have seven (7) days following the
date on which he signs this General Release within which he may revoke it by
providing a written notice of his revocation to Employer.

5. This General Release will be governed by and construed and enforced in
accordance with the internal laws of the State of Florida applicable to
contracts made and to be performed entirely within such State.

6. Employee acknowledges that he has read this General Release, that he is
hereby advised to consult with an attorney before he signs this General Release,
and that he understands all of its terms and signs it voluntarily and with full
knowledge of its significance and the consequences thereof.

7. If any provision of this General Release, or any part thereof, is determined
to be invalid or unenforceable by a court having jurisdiction in the matter, all
of the remaining provisions and parts of this General Release shall remain fully
enforceable.

8. This General Release shall take effect on the eighth day following Employee’s
signing it unless Employee’s written revocation is delivered to Employer within
seven (7) days after Employee signs this General Release, in which case this
General Release shall be null and void and of no legal effect.

 

EMPLOYER:       EMPLOYEE: PEDIATRIX MEDICAL GROUP, INC.       By:              
      Roger J. Medel, M.D.         Name:           Date:         Date:    

 

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