Ex-10.1



 



Exhibit 10.1



EMPLOYMENT AGREEMENT



     THIS EMPLOYMENT AGREEMENT dated as of August 28, 1995 and by and between
MEDCATH, INC., a North Carolina corporation (the “Corporation”); and Joan
McCanless (“McCanless”), a resident of North Carolina (the “Agreement”).


     WHEREAS, the Corporation desires to employ McCanless as a full-time
employee and McCanless desires to accept that position in accordance with the
terms hereof;


     NOW, THEREFORE, it is agreed as follows:


     1.    Employment. For new and very valuable consideration described herein,
the Corporation shall employ McCanless and McCanless accepts employment upon
the terms and conditions hereinafter set forth.


     2.    Duties. As an employee, McCanless shall be employed as Vice President
— Disease Management (Title to be revised upon commencement of employment.)
As such she shall be responsible for developing clinical pathways at all of
MedCath’s heart Hospitals, working with the physicians and Hospital Presidents
to install pathways and train clinical personnel, develop MedCath’s data bases
for caturing clinical outcomes and any and all other areas of Disease
Management or clinical analysis as may be identified by Officers of the
Corporation. She may also potentially have duties relating to the development
and operation of freestanding cardiac catheterization centers, cardiac imaging
centers, heart hospitals, mobile cardiac catheterization unit routes,
cardiology related programs, or such other duties as shall be assigned to her
from time to time by the Officers of the Corporation.


     During the term of employment hereunder, McCanless shall not be engaged in
any other business activity whether or not such business activity is pursued
for gain, profit, or other pecuniary advantage unless agreed on by the
President of the Corporation. It is understood that McCanless is currently an
Officer and principle shareholder in Decision Support Systems, a privately held
Corporation. McCanless and the Corporation agree that she will, prior to
joining MedCath engage personnel to replace her on a day-to-day operating basis
at Decision Support Systems and that her involvement will continue on a
Director level only. If at any time in the future, in the sole discretion of
the Corporation, McCanless’s ownership interest in Decision Support Systems
detracts from her performance at MedCath, or in any way causes a conflict with
MedCath’s interests, then McCanless agrees to divest herself of that ownership
interest in a timely fashion.


     3.    Compensation. For and in consideration of the services to be rendered
by McCanless hereunder, the Corporation shall pay to McCanless an annual salary
of One Hundred Thousand Dollars ($100,000.00) and continue during the term of
this agreement and which shall be paid on a monthly basis unless otherwise
agreed to by the parties hereto. McCanless shall also participate in an annual
bonus compensation plan each year of her employment. The initial bonus plan
will be $30,000 relating to goals and objectives pertaining to the management
of the


 






 


Diagnostic Division. McCanless’s salary shall be reviewed by the Chief
Operating Officer of the Corporation on an annual basis. McCanless will only
be eligible for the bonus award if she is employed by the Corporation on the
last day of the year for which the bonus applies. During McCanless’s initial
year of employment she will be guaranteed a minimum bonus of $10,000.


     4.    Miscellaneous Benefits. During her employment, the Corporation shall
provide McCanless with additional benefits substantially equivalent to those
which are generally provided to other similar employees of the Corporation.
The Corporation shall reimburse McCanless for reasonable expenses incurred by
her in the course of her employment with the Corporation provided those
expenses are consistent with reasonable policies provided from time to time by
the Corporation’s Board of Directors.


     5.    Termination of Employment.


             (a)    By the Corporation for Cause. The Corporation shall have the right to
terminate McCanless’s employment for cause as provided herein by giving written
notice thereof. “Cause” shall mean that McCanless commits a willful act of
fraud, dishonesty or disloyalty toward the company; is convicted of criminal
conduct resulting in a jail sentence (whether or not such sentence is
suspended); engages in conduct significantly injurious to the Corporation
monetarily; violates a material term of this Agreement including, but not
limited to, failure to fulfill the duties assigned to McCanless by the
Corporation; becomes disabled; or submits a notice of resignation to the
Corporation. McCanless shall be deemed disabled if she has been unable, by
reason of physical or mental infirmity, to perform on a full-time basis her
assigned responsibilities. The existence of disability shall be reasonably
determined by the Board of Directors of the Corporation.


             (b)    By the Corporation Without Cause. Subject to (d) below, the
Corporation may terminate McCanless’s employment at any time without cause by
giving McCanless written notice thereof.


             (c)    By McCanless. McCanless may terminate her employment upon at least
(45) days’ written notice.


             (d)    Salary and Benefits.    (i) If the Corporation terminates McCanless’s
employment under this Agreement for any reason other than cause, the
Corporation will continue to be liable for her salary and all accrued bonuses
to be paid on a monthly basis for a period of six (6) months following the date
of termination, as long as and only if McCanless is not otherwise in default
hereunder during that period; provided, however, that her salary shall not be
payable once McCanless becomes employed substantially full-time or otherwise
earns, on a monthly basis, at least 75% of her monthly salary hereunder. (ii)
Upon any termination of McCanless’s employment for cause, McCanless shall not
be entitled to any further salary, bonuses or benefits following the date of
termination of her employment. (iii) Upon termination of McCanless’s
employment for any reason, McCanless shall be entitled to receive only such
additional benefits which have accrued or become payable to her prior to the
end of her actual employment. (iv) Upon termination, McCanless shall not be
entitled to any additional salary or benefits other than those accrued prior to
the date of termination. Notwithstanding anything in


 






 


this Agreement to the contrary, no further salary or benefits shall be due to
McCanless once she begins to receive the proceeds of any disability insurance
policy.


     6.    Confidentiality, Non-Disclosure and Non-Competition. During the course
of McCanless’s employment, McCanless has been and will be exposed and have
access to substantial quantities of information and technology (the
“Confidential Information”) relating to the Corporation’s business that are
valuable trade secrets or confidential information, including information
concerning customers, operations, pricing, technology and marketing strategies.


     The Confidential Information was developed, compiled and/or tested by the
Corporation at considerable amounts of money in building upon and expanding
that Confidential Information. The Confidential Information enables the
Corporation to conduct is business with success and with a competitive
advantage as long as the Confidential Information remains not generally known
to others, whether those others operate in direct competition with the company
or its customers or begin operations in geographical areas which are of
interest to the Corporation, specifically within the United States.


     McCanless, by reason of her role as an employee of the company, is
familiar with and has access to the Corporation’s customers and their needs and
to the marketing and pricing pursued by the Corporation with respect to those
customers and the Corporation’s products and services.


     This Paragraph is designed to prohibit McCanless from using the
Confidential Information and knowledge and relationships developed as an
insider of the Corporation for her own benefit or for the benefit of parties
other than the Corporation. The Corporation would not give McCanless access to
the Confidential Information and authority without McCanless’s execution of
this Agreement and McCanless willingly signs this Agreement because she has
received additional consideration to do so and because she believes her
relationship with the Corporation is and will be in her own best interest.
Both parties agree that this Paragraph’s provisions should be construed broadly
in favor of the Corporation.


     In light of the foregoing, the parties agree as follows:



		
	 	(a)    Confidential Information.
	 
	 	McCanless promises that:







		
	 	       (i)     During or after termination of her relationship with the
Corporation, she will not, directly or indirectly, use, or disclose
or make available to anyone outside the Corporation, any
Confidential Information.




		
	 	       (ii)    she will safeguard all Confidential Information at all
times so that it is not exposed to, or taken by, unauthorized
persons, and, when entrusted to her, will exercise her best efforts
to assure to safekeeping.



 






 








		
	 	(b)    Competition.




		
	 	McCanless agrees that:




		
	 	       (i)     she will not, during the period of her relationship with
the Corporation, engage or be interested, directly or indirectly,
in any manner, as a partner, officer, director, advisor, employee
or in any other capacity in any business similar to business to the
Corporation.




		
	 	       (ii)    The Corporation’s business is unusual and that by virtue
of her relationship with the Corporation she is, and will become
more, familiar with and close to the Confidential Information and
the Company’s business and Customers. In the event her
relationship with the Corporation ceases for any reason, she will
not engage in, for a period of eighteen (18) months after that
termination, in any manner directly or indirectly, whether as an
employee, officer, owner, partner, shareholder, consultant or
otherwise, in any business or other activity similar in business to
and in competition with the company within seventy-five (75) miles
of any location which the Corporation has (x) provided cardiology
services of any type whatsoever during her employment with the
Corporation, or (y) made a written proposal to provide such
services, which proposal was made at least in part as a result of
the efforts of McCanless.



     7.    Enforcement. If there is a breach or threatened breach of the
provisions of Paragraph 6 of this Agreement, in addition to other remedies at
law or equity, the Corporation shall be entitled to injunctive relief. The
parties desire and intend that the provisions of Paragraph 6 shall be enforced
to the fullest extent permissible under the law and public policies applied,
but the unenforceability or modification of any particular paragraph,
subparagraph, sentence, clause, phrase, word, or figure be adjudicated to be
wholly invalid or unenforceable, the balance of Paragraph 6 shall thereupon be
modified in order to render the same valid and enforceable.


     8.    Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be sent by registered mail, by other
reasonable means of delivery providing overnight service, or by hand to
McCanless at__________________; to the Corporation at 7621 Little Avenue, Suite 106, Charlotte,
NC 28226. Notice shall be deemed to have been given when deposited with the
Postal Service or other delivery service or, if delivered by hand, when
received by the addressee. A party may change the address to which notice to
it must be given by advising the other parties in writing of the new address.


     9.    Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the waiving party.


     10.   Assignment. The rights and obligations of the Corporation under this
Agreement shall insure to the benefit of and shall be binding upon the
successors and assigns of the


 






 


Corporation. As a personal service contract the rights and obligations of
McCanless under this agreement may not be assigned by her.


     11.    Entire Agreement. This instrument may not be changed orally but only
by an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.


     12.    Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of North Carolina Applicable to contracts made and to be
performed in this State, without reference to choice of laws principles, and
that law shall be applied in connection with its enforcement in other states
and jurisdictions to the fullest extent possible.


     IN WITNESS WHEREOF, the parties have signed and sealed this Agreement as
of the date first above written.



	 	 	 
	 	 	
MEDCATH INCORPORATED
	 
	 	By:	
            /s/ David Crane



                        David Crane

                        Chief Operating Officer



/s/ Joan
McCanless        

Joan McCanless


 






 


Attachment A:


     Confidential information shall not include information that is in the
public domain or is available or shall become available to McCanless by means
other than her employment with the company.


Attachment B:


     For purposes of this agreement, confidential information shall not include
information related to the development, implementation, and automation of
clinical paths, which was previously known or in the public domain.


                    /s/
Joan McCanless  8/7/95