EXECUTIVE EMPLOYMENT AGREEMENT

         This Employment  Agreement  (this  "Agreement") is by and between Prime
Medical  Services,  Inc.,  a Delaware  corporation  ("Employer")  and Kenneth S.
Shifrin, an individual  ("Executive"),  and shall be effective as of November 1,
2000 (the "Effective Date").

                             Preliminary Statements

         Executive  desires  to be  employed  by  Employer  upon the  terms  and
conditions  stated herein,  and Employer  desires to employ  Executive  provided
that,  in so doing,  it can  protect  its  confidential  information,  business,
accounts, patronage and goodwill.

         Employer and Executive have  specifically  determined that the terms of
this Agreement are fair and reasonable.

                             Statement of Agreement

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained herein, and for other good,  valuable and binding  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the parties hereto,
intending to be legally bound hereby, agree as follows:

                                   ARTICLE I.

                      Term; Termination; Prior Agreements.

     Section 1.1 Term.  Employer  hereby hires  Executive and Executive  accepts
such employment for a term of two years commencing on the Effective Date.

         Section 1.2 Termination Upon Expiration.  Unless earlier  terminated by
Employer  or  Executive  in  accordance  with the terms of this  Agreement,  and
subject to any  extension  of the term of this  Agreement  pursuant  to the last
sentence of Section 1.5, this Agreement shall terminate  automatically  upon the
expiration of the two-year term described in Section 1.1.

         Section  1.3  Termination  Upon  Death or  Permanent  Disability.  This
Agreement shall be automatically  terminated on the death of Executive or on the
permanent  disability  of Executive if Executive is no longer able to perform in
all material  respects the usual and customary duties of Executive's  employment
hereunder.  For purposes hereof, any condition which in reasonable likelihood is
expected to impair Executive's  ability to materially perform Executive's duties
hereunder  for a period  of three  months  or more  shall  be  considered  to be
permanent.

         Section  1.4  Termination  for Cause.  If this  Agreement  has not been
previously  terminated,  and no party has previously given notice of termination
pursuant to Section 1.5, Section 1.6 or Section 1.7, then Employer may terminate
this Agreement "for cause" if:

     (a) In connection with the business of Employer,  Executive is convicted of
an offense constituting a felony or involving moral turpitude; or

                  (b) in a material  and  substantial  way,  (i)  Executive  (A)
violates  any written  policy of Employer,  (B)  violates any  provision of this
Agreement,  (C) fails to follow  reasonable  written  instructions or directions
from the Board of  Directors  of  Employer  (the  "Board"),  or (D) fails to use
good-faith  efforts to perform the services required pursuant to this Agreement;
and (ii)  Executive  fails to materially  cure such  violation or failure within
fifteen days after  receiving  written notice from the Board clearly  specifying
the act or circumstances that gave rise to such violation or failure.

         A notice of  termination  pursuant to this Section  shall be in writing
and shall state the alleged reason for termination.  Executive,  within not less
than  fifteen nor more than thirty  days after such  notice,  shall be given the
opportunity  to appear  before the Board,  or a committee  thereof,  to rebut or
dispute  the  alleged  reason  for  termination.   If  the  Board  or  committee
determines,  by a majority of the  disinterested  directors,  after having given
Executive the opportunity to rebut or dispute the allegations,  that such reason
is indeed valid, Employer may immediately terminate Executive's employment under
this Agreement for cause.  Immediately  upon giving the notice  contemplated  by
this  paragraph,  Employer may elect,  during the pendency of such  inquiry,  to
relieve Executive of Executive's regular duties.

         Section 1.5 Termination  for Good Reason.  Any termination by Executive
of this  Agreement  pursuant to this Section  shall be deemed a  termination  by
Executive for "good  reason".  Executive may terminate  this  Agreement for good
reason  any  time  after a  Change  of  Control  in  accordance  with any of the
following  (with the further  agreement  that any  election by  Executive to not
terminate this Agreement  pursuant to this Section following a particular Change
of Control  shall not prevent the  application  of this  Section to a subsequent
Change of Control):

                  (a)  Executive  may  terminate  this  Agreement  for any or no
reason upon six months prior written notice, which notice cannot be given before
the  consummation  of such Change of Control or after the expiration of the term
of this Agreement pursuant to Section 1.1;

     (b) Executive may terminate  this  Agreement upon thirty days prior written
notice if Executive's base salary, as provided hereunder, is diminished;

                  (c) Executive may terminate  this  Agreement  upon thirty days
prior written  notice if Employer  requires that  Executive move to a city other
than Austin;

                  (d) Executive may terminate  this  Agreement  upon thirty days
prior written  notice if the Board or any or any other person  authorized to act
by the Board (for  purposes of this  Agreement,  any such  authorized  person is
referred to as an  "Authorized  Board  Designee")  materially  and  unreasonably
interferes with Executive's ability to fulfill Executive's job duties; or

                  (e) Executive may terminate  this  Agreement  upon thirty days
prior written  notice if Executive is  reassigned to a position with  diminished
responsibilities, or Executive's job responsibilities are materially narrowed or
diminished.

         Without limiting the provisions of Section 1.8 hereof, Executive agrees
that Employer can relieve Executive of Executive's duties hereunder prior to the
end of the applicable  notice period  provided for in this Section,  and in such
event,  Executive  shall not  thereafter  be entitled to any of the  benefits or
salary described in Article III hereof.

         If Employer does not relieve Executive of Executive's duties during any
applicable  notice period under this Section,  and the applicable  notice period
extends beyond the expiration of the term of this Agreement  pursuant to Section
1.2, then the terms and  provisions of this Agreement  shall govern  Executive's
employment by Employer until the end of such notice period, and the term of this
Agreement  shall be deemed  automatically  extended until the end of such notice
period.

         Section  1.6  Termination  of  Agreement  by  Employer  Without  Cause.
Employer has the right to terminate this  Agreement,  other than "for cause," on
30 days prior written  notice.  Any  termination  of this  Agreement by Employer
other than pursuant to the express terms of Section 1.2,  Section 1.3 or Section
1.4 shall be deemed a  termination  pursuant to this  Section,  irrespective  of
whether the notice required under this Section is properly given.

         Section 1.7 Termination of Agreement by Executive  Without Good Reason.
Executive may terminate  Executive's  employment,  other than for "good reason,"
upon 30 days prior  written  notice  stating that this  Agreement is  terminated
other  than for "good  reason".  Executive  agrees  that  Employer  can  relieve
Executive of Executive's duties hereunder prior to the end of such 30 day notice
period, and in such event,  Executive shall not thereafter be entitled to any of
the benefits or salary described in Article III hereof.

     Section 1.8 Executive's  Rights Upon Termination.  Upon termination of this
Agreement, Executive shall be entitled to the following:

                  (a) If this  Agreement is terminated  pursuant to Section 1.2,
Section 1.3,  Section 1.4, or Section 1.7 then  Employer  shall pay Executive or
Executive's  representative,  as the case may be, Executive's  then-current base
salary (excluding any bonuses and non-cash  benefits) through the effective date
of termination  (which,  in the case of Section 1.7, shall follow any portion of
the  applicable  notice period  during which  Executive has not been relieved of
Executive's  duties hereunder),  and Employer shall have no further  obligations
hereunder.

                  (b)  If  Employer  terminates  this  Agreement  without  cause
pursuant to Section 1.6 or otherwise,  or Executive  terminates  this  Agreement
pursuant to Section 1.5, then, in addition to receiving Executive's then current
base salary  through the  effective  date of  termination,  Executive  (i) shall
receive within 15 days of the effective  date of termination a lump-sum  payment
equal to the greater of (A)  Executive's  then  current  annualized  base salary
multiplied  by two,  or (B)  $600,000,  and (ii) unless the  termination  was by
Executive  pursuant to Section 1.5(a),  shall be released from the provisions of
Section 4.2, notwithstanding that the provisions of such Section would otherwise
survive termination of this Agreement pursuant to Section 1.9.  Furthermore,  if
this Agreement is terminated after a Change of Control,  and Executive holds any
rights or options  exercisable or exchangeable for, or convertible into, a class
of capital stock of Employer  that is not or will not be publicly  traded on the
NASDAQ or another national exchange after such termination or Change of Control,
then Employer agrees to buy from Executive all such rights and options that have
an exercise price below the per share price assigned to the capital stock in the
Change of Control,  or if no price was  assigned,  the per share market price on
the date of the Change of Control  (whichever  price is applicable,  the "Market
Price"). The purchase price for each such right or option shall be determined by
multiplying  the number of shares of capital  stock that may be  acquired  using
such right or option by the difference between the exercise price stated in such
right or option and the Market  Price.  Executive  and  Employer  agree that the
effective date of any  termination  pursuant to Section 1.5 shall be the earlier
of the  end of the  applicable  notice  period  or the  date on  which  Employer
relieves Executive of Executive's duties hereunder. Executive and Employer agree
that the effective date of any termination  pursuant to Section 1.6 hereof shall
be only upon the  expiration  of the 30 day notice  period  described in Section
1.6,  regardless of whether Employer  earlier relieves  Executive of Executive's
duties hereunder.

         Section 1.9 Survival; No Effect on Deferred Compensation  Arrangements.
Any termination of this Agreement and Executive's employment as a result thereof
shall not release either Employer or Executive from their respective obligations
to the date of termination  nor from the provisions of this Agreement  which, by
necessary or reasonable implication,  are intended to apply after termination of
this Agreement,  including,  without  limitation,  the provisions of Article IV.
Furthermore,  neither the  termination of this Agreement nor the  termination of
Executive's  employment  under this Agreement shall affect,  limit, or modify in
any manner the  existence or  enforceability  of any written  agreement  between
Executive  and Employer  related to or providing  for deferred  compensation  of
Executive (or any similar written arrangement).

         Section  1.10   Termination  of  Existing   Agreements.   Any  previous
employment  agreement  between  Executive on the one hand and Employer or any of
Employer's  Affiliates  (as  hereinafter  defined)  on the other  hand is hereby
terminated.

     Section 1.11 "Change of  Control."  As used in this  Agreement,  "Change of
Control" shall mean the occurrence of any of the following:

                  (a) Any  person,  entity or "group"  within the meaning of ss.
13(d) or 14(d) of the of the  Securities and Exchange Act of 1934 (the "Exchange
Act") becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the  Exchange  Act) of more than 50% of the  combined  voting power of the
then outstanding voting securities entitled to vote generally in the election of
the Board;

                  (b)  a  merger,   reorganization   or  consolidation   whereby
Employer's   equity  holders   existing   immediately   prior  to  such  merger,
reorganization or consolidation do not,  immediately after  consummation of such
reorganization,  merger  or  consolidation,  own more  than 50% of the  combined
voting  power of the  surviving  entity's  then  outstanding  voting  securities
entitled to vote generally in the election of directors;

                  (c) the sale of all or substantially  all of Employer's assets
to an entity in which Employer, any subsidiary of Employer, or Employer's equity
holders existing  immediately  prior to such sale beneficially own less than 50%
of the combined voting power of such acquiring  entity's then outstanding voting
securities entitled to vote generally in the election of directors; or

                  (d) any change in the  identity of  directors  constituting  a
majority of the Board within a  twenty-four  month period  unless the change was
approved by a majority of the Incumbent  Directors,  where "Incumbent  Director"
means a  member  of the  Board  at the  beginning  of the  period  in  question,
including  any  director  who was not a member of the Board at the  beginning of
such  period  but  was  elected  or  nominated  to  the  Board  by,  or  on  the
recommendation  of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors.

                                   ARTICLE II.

                               Duties of Executive

         Subject to the approvals by and the ultimate  supervision of the Board,
Executive  during the term  hereof  shall  serve as the  Chairman  of the Board.
Subject to the control of the Board,  Executive shall have the  responsibilities
commensurate  with  Executive's  title and as otherwise  provided in  Employer's
bylaws and other governing  documents,  but in any event,  construed in a manner
generally  consistent  with  the  responsibilities  of  Executive  that  existed
immediately prior to the Effective Date.

         During the period of employment  hereunder,  Executive  shall devote to
the business of Employer  substantially  the same amount of Executive's time and
efforts  that  Executive  devoted  to the  business  of  Employer  prior  to the
Effective Date; provided,  however,  that this Section shall not be construed as
preventing  Executive from  investing  Executive's  personal  assets in business
ventures  that  do not  compete  with  Employer  or  Employer's  Affiliates  (as
hereinafter  defined) or are not  otherwise  prohibited by this  Agreement,  and
spending reasonable amounts of personal time in the management thereof. Employer
acknowledges  that  Executive  owns a material  ownership  interest  in American
Physicians Service Group, Inc., a Texas corporation  ("APS"), and that Executive
serves as both a director and officer of APS. Employer agrees that Executive may
continue to serve APS in such capacities and devote Executive's time and efforts
to such  service  in a manner  generally  consistent  with the time and  efforts
devoted by Executive prior to the Effective Date. Consistent with the foregoing,
Executive  shall use  Executive's  best  efforts to  promote  the  interests  of
Employer and Employer's Affiliates,  and to preserve their goodwill with respect
to their  employees,  customers,  suppliers  and other persons  having  business
relations  with Employer.  Executive  agrees to accept and hold all such offices
and/or  directorships  with  Employer  and  Employer's  Affiliates  as to  which
Executive  may, from time to time, be elected.  For purposes of this  Agreement,
Employer's subsidiaries,  parent companies and other affiliates are collectively
referred to as "Affiliates."

                                  ARTICLE III.

                         Salary; Expense Reimbursements

         Section 3.1 Salary.  As compensation for Executive's  service under and
during  the  term  of  this  Agreement  (or  until  terminated  pursuant  to the
provisions hereof) Employer shall pay Executive a salary of $25,000 per calendar
month  (prorated for partial  months),  payable in  accordance  with the regular
payroll practices of Employer, as in effect from time to time. Such salary shall
be subject to withholding for the prescribed federal income tax, social security
and  other  items  as  required  by law  and for  other  items  consistent  with
Employer's  policy with respect to health  insurance and other benefit plans for
similarly  situated  employees  of  Employer  in which  Executive  may  elect to
participate.

         Section  3.2  Other  Benefits.  During  the  term  of  this  Agreement,
Executive also shall be entitled to the same amount of paid vacation per year as
was  available to Executive and other senior  management  executives of Employer
under the policy of Employer in effect on the Effective Date. Executive will not
be paid for unused  vacation,  and unused  vacation cannot be carried forward to
subsequent years.  Without limiting the foregoing,  Executive shall also receive
such paid sick leave,  insurance and other fringe benefits as are generally made
available  to  other  personnel  of  Employer  in  comparable  positions,   with
comparable service credit and with comparable duties and  responsibilities.  Any
benefits in excess of those granted other  salaried  employees of Employer shall
be subject to the prior  approval of the Board.  Notwithstanding  the foregoing,
(a) Executive  shall be entitled to participate in Employer's  annual  Executive
Incentive  Compensation  Pool  which  is  allocated  to  participants  based  on
individual  and  company  wide  goal  attainment,  as  determined  in  the  sole
discretion of the Board,  and (b) Executive shall be eligible for  participation
in Employer's Stock Option Plan (if any), but all option grants thereunder shall
be subject to the sole discretion of the Board.

         Section  3.3  Bonuses.  In the  discretion  of the Board,  and  without
implying  any  obligation  on  Employer  ever to  award a  bonus  to  Executive,
Executive  may from time to time be awarded a cash bonus or bonuses for services
rendered  to  Employer  during  the term of  Executive's  employment  under this
Agreement.  If and to the extent a bonus is ever considered for Executive, it is
expected  that any such bonus will be based not only on  Executive's  individual
performance   and   Executive's   relative   position,    service   tenure   and
responsibilities with Employer, but also on the performance and profitability of
the entire business of Employer.

         Section  3.4  Expenses.   Employer   shall   reimburse  all  reasonable
out-of-pocket  travel and business  expenses incurred by Executive in connection
with the performance of Executive's duties pursuant to this Agreement. Executive
shall provide  Employer with  documentation of Executive's  expenses,  in a form
acceptable  to  Employer  and which  satisfies  applicable  federal  income  tax
reporting and record keeping requirements.

         Section 3.5 Location of Employment.  The parties  acknowledge and agree
that Executive's  employment duties hereunder are performable in Austin,  Texas,
subject to business travel commensurate with Executive's duties hereunder and as
otherwise requested by Employer.

                                   ARTICLE IV.

                        Executive's Restrictive Covenants

         Section 4.1  Confidentiality  Agreement.  Executive  acknowledges  that
Executive has been and will continue to be exposed to  confidential  information
and trade secrets  ("Proprietary  Information")  pertaining to, or arising from,
the business of Employer and/or  Employer's  Affiliates,  that such  Proprietary
Information  is  unique  and  valuable  and  that  Employer  and/or   Employer's
Affiliates would suffer  irreparable injury if this information were divulged to
those  in  competition  with  Employer  or  Employer's  Affiliates.   Therefore,
Executive agrees to keep in strict secrecy and confidence, both during and after
the period of Executive's  employment,  any and all information  which Executive
acquires,  or to which Executive has access,  during  Executive's  employment by
Employer,  that  has not been  publicly  disclosed  by  Employer  or  Employer's
Affiliates,  that is not a  matter  of  common  knowledge  by  their  respective
competitors or that is not required to be disclosed  through legal process.  The
Proprietary  Information covered by this Agreement shall include,  but shall not
be limited to,  information  relating to any  inventions,  processes,  software,
formulae, plans, devices,  compilations of information,  technical data, mailing
lists, management strategies,  business distribution methods, names of suppliers
(of both goods and  services)  and  customers,  names of employees  and terms of
employment,  arrangements entered into with suppliers and customers,  including,
but not limited to, proposed  expansion  plans of Employer,  marketing and other
business and pricing strategies, and trade secrets of Employer and/or Employer's
Affiliates.

         Except  with  prior  approval  of the  Board  or any  Authorized  Board
Designee,  Executive  will not,  either during or after  Executive's  employment
hereunder:  (a) directly or indirectly  disclose any Proprietary  Information to
any person except  authorized  personnel of Employer;  nor, (b) use  Proprietary
Information in any manner other than in furtherance of the business of Employer.
Upon  termination  of  employment,  whether  voluntary  or  involuntary,  within
forty-eight  hours of termination,  Executive will deliver to Employer  (without
retaining  copies  thereof)  all  documents,  records or other  memorializations
including  copies of documents and any notes which Executive has prepared,  that
contain   Proprietary   Information   or  relate  to  Employer's  or  Employer's
Affiliates' business, all other tangible Proprietary  Information in Executive's
possession or control,  and all of Employer's and the Affiliates'  credit cards,
keys, equipment,  vehicles,  supplies and other materials that are in possession
or under Executive's control.

         Section 4.2 Nonsolicitation  Agreement.  During Executive's  employment
hereunder and for a period of two years after Executive ceases to be employed by
Employer,  Executive  shall not,  directly or indirectly,  for  Executive's  own
account or otherwise (i) solicit business from, divert business from, or attempt
to convert to other methods of using the same or similar products or services as
provided by Employer or Employer's  Affiliates,  any client, account or location
of Employer or Employer's Affiliates with which Executive has had any contact as
a result of Executive's employment hereunder;  or (ii) solicit for employment or
employ any employee or former employee of Employer or Employer's Affiliates.

         Section 4.3 Remedies. Executive understands and acknowledges damages at
law alone will be an  insufficient  remedy for Employer and Employer will suffer
irreparable   injury  if  Executive   violates  the  terms  of  this  Agreement.
Accordingly,  Employer,  upon application to a court of competent  jurisdiction,
shall be  entitled  to  injunctive  relief to  enforce  the  provisions  of this
Agreement  in the event of any  breach,  or  threatened  breach,  of its  terms.
Executive  hereby  waives  any  requirement  that  Employer  post  bond or other
security prior to obtaining such  injunctive  relief.  Injunctive  relief may be
sought in addition to any other  available  rights or remedies at law.  Employer
shall  additionally  be  entitled  to  reasonable  attorneys'  fees  incurred in
enforcing the provisions of this Agreement.

                                   ARTICLE V.

                                  Miscellaneous

         Section  5.1  Assignment.  No party to this  Agreement  may assign this
Agreement or any or all of its rights or  obligations  hereunder  without  first
obtaining the written  consent of all other parties  hereto.  Any  assignment in
violation  of the  foregoing  shall be null and void.  Subject to the  preceding
sentences of this  Section,  the terms and  conditions of this  Agreement  shall
inure to the  benefit  of and be  binding  upon the  parties  hereto  and  their
respective heirs, legal representatives,  successors and permitted assigns. This
Agreement  shall not be deemed to  confer  upon any  person  not a party to this
Agreement any rights or remedies  hereunder.  The  provisions of this Section do
not preclude the sale,  transfer or assignment of the ownership interests of any
entity  that is a party to this  Agreement,  although  such a sale,  transfer or
assignment  may  be  expressly  prohibited  or  conditioned  pursuant  to  other
provisions of this Agreement.

     Section 5.2 Amendments. This Agreement cannot be modified or amended except
by a written agreement executed by all parties hereto.

         Section 5.3 Waiver of Provisions;  Remedies  Cumulative.  Any waiver of
any term or condition of this Agreement must be in writing, and signed by all of
the parties  hereto.  The waiver of any term or  condition  hereof  shall not be
construed  as either a  continuing  waiver with respect to the term or condition
waived, or a waiver of any other term or condition hereof. No party hereto shall
by any act  (except by written  instrument  pursuant  to this  Section),  delay,
indulgence,  omission or  otherwise  be deemed to have waived any right,  power,
privilege or remedy  hereunder or to have acquiesced in any default in or breach
of any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising,  on the part of any party hereto, any right, power,  privilege or
remedy  hereunder  shall  operate  as a waiver  thereof.  No single  or  partial
exercise of any right,  power,  privilege or remedy hereunder shall preclude any
other or further  exercise  thereof or the exercise of any other  right,  power,
privilege  or  remedy.  No  remedy  set  forth in this  Agreement  or  otherwise
conferred  upon or reserved to any party shall be  considered  exclusive  of any
other remedy  available to any party,  but the same shall be distinct,  separate
and  cumulative  and may be exercised from time to time as often as occasion may
arise or as may be deemed expedient.

         Section  5.4  Further  Assurances.  At and from time to time  after the
Closing,  each party shall, at the request of another party hereto,  but without
further consideration,  execute and deliver such other instruments and take such
other actions as the requesting  party may  reasonably  request in order to more
effectively  evidence or consummate the transactions or activities  contemplated
hereunder.

         Section  5.5  Entire  Agreement.  This  Agreement  and  the  agreements
contemplated hereby or executed in connection herewith (a) constitute the entire
agreement of the parties hereto  regarding the subject  matter  hereof,  and (b)
supersede all prior  agreements  (including,  without  limitation,  that certain
Executive Employment Agreement dated September 1, 2000) and understandings, both
written and oral, among the parties hereto,  or any of them, with respect to the
subject matter hereof.

         Section 5.6 Severability; Illegality. In the event any state or federal
laws or  regulations,  now  existing  or enacted or  promulgated  after the date
hereof,  are  interpreted  by judicial  decision,  a regulatory  agency or legal
counsel  in such a manner  as to  indicate  that  any  provision  hereof  may be
illegal,  invalid or unenforceable,  such provision shall be fully severable and
this  Agreement  shall be construed and enforced as if such illegal,  invalid or
unenforceable  provision  never  comprised  a part  hereof;  and  the  remaining
provisions  hereof  shall  remain  in full  force  and  effect  and shall not be
affected by the illegal,  invalid or unenforceable provision or by its severance
herefrom.  Furthermore,  in lieu  of  such  illegal,  invalid  or  unenforceable
provision,  there  shall  be added  automatically  as part of this  Agreement  a
provision that (a) preserves the underlying economic and financial  arrangements
between  the  parties  hereto  without  substantial  economic  detriment  to any
particular  party and (b) is as  similar in effect to such  illegal,  invalid or
unenforceable  provision as may be possible and be legal, valid and enforceable.
No party to this Agreement shall claim or assert  illegality as a defense to the
enforcement  of this  Agreement  or any  provision  hereof;  instead,  any  such
purported illegality shall be resolved pursuant to the terms of this Section.

         Section  5.7  GOVERNING   LAW.  THIS   AGREEMENT  AND  THE  RIGHTS  AND
OBLIGATIONS  OF THE  PARTIES  HERETO  SHALL BE  GOVERNED  BY AND  CONSTRUED  AND
ENFORCED IN ACCORDANCE  WITH THE  SUBSTANTIVE  LAWS (BUT NOT THE RULES GOVERNING
CONFLICTS OF LAWS) OF THE STATE OF TEXAS.

         Section 5.8 Language  Construction.  This Agreement shall be construed,
in all cases,  according to its fair meaning, and without regard to the identity
of the person who drafted the various  provisions  contained herein. The parties
acknowledge  that each party and its counsel  have  reviewed  and  revised  this
Agreement  and that the  normal  rule of  construction  to the  effect  that any
ambiguities are to be resolved  against the drafting party shall not be employed
in the interpretation hereof. As used in this Agreement,  "day" or "days" refers
to  calendar  days  unless  otherwise  expressly  stated in each  instance.  The
captions in this  Agreement are for  convenience of reference only and shall not
limit or  otherwise  affect  any of the  terms or  provisions  hereof.  When the
context  requires,  the  gender of all  words  used  herein  shall  include  the
masculine,  feminine  and neuter and the number of all words  shall  include the
singular and plural. Use of the words "herein", "hereof", "hereto",  "hereunder"
and the  like  in this  Agreement  shall  be  construed  as  references  to this
Agreement as a whole and not to any particular Article,  Section or provision of
this Agreement, unless otherwise expressly noted.

         Section 5.9 Notice.  Whenever  this  Agreement  requires or permits any
notice,  request, or demand from one party to another,  the notice,  request, or
demand must be in writing to be  effective  and shall be deemed to be  delivered
and received (a) if personally delivered or if delivered by facsimile or courier
service,  when  actually  received by the party to whom notice is sent or (b) if
delivered by mail (whether  actually  received or not), at the close of business
on the  third  business  day next  following  the day when  placed  in the mail,
postage prepaid, certified or registered,  addressed to the appropriate party or
parties,  at the address of such party set forth below (or at such other address
as such party may designate by written notice to all other parties in accordance
herewith):

     If to Employer:                 Prime Medical Services, Inc.
                                     1301 Capital of Texas Hwy, Suite C-300
                                     Austin, TX  78746
                                     Attention:  Board of Directors
                                     Facsimile Transmission:  (512) 314-4503


     If to Executive:                Kenneth S. Shifrin
                                     15801 Chateau Ave.
                                     Austin, TX  78734
                                     Facsimile Transmission:  (512) 266-7821


         Section 5.10 CHOICE OF FORUM; ATTORNEYS' FEES. THE PARTIES HERETO AGREE
THAT THIS AGREEMENT IS PERFORMABLE IN WHOLE AND IN PART IN TRAVIS COUNTY, TEXAS,
AND SHOULD ANY SUIT,  ACTION OR  PROCEEDING  ARISING  OUT OF THIS  AGREEMENT  BE
INSTITUTED  BY ANY PARTY  HERETO  (OTHER THAN A SUIT,  ACTION OR  PROCEEDING  TO
ENFORCE OR REALIZE UPON ANY FINAL COURT JUDGMENT ARISING OUT OF THIS AGREEMENT),
SUCH SUIT,  ACTION OR PROCEEDING  SHALL BE INSTITUTED ONLY IN A STATE OR FEDERAL
COURT IN TRAVIS COUNTY,  TEXAS.  EACH OF THE PARTIES  HERETO  CONSENTS TO THE IN
PERSONAM  JURISDICTION OF ANY STATE OR FEDERAL COURT IN TRAVIS COUNTY, TEXAS AND
WAIVES ANY OBJECTION TO THE VENUE OF ANY SUCH SUIT,  ACTION OR  PROCEEDING.  THE
PARTIES HERETO RECOGNIZE THAT COURTS OUTSIDE TRAVIS COUNTY,  TEXAS MAY ALSO HAVE
JURISDICTION OVER SUITS,  ACTIONS OR PROCEEDINGS  ARISING OUT OF THIS AGREEMENT,
AND IN THE EVENT THAT ANY PARTY  HERETO SHALL  INSTITUTE A PROCEEDING  INVOLVING
THIS  AGREEMENT  IN A  JURISDICTION  OUTSIDE  TRAVIS  COUNTY,  TEXAS,  THE PARTY
INSTITUTING  SUCH  PROCEEDING  SHALL  INDEMNIFY  ANY OTHER PARTY  HERETO FOR ANY
LOSSES AND EXPENSES THAT MAY RESULT FROM THE BREACH OF THE FOREGOING COVENANT TO
INSTITUTE  SUCH  PROCEEDING  ONLY IN A STATE OR FEDERAL COURT IN TRAVIS  COUNTY,
TEXAS, INCLUDING WITHOUT LIMITATION ANY ADDITIONAL EXPENSES INCURRED AS A RESULT
OF LITIGATING IN ANOTHER  JURISDICTION,  SUCH AS REASONABLE FEES AND EXPENSES OF
LOCAL COUNSEL AND TRAVEL AND LODGING  EXPENSES FOR PARTIES,  WITNESSES,  EXPERTS
AND SUPPORT  PERSONNEL.  THE PREVAILING PARTY IN ANY ACTION TO ENFORCE OR DEFEND
RIGHTS  UNDER  THIS  AGREEMENT  SHALL BE  ENTITLED  TO  RECOVER  ITS  COSTS  AND
REASONABLE ATTORNEYS' FEES IN ADDITION TO ANY OTHER RELIEF GRANTED.

     Section  5.11  Counterparts.  This  Agreement  may be  executed in multiple
counterparts,  each of  which  shall be  deemed  an  original,  and all of which
together shall constitute one and the same instrument.

                            [Signature page follows]


<PAGE>


S-1

                                SIGNATURE PAGE TO

                         EXECUTIVE EMPLOYMENT AGREEMENT

         EXECUTED by Employer and  Executive to be effective for all purposes as
of the Effective Date provided above.

EMPLOYER:                                         PRIME MEDICAL SERVICES, INC.


                                                  By:

                                                  Printed Name:

                                                  Title:

EXECUTIVE:

                                               Printed Name: Kenneth S. Shifrin