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Exhibit 10.7    
  


 
 

EMPLOYMENT AGREEMENT    
  


        This Employment Agreement ("Agreement") is entered into effective as of November 15, 2002, by and between United Surgical Partners
International, Inc., a Delaware corporation ("USPI"), and William H. Wilcox ("Employee"), with reference to the following facts: 


R E C I T A L S  



        A.    USPI desires to employ Employee in the capacities and on the terms and conditions hereinafter set forth and Employee is willing to
serve in such
capacities and on such terms and conditions. 


        B.    This Agreement shall replace any and all existing employment agreements and arrangements between USPI and Employee as of
November 15, 2002. 


        NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, USPI and Employee mutually agree as
follows: 


A G R E E M E N T  


         1.    Employment.    USPI hereby employs Employee as the President of USPI.



        2.    Duties.    Employee shall devote substantially all of his working time,
energies and
skills to USPI's business. Employee shall report to the Chief Executive Officer of USPI and shall have such duties, responsibilities and authority as are set forth in the Bylaws of USPI for the
position of President. Employee agrees to serve USPI diligently and to the best of his ability. 


        3.    Compensation.    



        (a)    Base Salary.    USPI shall pay Employee a Base Salary ("Base Salary") at a rate of
$415,000 per year. In addition, the Board of Directors of USPI shall consider granting increases in such salary based on Employee's performance and the growth and/or profitability of USPI, but it
shall have no obligation to grant any such increases in compensation. Base Salary shall be payable in equal semi-monthly installments on the 15th day and the last working
date of the month, or at such other times and in such installments as may be agreed upon between USPI and Employee. All payments shall be subject to the deduction of payroll taxes and similar
assessments as required by law. 


        (b)    Performance Bonuses.    In addition to the Base Salary, Employee shall be eligible to
receive bonus compensation of up to 100% of the Base Salary based on such performance goals and criteria as the Board of Directors of USPI shall, from time to time, determine. 




        4.    Expenses and Benefits.    USPI agrees to provide Employee with the following
benefits: 



        (a)    Expense Reimbursements.    Employee is authorized to incur reasonable expenses in
connection with the business of USPI, including expenses for entertainment, travel and similar matters. USPI will reimburse Employee for such expenses upon presentation by Employee of such
documentation as USPI shall from time to time require. 


        (b)    Office Services.    USPI will provide Employee with an administrative assistant of his
choice and reasonable office space and services. 


        (c)    Insurance.    Major medical health insurance and disability insurance as currently in
place (as the same may be modified from time to time by USPI for its senior executives). 


        (d)    Employee Benefit Plans.    Participation in any other employee benefit plans now
existing or hereafter adopted by USPI for its employees. 



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        (e)    Other.    Such items and benefits as USPI shall, from time to time, consider necessary
or appropriate to assist Employee in the performance of his duties. 


        (f)    Vacations.    Employee shall be entitled (in addition to the usual public holidays) to
a paid vacation of an aggregate of five weeks in each calendar year. 




        5.    Term; Severance.    The term of this Agreement shall be from the date of this
Agreement
to November 14, 2004, and shall thereafter be automatically renewed for successive two year terms; provided, however, that either party may terminate this Agreement at any time upon at least
90 days prior written notice. In the event of such termination by USPI, Employee shall be entitled to severance pay based on his Base Salary at the time of termination, plus a bonus (payable
monthly on a pro rata basis) at a rate equal to the average annual bonuses earned by Employee for the two calendar years preceding the date of notice of termination, for a period of 24 months
following termination. Such severance pay shall be payable in monthly installments and USPI shall continue the benefits set forth in Sections 4(b) and (c) for the period during which such
severance payments are to be made. In addition, this Agreement shall terminate as provided for in Section 7 or upon the death of Employee, and no severance pay shall be due in the event of such
a termination. 


        6.    Disability.    



        (a)  In
the event that Employee becomes Permanently Disabled (as hereinafter defined) during the term of this Agreement, Employee shall continue in the employ of USPI but his
compensation hereunder shall be reduced to three-fourths of the Base Salary then in effect as set forth in Section 3(a), commencing upon the determination of Employee's Permanent Disability and
continuing thereafter until the first to occur of (i) 24 months or (ii) the death of Employee; and during such period of time, Employee shall not be entitled to payment of
expenses or benefits specified in Section 4 (except for reimbursement of expenses incurred by Employee prior to becoming Permanently Disabled), except that USPI shall continue to provide
Employee with the insurance benefits specified in Section 4(c). The obligation of USPI for continuation of three-fourths of Employee's Base Salary shall be net of payments to Employee from the
disability insurance referred to in Section 4(c). 




        For
purposes of this Agreement, the terms "Permanent Disability" or "Permanently Disabled" shall mean three months of substantially continuous disability. Disability shall be deemed
"substantially continuous" if, as a practical matter, Employee, by reason of his mental or physical health, is unable to sustain reasonably long periods of substantial performance of his duties.
Frequent long illnesses, though different from the preceding illness and though separated by relatively short periods of performance, shall be deemed to be "substantially continuous." Disability shall
be determined in good faith by the
Board of Directors, whose decision shall be final and binding upon Employee. Employee hereby consents to medical examinations by such physicians and medical consultants as USPI shall, from time to
time, require. 


        7.    Termination by USPI for Cause.    USPI shall have the right to terminate
Employee's
employment under this Agreement for "Cause" by an affirmative vote to so terminate by not less than 75% of the members of USPI's Board of Directors, in which event no compensation shall be paid or
other benefits furnished to Employee after termination for Cause. Termination for Cause shall be effective immediately upon notice sent or given to Employee. For purposes of this Agreement, the term
"Cause" shall mean and be strictly limited to: (a) indictment for a crime constituting a felony under state or federal law; (b) conviction of a crime constituting a misdemeanor and
involving an act of moral turpitude, including without limiation fraud, embezzlement and use of illegal drugs; (c) commission of any material act of dishonesty against USPI; or
(d) willful and material breach of this Agreement by Employee. 


        8.    Non-Competition.    Employee recognizes and understands that in performing
the responsibilities of his employment, he will occupy a position of fiduciary trust and confidence, pursuant to which he 


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will develop and acquire experience and knowledge with respect to USPI's business. It is the expressed intent and agreement of Employee and USPI that such knowledge and experience shall be used
exclusively in the furtherance of the interests of USPI and not in any manner which would be detrimental to USPI's interests. Employee further understands and agrees that USPI conducts its business
within a specialized market segment throughout the United States and in portions of Europe, and that it would be detrimental to the interests of USPI if Employee used the knowledge and experience
which he currently possesses or which he acquires pursuant to this employment hereunder for the purpose of directly or indirectly competing with USPI, or for the purpose of aiding other persons or
entities in so competing with USPI. Employee therefore agrees that so long as he is employed by USPI and, if this Agreement is terminated by USPI pursuant to Section 5, for an additional period
equal to the shorter of one year following termination or for the period of time Employee is receiving a salary or severance payments from USPI, unless Employee first secures the written consent of
USPI, Employee will not directly or indirectly invest, engage or participate in or become employed by any entity in direct or indirect competition with USPI's business, which shall include the
ownership and/or operation of outpatient surgical centers and surgical specialty hospitals in the United States and the ownership and/or operation of hospitals in the countries in Europe in which USPI
owns or operates hospitals as of the date of termination. These non-competition provisions shall not be construed to prohibit Employee from being employed in the health care industry
during the applicable period, but rather to permit him to be so employed so long as such employment does not involve Employee's direct or indirect participation in a business which is the same or
similar to USPI's business (as defined above). In the event that the provisions of this Section 8 should ever be deemed to exceed the time or geographic limitations permitted by applicable
laws, then such provisions shall be reformed to the maximum time or geographic limitations permitted by applicable law. 


        9.    Stock Options.    In the event that (a) USPI elects to terminate this
Agreement
pursuant to Section 5, (b) there is a "Change of Control Event" (as defined below) or (c) USPI breaches this Agreement by termination of Employee without the notice required under
Section 5 or without Cause under Section 7, then in each such event, all USPI stock options held by Employee and all restricted stock awards made
to him by USPI (whether issued subject to forfeiture or to be issued when and if they become vested) shall thereupon automatically be amended so as to (i) cause to vest, immediately prior to
the date of such Change in Control Event or such termination of employment, all then unvested stock options and restricted stock awards, and (ii) provide Employee 90 days to exercise
such options (or such greater period as may be provided by the terms of such options). For purposes of the foregoing, the term "Change of Control Event" shall mean (A) a consolidation or merger
of USPI with or into any other corporation (other than a merger which will result in the voting capital stock of USPI outstanding immediately before the effective date of such consolidation or merger
being converted into more than 50% of the voting capital stock of the surviving entity outstanding immediately after such consolidation or merger), (B) a sale of all or substantially all of the
properties and assets of the Company as an entirety in a single transaction or in a series or related transactions to any other "person" or (C) the acquisition of "beneficial ownership" by any
"person" or "group" (other than Welsh, Carson, Anderson & Stowe VII, L.P. or its affiliates) of voting stock of the Company representing more than 50% of the voting power of all outstanding
shares of such voting stock, whether by way of merger of consolidation or otherwise. As used herein, (x) the terms "person" and "group" shall have the meanings set forth in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not applicable, (y) the term "beneficial owner" shall have the meaning set forth in
Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except that a person shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately or only after the passage of time or upon the occurrence of certain events, and (z) any "person" or "group" will
be deemed to beneficially own any voting stock so long as such person or group beneficially owns, directly or indirectly, in the aggregate a majority of the voting stock of a registered holder of such
voting stock. 


        10.    General Provisions.    


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        (a)    Notices.    All notices required or permitted by this Agreement shall be in writing and
may be delivered in person or sent by regular, registered or certified mail or United States Postal Service Express Mail, with postage prepaid, or by other courier service, or by facsimile
transmission, and shall be deemed sufficiently given if served in the manner specified in this Section 10(a). The addresses and facsimile numbers set forth below shall be the parties addressed
and facsimile numbers for purposes for purposes of delivery or mailing of notices: 



	 	 	If to USPI:	 	c/o United Surgical Partners International, Inc.

15305 Dallas Parkway, Suite 1600

Addison, Texas 75001

Attention: Donald E. Steen

                Chief Executive Officer

Fax No.: (972) 267-0084
	

 	
 	

If to Employee:	
 	

William H. Wilcox

9726 Rockbrook Drive

Dallas, Texas 75220

Fax No.: (972)             





The
parties may change addresses and facsimile numbers noted above through written notice in compliance with this Section 10(a). Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given when actually received by the addressee, as shown on the receipt card which must be signed by a representative of the addressee. If sent by regular mail, the notice
shall be deemed given after the notice is addressed, mailed with postage prepaid and when actually received by the addressee. Notices delivered by United States Express Mail or other courier service
shall be deemed given when actually received by the addressee as shown by the signature of an authorized representative of the addressee on the log or other documentation maintained by the United
States Postal Service or courier to show proof of delivery. If any notice is transmitted by facsimile transmission or similar means, the notice shall be deemed served or delivered upon telephone
confirmation of receipt of the transmission. 



        (b)    Choice of Law.    This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas, excluding principles of conflict of laws. 


        (c)    Integration; Modification and Waiver.    This Agreement constitutes the entire
understanding of the parties hereto relating to the subject matter hereof, supersedes any and all other agreements, whether oral or in writing, between the parties hereto and their affiliates with
respect to the employment of Employee from and after the date hereof, and contains all covenants and agreements between the parties hereto relating to such employment in any manner whatsoever;
provided, however, that except as expressly provided herein, this Agreement shall not affect any stock option agreements, indemnity agreements or agreements relating to Employee's purchase or
ownership of USPI securities to which Employee is now or hereafter a party or the rights of the parties under Employee's prior Employment Agreement, dated as of January 1, 2001, that arose
prior to the date of this Agreement. This Agreement shall not be amended, modified or revised in any respect, except by a writing signed by USPI and Employee. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, and no waiver shall constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver. 


        (d)    Severability.    If any provision of this Agreement shall be determined by a court or
governmental agency of competent jurisdiction to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect the remainder of this Agreement, which shall
remain in full force and effect and be enforced in accordance with its remaining enforceable terms. 



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        (e)    Assignment.    Because of the personal nature of the services to be rendered hereunder,
the obligations of Employee under this Agreement may not be delegated or assigned in whole or in part without the prior written consent of USPI (which consent may be withheld in its sole discretion).
However, subject to the foregoing limitation, this Agreement shall be binding upon, and shall insure to the benefit of, the parties hereto and their respective heirs, devisees, executors,
administrators, trustees, legal representatives, successors, transferees and assigns. 


        (f)    Attorneys' Fees.    In any action or proceeding at law or in equity, including but not
limited to arbitration, brought to enforce or construe any provisions or rights under this Agreement, the unsuccessful party or parties to such litigation or arbitration, as determined by the
appropriate court or arbitrator pursuant to a final judgment or decree, shall pay the successful party or parties all costs, expenses and reasonable attorneys' fees incurred by such successful party
or parties (including but not limited to such costs, expenses and fees in connection with any appeals) and, if such successful party or parties shall recover judgment in any such action or proceeding,
such costs, expenses and attorneys' fees shall be included as part of such judgment. 


        (g)    Survival of Certain Provisions.    The provisions of Sections 4(a) (as to expenses
incurred prior to termination), 5, 8 and 9 shall survive the expiration or other termination of this Agreement. 


        (h)    Headings and Captions.    Headings and captions are included in this Agreement for
purposes of convenience only and are not a part of this Agreement. 


        (i)    Miscellaneous.    Any term used in the plural shall refer to all members of the
relevant class and any term used in the singular shall refer to any one or more of the members of the relevant class. References in this Agreement to articles, sections, paragraphs and exhibits are to
articles, sections, paragraphs and exhibits to this Agreement. The terms "herein," "hereof," "hereto," "hereunder" and other terms similar to such terms refer to this Agreement as a whole and not
merely to the specific article, section, paragraph or clause where such terms may appear. 


        (j)    Counterparts and Facsimile Signatures.    Separate copies of this Agreement may be
signed by the parties hereto, with the same effect as though all of the parties had signed one copy of this Agreement. Signatures transmitted by facsimile shall be accepted as original signatures. 




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



	USPI:	 	UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
	    	 	 	 
	

 	
 	

By:	

/s/  DONALD E. STEEN      
 Donald E. Steen

Chief Executive Officer
	
EMPLOYEE:	
 	

 	

/s/  WILLIAM H. WILCOX      
 William H. Wilcox




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Exhibit 10.7


EMPLOYMENT AGREEMENT