EMPLOYMENT AGREEMENT

 

                                                                   EXHIBIT 10.44
 
                   FORM OF PARACELSUS HEALTHCARE CORPORATION
                              EMPLOYMENT AGREEMENT
 
    AGREEMENT,  dated  as  of  July  17,  1996,  between  Paracelsus  Healthcare
Corporation, a California corporation (the "Company"), and R. J. Messenger  (the
"Executive").
 
    In consideration of the premises and the respective covenants and agreements
of  the parties herein contained, and intending  to be legally bound hereby, the
parties agree as follows:
 
    1.  EMPLOYMENT.  The Company hereby  agrees to employ the Executive and  the
Executive  hereby agrees to serve  the Company, on the  terms and conditions set
forth herein.  In addition,  the Executive  and the  Company hereby  agree  that
subject  to and effective as  of the closing of  the proposed merger transaction
among the  Company,  Champion  Healthcare Corporation,  a  Delaware  corporation
("Champion"), and PC Merger Sub, Inc., a Delaware corporation and a wholly owned
subsidiary  of the  Company ("PC  Merger Sub"),  whereby Champion  will become a
wholly owned  subsidiary of  the Company  (the "Merger"),  this Agreement  shall
supersede  that certain employment agreement (the "Prior Agreement") between the
Company and the Executive, dated as of  November 20, 1983, as amended from  time
to time, and the Prior Agreement shall thereupon automatically terminate without
further obligation by either Executive or the Company.
 
    2.   TERM  OF EMPLOYMENT; DUTIES.   From  the period commencing  on the date
hereof and ending  immediately prior to  the Effective Time  (as defined in  the
Agreement  and Plan of Merger  by and among the  Company, Champion and PC Merger
Sub dated as of April 12, 1996, as  amended May 29, 1996, and as such  agreement
may  be amended from time  to time (the "Merger  Agreement")), the employment of
the Executive shall be  governed by the  terms and conditions  set forth in  the
Prior  Agreement.  The  term of  this  Agreement (the  "Term"),  and Executive's
employment with the Company hereunder, shall commence at the Effective Time and,
unless earlier terminated in  accordance with the  terms hereof, shall  continue
until  the fifth  anniversary of  the Effective Time  (such initial  term of the
Agreement referred to as the "Initial  Term"); PROVIDED, HOWEVER, that the  Term
shall automatically be renewed for an additional period of five years (each such
period,  a "Renewal Period")  at the end of  the Initial Term and  at the end of
each Renewal Period, if any, unless either the Company or the Executive provides
at least one year's notice to the other of its intention not to renew the  Term;
and  PROVIDED, FURTHER, that if the Merger Agreement is terminated in accordance
with its terms  prior to the  Effective Time or  if the Merger  is abandoned  or
otherwise  does  not close,  (x)  this Agreement  shall  automatically terminate
without further obligation by either party hereto, (y) the terms and  conditions
set  forth  in this  Agreement shall  not apply  and (z)  the employment  of the
Executive shall continue to be governed by the terms and conditions set forth in
the Prior Agreement.
 
    During the Term,  the Executive  shall be  employed as  the Chief  Executive
Officer  of the  Company serving at  the will of  the Board of  Directors of the
Company (the "Board") with, subject to the express terms and conditions  hereof,
the  traditional  duties,  responsibilities  and  authority  of  such  office in
companies similar in  size to the  Company. The Executive  agrees that he  shall
perform  his duties hereunder faithfully and to the best of his abilities and in
furtherance of the business of the Company and its subsidiaries and shall devote
substantially all of his business time, energy and attention to the business  of
the  Company  and  its  subsidiaries; PROVIDED,  HOWEVER,  that  subject  to the
provisions of Section 10, Executive  may devote a portion  of his time while  an
employee  of  the  Company  to  international  commitments  and  other personal,
philanthropic and business affairs and  interests (including but not limited  to
businesses  providing security,  catering, cleaning  and related  services on an
international basis to commercial establishments), to the extent such activities
do not materially interfere with the  performance of his duties and  obligations
to  the Company; and  PROVIDED, FURTHER, that Executive  may also attend various
industry board and  other meetings of  professional societies of  which he is  a
member,  consistent with his past practice while  an employee of the Company. In
addition, (i) for so long as Executive is a Shareholder Director (as defined  in
the Shareholder Agreement of the

Company  to  be entered  into in  connection with  the Merger  (the "Shareholder
Agreement")), Executive shall serve as the Vice Chairman of the Board, and  (ii)
for so long as Executive shall serve as a member of the Board, he shall serve as
Chairman of the Executive Committee of the Board (the "Executive Committee").
 
    The  Executive agrees to use his  authorities as Chief Executive Officer, as
Vice Chairman of the Board and as a member of the Executive Committee to  manage
and  cause  others  to manage  the  Company  in accordance  with  the management
guidelines set forth  on Exhibit A  hereto; PROVIDED, HOWEVER,  that nothing  in
this  Section shall require the Executive to  violate or breach his duties under
the law of the  state of incorporation  of the Company  or any other  applicable
laws.  The Company agrees to use its best  efforts to manage and cause others to
manage the Company  in accordance with  the management guidelines  set forth  in
Exhibit A hereto.
 
    3.  COMPENSATION AND RELATED MATTERS.
 
        (a)    BASE SALARY.    During the  Term, the  Company  shall pay  to the
    Executive an annual base  salary (the "Base Salary")  at an initial rate  of
    $750,000  per year, payable in accordance  with the Company's normal payroll
    practices or as  the Company  and Executive  may otherwise  agree. The  Base
    Salary  shall be reviewed  by the Company  annually and shall  be subject to
    discretionary increase by the  Company from time to  time, but shall not  be
    decreased  from the rate in effect at any  time and from time to time during
    the Term.
 
        (b)    ANNUAL  PERFORMANCE  BONUS.    Executive  shall  be  entitled  to
    participate  in  the  Paracelsus  Healthcare  Corporation  Executive Officer
    Performance Bonus Plan or any similar or successor annual bonus plan of  the
    Company  (the "Performance Bonus Plan") and to receive an annual performance
    bonus upon the  achievement of  one or  more annual  performance goals  (the
    "Performance  Goals") in accordance with the  terms of the Performance Bonus
    Plan; PROVIDED, that Executive's annual  target bonus under the  Performance
    Bonus  Plan (the "Annual Target  Bonus") shall not be  less than 100% of the
    Base Salary in effect at the time  the Performance Goals for such plan  year
    are established.
 
        (c)     LONG-TERM  INCENTIVE.    The  Executive  shall  be  eligible  to
    participate in  any long-term  incentive  compensation and/or  stock  option
    plans  maintained from time to time by the Company. In addition, pursuant to
    prior action  of the  Stock Option  Committee of  the Board,  Executive  has
    previously  been granted  (i) options (the  "Value Options")  to purchase an
    aggregate of 1,000,000 shares of Company  common stock, no stated par  value
    (the  "Common Stock"), at an exercise price of $.01 per share with a term of
    10 years from the date of grant and (ii) an option (the "Market Option")  to
    purchase an additional 1,000,000 shares of Common Stock at an exercise price
    equal  to the  fair market  value (as  defined in  the Paracelsus Healthcare
    Corporation 1996 Stock Incentive Plan (the "1996 Stock Incentive Plan"))  of
    the  Common Stock on the date of the  Effective Time with a term of 10 years
    from the date of grant. The Value Options will be fully vested on grant  and
    will  become fully exercisable at the  Effective Time, and the Market Option
    will generally vest and become  exercisable in equal annual installments  of
    25% on each of the first four anniversaries of the Effective Time; PROVIDED,
    that neither the Value Options nor the Market Option will become exercisable
    in  whole or  in part  in the  event the  Merger Agreement  is terminated in
    accordance with its terms prior  to the Effective Time  or if the Merger  is
    abandoned or otherwise does not close; and PROVIDED, FURTHER, that the Value
    Options and the Market Option shall each be subject to the terms of the 1996
    Stock  Incentive Plan and the stock option  agreements to be entered into in
    connection with the grant of such options.
 
        (d)  BENEFITS, PERQUISITES AND EXPENSES.  During the Term, the Executive
    shall be  eligible to  participate in  employee benefit  and fringe  benefit
    plans  and programs  generally available  to the  executive officers  of the
    Company and such  additional benefits  as the Board  may from  time to  time
    provide.  In addition, Executive  shall be entitled  to receive the personal
    benefits described  in Exhibit  B  hereto. Executive  shall be  entitled  to
    reimbursement  for  business expenses,  including travel  and entertainment;
    PROVIDED, that  such  reimbursement  shall  be  limited  to  reasonable  and

    necessary  expenses incurred by Executive in connection with the performance
    of duties on behalf of  the Company subject to:  (i) timely submission of  a
    properly  executed Company  expense report  form accompanied  by appropriate
    supporting documentation,  and (ii)  compliance  with Company  policies  and
    procedures governing business expense reimbursement and reporting based upon
    principles  and guidelines established by the  Audit Committee of the Board,
    including periodic audits by  the Internal Audit  Department of the  Company
    and/or  the Audit  Committee of the  Board; and PROVIDED,  FURTHER, that the
    Company shall  reimburse  Executive  for  reasonable  expenses  incurred  by
    Executive's spouse when traveling with Executive on Company business.
 
        (e)     RETIREMENT  BENEFITS.    The  Executive  shall  be  entitled  to
    participate in the Paracelsus Healthcare Corporation Supplemental  Executive
    Retirement  Plan or any  similar or successor  plan (the "SERP")  and in any
    tax-qualified and any other  supplemental pension plans generally  available
    to  the executive officers  of the Company.  The Company shall  not take any
    action, whether by amendment of the  SERP or otherwise, to adversely  affect
    Executive's  accrued  benefits and  other rights  under the  SERP as  of the
    Effective Time.
 
    4.  TERMINATION  OF EXECUTIVE.   Prior  to the  expiration of  the Term  and
subject  to the payment of any amounts required under Section 5, the Executive's
employment with the Company may be terminated  (a) by the Company for Cause  (as
defined  herein) or without  Cause, PROVIDED that  no less than  80% of the then
members of  the Board  (excluding, for  the purposes  of such  calculation,  the
Executive)  and no less than 2/3 of the Independent Directors (as defined in the
Shareholder Agreement) have approved such termination, (b) by the Executive  for
or  without Good Reason  (as defined herein),  (c) by reason  of the Executive's
death or Disability (as defined herein) or (d) by the mutual written consent  of
the parties hereto. For purposes of this Agreement:
 
        (i)  "Cause" means (A) acts of embezzlement, theft and fraud established
    by a  preponderance of  the evidence;  (B) actions  which have  had or  will
    likely  have a material adverse  financial effect on the  Company as a whole
    for an extended period of time, where appropriate evidence exists that  such
    actions  are directly attributable to the (I) gross management negligence or
    repeated ineptitude of the Executive  and/or (II) deliberate refusal of  the
    Executive  to  follow  the  instructions or  directions  of  the  Board; (C)
    conviction of  or a  plea of  guilty or  NOLO CONTENDERE  to a  felony;  (D)
    violation of the noncompete or confidentiality provisions of this Agreement,
    PROVIDED,  that no such violation will be deemed to have occurred if, within
    30  days  following  receipt  by  Executive  of  a  notice  from  the  Board
    identifying  the violation, the  Executive (I) cures  the violation and (II)
    establishes that the violation was  unintentional and not reasonably  likely
    to  result  in  harm  to  the  Company,  in  each  case  to  the  reasonable
    satisfaction of the Board; (E)  material incapacitation or repeated  absence
    from  work due  to reckless  and self-abusive  behavior or  conduct, such as
    alcoholism and drug abuse, which  renders Executive incapable of  performing
    his  duties; PROVIDED, that  physical or mental disability  due to injury or
    disease shall  not  be  grounds  for termination  for  Cause;  (F)  material
    repeated  incompetence in performing  the duties of  the Executive's office,
    PROVIDED, that such incompetence is: (I) supported by written  documentation
    of  such incompetence, (II)  occurs after the  Executive has been previously
    counseled by the Board both orally  and in writing with respect to  specific
    examples  of  such incompetence  and has  been  provided the  opportunity to
    respond in kind, and (III)  determined to be incurable and  to be of such  a
    nature as to have had or which would have been reasonably likely at the time
    of  such commission to  have a material  adverse effect on  the Company as a
    whole; or (G) a  material violation by the  Executive of the provisions  set
    forth in Exhibit A hereto; PROVIDED, that the Company provides the Executive
    with  notice  of such  violation within  30  days of  its discovery  of such
    violation and the  Executive fails  to cure  such breach  to the  reasonable
    satisfaction of the Board within 10 days of receipt of such notice.
 
        For  purposes  of  this  Agreement,  the Board  shall  have  60  days to
    terminate the Executive  for Cause  following the  date on  which the  Board
    discovers    the   existence   of   a    specific   set   of   facts   that,

    in the aggregate, then  constitute Cause, after which  period no Cause  with
    respect  to such specific set  of facts shall be  deemed to exist; PROVIDED,
    that the repetition or reoccurrence  of the same or  a similar set of  facts
    shall constitute a separate ground for termination for Cause.
 
        (ii)  "Disability"  means  the Executive's  absence  from  the full-time
    performance of his duties with the Company for one hundred eighty (180) days
    or more  within any  period of  12 consecutive  months as  a result  of  the
    Executive's  incapacity due  to mental  or physical  illness; PROVIDED, that
    during any  period prior  to the  termination of  Executive's employment  by
    reason  of  Disability  in  which Executive  is  absent  from  the full-time
    performance of his duties  with the Company due  to Disability, the  Company
    shall continue to pay Executive his Base Salary at the rate in effect at the
    commencement of such period of Disability;
 
        (iii)  "Good  Reason"  means, without  the  Executive's  express written
    consent, the occurrence of any of the following events:
 
           (A) a reduction  by the  Company in  the Executive's  Base Salary  or
       Annual Target Bonus in effect from time to time; (B) a material reduction
       in  the  aggregate  level  of participation  in  and/or  compensation and
       benefit opportunities under all  other compensation and employee  benefit
       plans  in which Executive  is entitled to participate  from time to time;
       PROVIDED,  HOWEVER,  that  changes  affecting  the  participation  in  or
       benefits  under such  plans (other than  the Performance  Bonus Plan, the
       SERP and the benefits described in  Exhibit B) with respect to  similarly
       situated  executives  of the  Company  shall not  constitute  Good Reason
       hereunder; (C) a reduction in the Executive's titles, duties or authority
       with the Company or  a material adverse  change in Executive's  reporting
       relationships;  (D) notification by  the Company of  its intention not to
       renew this Agreement  pursuant to the  provisions of Section  2; (E)  the
       failure  of the Executive to be nominated  for election to and elected to
       serve as a member  of the Board or,  for so long as  he is a  Shareholder
       Director,  to appointed as Vice Chairman of  the Board, or for so long as
       he is a member of the Board, to be appointed as Chairman of the Executive
       Committee; (F)  the  termination of  the  Executive's employment  by  the
       Executive  for any reason within 12  months following a Change in Control
       (as defined  herein); or  (G)  failure of  the  Company, Dr.  Manfred  G.
       Krukemeyer  or Mr. Charles R. Miller to comply with any of the applicable
       provisions set forth in Exhibit A hereto, without regard to whether  such
       terms  are enforceable, which is not cured by the Company, Dr. Krukemeyer
       or Mr. Miller, as applicable, within 30  days of its or his receipt of  a
       notice  specifying the manner in which the Company, Dr. Krukemeyer and/or
       Mr. Miller  is  failing or  has  failed  to comply  with  the  applicable
       provisions set forth in Exhibit A hereto.
 
        (iv)  "Change  in  Control"  means  the occurrence  of  any  one  of the
    following events:
 
           (A) any "person" (as such term  is defined in Section 3(a)(9) of  the
       Securities  Exchange  Act of  1934 (the  "Exchange Act")  and as  used in
       Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes an  Acquiring
       Person  (as such term is defined  in the Company's Shareholder Protection
       Rights Agreement to be adopted at the Effective Time) or any person  that
       is  not bound by  the Shareholder Agreement  becomes the beneficial owner
       (as  defined  in  Rule  13d-3  under  the  Exchange  Act),  directly   or
       indirectly,  of securities of the Company representing 25% or more of the
       undiluted total voting power of the Company's then outstanding securities
       eligible to vote for the election  of members of the Board (the  "Company
       Voting  Securities"); PROVIDED, HOWEVER,  that no event  described in the
       immediately preceding clause shall  be deemed to  constitute a Change  in
       Control  by virtue of any of the following: (I) an acquisition of Company
       Voting Securities by the  Company and/or one or  more direct or  indirect
       majority-owned  subsidiaries  of  the  Company;  (II)  an  acquisition of
       Company Voting  Securities  by any  employee  benefit plan  sponsored  or
       maintained  by the Company or any  corporation controlled by the Company;
       (III) an acquisition by any underwriter temporarily

       holding securities pursuant to  an offering of  such securities; or  (IV)
       any  acquisition by the Executive or any "group" (as such term is defined
       in Rule 3d-5 under the Exchange Act) of persons including the  Executive;
       or
 
           (B)  individuals who, at  the beginning of  any period of twenty-four
       (24) consecutive  months, constitute  the Board  (the "Incumbent  Board")
       cease for any reason to constitute at least a majority thereof; PROVIDED,
       HOWEVER,  that any person becoming a director subsequent to the beginning
       of such twenty-four (24) month period, whose election, or nomination  for
       election,  by the Company's  shareholders was approved  by either (i) the
       Board consistent with the terms of the Shareholder Agreement, during  the
       period the Shareholder Agreement is in effect, or (ii) a vote of at least
       75% of the directors comprising the Incumbent Board (either by a specific
       vote  or by approval of the proxy  statement of the Company in which such
       person is named  as a  nominee for  director, without  objection to  such
       nomination)  shall be, for purposes of  this paragraph (B), considered as
       though such  person  were a  member  of the  Incumbent  Board;  PROVIDED,
       FURTHER,  that no individual initially elected or nominated as a director
       of the Company as  a result of an  actual or threatened election  contest
       with  respect to directors or any other actual or threatened solicitation
       of proxies or consents by or on behalf of any person other than the Board
       shall be deemed to be a member of the Incumbent Board; or
 
           (C) there is consummated a merger or consolidation of the Company  or
       a  subsidiary thereof  with or  into any  other corporation  other than a
       merger or consolidation which would result  in the holders of the  voting
       securities  of the Company outstanding  immediately prior thereto holding
       securities which, in  combination with  the ownership of  any trustee  or
       other  fiduciary holding securities under an employee benefit plan of the
       Company, represent  immediately after  such  merger or  consolidation  at
       least  60% of  the combined voting  power of the  then outstanding voting
       securities of either the Company or the other entity which survives  such
       merger or consolidation or any parent of such other entity; or
 
           (D)  the stockholders of  the Company approve (i)  a plan of complete
       liquidation or dissolution of  the Company or (ii)  an agreement for  the
       sale  or  disposition by  the  Company of  all  or substantially  all the
       Company's assets.
 
    5.  PAYMENTS UPON TERMINATION OF EXECUTIVE.
 
        (a) If the employment of the Executive shall be terminated other than by
    reason of death or Disability (i) by  the Company (other than for Cause)  or
    (ii) by the Executive for Good Reason, then the Company shall pay or provide
    to the Executive (or the Executive's beneficiary or estate):
 
           (1) within thirty (30) days following the date of such termination of
       employment  ("Termination Date"), a lump-sum cash amount equal to the sum
       of (i) the Executive's unpaid  Base Salary through the Termination  Date;
       (ii) any accrued but unpaid annual bonus under the Performance Bonus Plan
       in respect of the annual bonus period preceding the bonus period in which
       the  Termination  Date  occurs; (iii)  any  unpaid  reimbursable business
       expenses properly incurred through the Termination Date; and (iv) a bonus
       payment equal  to the  Executive's Annual  Target Bonus  in the  year  of
       termination,  multiplied  by a  fraction the  numerator  of which  is the
       number of months in the bonus year of termination in which the  Executive
       has worked at least one day and the denominator of which is 12;
 
           (2)  within  thirty  (30)  days  following  the  Termination  Date, a
       lump-sum cash amount  equal to the  greater of (A)  the Executive's  then
       Base  Salary payable over the remainder of the Term plus a bonus equal to
       the Executive's Annual Target Bonus in the year of termination multiplied
       by a fraction  the numerator of  which is the  number of complete  months
       remaining  in the  Term and the  denominator of  which is 12,  or (B) 3.0
       times the sum of: (i)  the Executive's annual rate  of Base Salary as  of
       the  Termination Date plus (ii)  the Annual Target Bonus  for the year in
       which the Termination Date  occurs (in each  such case, Executive's  Base

       Salary  and  Annual Target  Bonus  being determined  without  taking into
       account any  reductions  thereto  constituting  Good  Reason);  PROVIDED,
       HOWEVER,  that  the  Executive shall  not  be entitled  to  any severance
       benefits from the Company or under any Company severance plan, policy  or
       arrangement other than as specified in this Agreement;
 
           (3)  for a period terminating on  the earlier of (A) the commencement
       of the provision of substantially  equivalent benefits by a new  employer
       or (B) the later of (I) the last day of the Term, or (II) thirty-six (36)
       months following the Termination Date, the Company shall continue to keep
       in  full force and effect (or otherwise provide) all policies of medical,
       accident, disability and life insurance with respect to the Executive and
       his dependents  with  substantially  the same  level  of  coverage,  upon
       substantially  the  same terms  and otherwise  substantially to  the same
       extent as such policies  shall have been in  effect immediately prior  to
       the  Termination Date, and, as applicable,  the Company and the Executive
       shall share the costs of the  continuation of such insurance coverage  in
       the  same proportion as  such costs were shared  immediately prior to the
       date of termination;
 
           (4) for purposes of determining final average compensation (or making
       any  similar  calculation)  and  years   of  service  (for  purposes   of
       eligibility,  vesting  and benefit  accrual)  under any  tax-qualified or
       supplemental  defined   benefit   retirement  plan   (including   without
       limitation the SERP), Executive shall be deemed to have remained employed
       by  the Company hereunder until the end  of the Term and to have received
       his then current Base Salary and  Annual Target Bonus through the end  of
       the  Term; PROVIDED, that  to the extent such  benefits cannot be accrued
       under and paid from any  tax-qualified pension plan, such benefits  shall
       be accrued under and paid from the SERP or other supplemental plan.
 
           (5)  all options to purchase Common Stock held by the Executive shall
       immediately  become  fully  vested  and  exercisable  and  shall   remain
       exercisable until the earlier of (A) the date that is 24 months following
       the  Termination Date and (B)  the expiration of the  stated term of such
       options; PROVIDED, that the Value Options shall remain exercisable  until
       expiration of their stated term; and
 
        (b) If the employment of the Executive shall be terminated (i) by reason
    of the Executive's death or Disability, (ii) by the Company for Cause, (iii)
    by  the Executive without Good Reason, or (iv) by the mutual written consent
    of the parties hereto (each a "Nonqualifying Termination"), then the Company
    shall pay to the Executive (or the Executive's beneficiary or estate) within
    thirty (30) days following the Termination Date a lump-sum cash amount equal
    to the sum  of the Executive's  unpaid Base Salary  through the  Termination
    Date  plus any bonus payments  which have been earned  or become payable, to
    the extent  not  theretofore paid,  plus  any unpaid  reimbursable  business
    expenses  properly  incurred  through  the  Termination  Date.  In addition,
    Executive (or the Executive's beneficiary or estate) shall have no less than
    ninety days  following  the termination  of  his employment  pursuant  to  a
    Nonqualifying  Termination to exercise any outstanding options to the extent
    vested and exercisable as of the Termination Date; PROVIDED, that the  Value
    Options shall remain exercisable until the expiration of their stated term.
 
    6.  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
 
        (a)  Notwithstanding anything in this Agreement  to the contrary, in the
    event that any payment or distribution  by the Company, by any affiliate  of
    the  Company or by any person whose actions result in a Change in Control of
    the Company (to the extent the Company approves of the arrangements pursuant
    to which the payment by such person is made to the Executive) to or for  the
    benefit  of  the  Executive  (whether  paid  or  payable  or  distributed or
    distributable pursuant  to the  terms of  this Agreement  or otherwise,  but
    determined  without regard  to any  additional payments  required under this
    Section 6)  (a "Payment")  would be  subject to  the excise  tax imposed  by
    Section  4999 of the Code, or any  interest or penalties are incurred by the
    Executive with respect to  such excise tax (such  excise tax, together  with
    any such interest and penalties, are hereinafter collectively referred to as
    the   "Excise   Tax"),   then   the   Executive   shall   be   entitled   to

    receive an additional payment (a "Gross-Up Payment") in an amount such that,
    after payment  by the  Executive of  all taxes  (including any  interest  or
    penalties imposed with respect to such taxes) including, without limitation,
    any  income and employment  taxes and Excise Tax,  imposed upon the Gross-Up
    Payment but before deduction for any federal, state or local income or other
    tax upon the Payments, the Executive will  retain a net amount equal to  the
    sum  of (i)  the Payments  and (ii) an  amount equal  to the  product of any
    deductions (or portions thereof) disallowed because of the inclusion of  the
    Gross-Up Payment in the Executive's adjusted gross income for federal income
    tax  purposes and  the highest  applicable marginal  rate of  federal income
    taxation for the calendar year in which the Gross-Up Payment is to be  made.
    For  purposes  of  determining  the  amount  of  the  Gross-Up  Payment, the
    Executive shall be deemed to (1) pay applicable federal income taxes at  the
    highest  applicable  marginal rates  of  federal income  taxation (including
    surcharges) for the  calendar year in  which the Gross-Up  Payment is to  be
    made,  (2)  pay  applicable state  and  local  income taxes  at  the highest
    applicable marginal rate of taxation (including surcharges) 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 and  (3) have otherwise allowable deductions  for
    federal  income tax purposes  at least equal to  those disallowed because of
    the inclusion  of the  Gross-Up Payment  in the  Executive's adjusted  gross
    income.
 
        (b)  Subject  to  the  provisions of  Section  6(a),  all determinations
    required to  be made  under this  Section 6,  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 the public accounting firm that is retained by the Company as of the date
    immediately prior to  the Change  in Control (the  "Accounting Firm")  which
    shall  provide detailed supporting calculations both  to the Company and the
    Executive within fifteen (15)  business days of the  receipt of notice  from
    the  Company or the Executive that there has been a Payment, or such earlier
    time as is requested by the Company (collectively, the "Determination").  In
    the  event that the Accounting Firm is  serving as accountant or auditor for
    the individual,  entity  or  group  effecting the  Change  in  Control,  the
    Executive  may appoint another nationally  recognized public accounting firm
    reasonably acceptable to  the Company  to make  the determinations  required
    hereunder (which accounting firm shall then be referred to as the Accounting
    Firm  hereunder). All  reasonable fees and  expenses of  the Accounting Firm
    shall be borne  solely by  the Company and,  subject to  applicable law  and
    obligations  to the Company's stockholders, the Company shall enter into any
    agreement reasonably  requested by  the Accounting  Firm that  is  generally
    recognized  as standard in  connection with the  performance of the services
    hereunder. The Gross-Up  Payment under this  Section 6 with  respect to  any
    Payment  shall be made no later than  thirty (30) days following the date of
    such Payment.  If the  Accounting  Firm determines  that  no Excise  Tax  is
    payable  by the  Executive, it  shall furnish  the Executive  with a written
    opinion to such effect, and to the effect that failure to report the  Excise
    Tax,  if any, on the Executive's applicable federal income tax return should
    not result  in  the imposition  of  a  negligence or  similar  penalty.  The
    Determination  by the Accounting Firm shall  be binding upon the Company and
    the Executive. As a result of uncertainty in the application of Section 4999
    of the Code at the time of  the Determination, it is possible that  Gross-Up
    Payments  which will not have been made by the Company should have been made
    ("Underpayment") or Gross-Up Payments are  made by the Company which  should
    not  have  been  made  ("Overpayment"),  consistent  with  the  calculations
    required to be made hereunder. In the event that the Executive thereafter is
    required to make payment of any  additional Excise Tax, the Accounting  Firm
    shall  determine the  amount of the  Underpayment that has  occurred and any
    such Underpayment (together with  interest at the  rate provided in  Section
    1274(b)(2)(B)  of the Code) shall be promptly  paid by the Company to or for
    the benefit  of the  Executive. In  the  event the  amount of  the  Gross-Up
    Payment  exceeds the  amount necessary  to reimburse  the Executive  for his
    Excise  Tax,  the  Accounting  Firm  shall  determine  the  amount  of   the
    Overpayment  that  has been  made and  any  such Overpayment  (together with
    interest at the rate  provided in Section 1274(b)(2)  of the Code) shall  be
    promptly paid by the Executive to or for

    the benefit of the Company. The Executive shall cooperate, to the extent his
    reasonable  expenses in connection therewith  are reimbursed by the Company,
    with any reasonable requests by the Company in connection with any  contests
    or  disputes with the Internal Revenue Service in connection with the Excise
    Tax.
 
    7.  WITHHOLDING TAXES.   The Company shall have  the right to withhold  from
any  and  all payments  due  to the  Executive  (or his  beneficiary  or estate)
hereunder all taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
 
    8.  SUCCESSORS; BINDING AGREEMENT.
 
        (a) This Agreement is personal in nature and none of the parties  hereto
    shall,  without the consent of the other, assign, or transfer this Agreement
    or any rights or obligations hereunder;  PROVIDED, that in the event of  the
    merger,  consolidation, transfer or sale of  substantially all of the assets
    of the Company  with or to  any other individual  or entity, this  Agreement
    shall,  subject to the provisions  hereof, be binding upon  and inure to the
    benefit of such successor and such successor shall discharge and perform all
    the promises, covenants,  duties and obligations  of the Company  hereunder,
    and all references herein to the "Company" shall refer to such successor.
 
        (b)  This Agreement shall inure to the  benefit of and be enforceable by
    the   Executive's    personal   or    legal   representatives,    executors,
    administrators,  successors, heirs, distributees,  devisees and legatees. If
    the Executive shall die  while any amounts remain  payable to the  Executive
    hereunder, all such amounts, unless otherwise provided herein, shall be paid
    in  accordance with the  terms of this  Agreement to such  person or persons
    appointed in writing  by the  Executive to receive  such amounts  or, if  no
    person is so appointed, to the Executive's estate.
 
    9.  RESOLUTION OF DISPUTES; LEGAL FEES; NO MITIGATION.
 
        (a)  Except as  provided in Sections  10 and 11,  all disputes hereunder
    shall be settled by final, binding arbitration, conducted before a panel  of
    three  (3) arbitrators  in California  in accordance  with the  rules of the
    American Arbitration Association then in effect. Judgment on the arbitration
    award may be  entered in any  court having jurisdiction.  The Company  shall
    bear the expenses of such arbitration.
 
        (b) If any contest or dispute shall arise under this Agreement involving
    termination  of the Executive's employment with the Company or involving the
    failure or refusal of  the Company to perform  fully in accordance with  the
    terms  hereof, the Company  shall advance and reimburse  the Executive, on a
    current basis,  all  legal  fees  and expenses,  if  any,  incurred  by  the
    Executive  in connection  with such contest  or dispute;  PROVIDED, that the
    Executive agrees to return any advanced or reimbursed expenses to the extent
    the arbitrators (or the court, in the case of a dispute described in Section
    10 or 11) determine that the Company has prevailed as to the material issues
    raised in determination of the dispute.
 
        (c) The Company's obligation to make  any payments provided for in  this
    Agreement  to  the  Executive  and  otherwise  to  perform  its  obligations
    hereunder shall not  be affected  by any  setoff, counterclaim,  recoupment,
    defense  or other claim, right or action  which the Company may have against
    the Executive or  others. In no  event shall the  Executive be obligated  to
    seek  other employment  or take  other action  by way  of mitigation  of the
    amounts payable  to  the Executive  under  any  of the  provisions  of  this
    Agreement,  and  such  amounts  shall  not be  reduced  whether  or  not the
    Executive obtains other employment.
 
    10.  NONCOMPETITION.
 
        (a)  DISCLOSURE.  The Executive has disclosed to the Board, in  writing,
    all  healthcare-related  interests,  investments,  or  business  activities,
    whether as proprietor, stockholder, partner, co-venturer, director, officer,
    employee,  independent  contractor,  agent,  consultant,  or  in  any  other
    capacity  or manner  whatsoever. The  Executive shall  notify the  Board, in
    writing, of any  changes in or  additions to such  interests, activities  or
    investments permitted in accordance with the terms of this Agreement, within
    15 days of such change or addition.

        (b)   PROHIBITED ACTIVITY.  Without the written consent of a majority of
    the Independent  Directors, the  Executive  may not  engage  in any  of  the
    following  actions during  the period that  is (A) prior  to the Executive's
    termination of employment with the  Company, (B) within two years  following
    the  termination of his employment with  the Company during the Initial Term
    if such termination is by  the Company for Cause  or by the Executive  other
    than  for Good Reason and  (C) within one year  following his termination of
    employment during the Term but after the Initial Term if such termination is
    by the Company for Cause or by the Executive other than Good Reason.
 
           (i) own, either directly or indirectly, any interest in any  business
       that  competes with  the "Primary Business"  in which the  Company or any
       subsidiary or affiliate is engaged, within a radius of 30 miles from  any
       site,  facility, or  location which is  owned, managed or  operated by or
       affiliated with the Company  or any of  its subsidiaries and  affiliates,
       including   physician  practices  of  any  kind.  For  purposes  of  this
       Agreement, "Primary  Business"  shall  mean the  delivery  of  integrated
       healthcare  services in markets where the Company or its subsidiaries own
       hospitals and/or skilled  nursing facilities ("SNFs")  with the  hospital
       serving  as the hub of the local  delivery system in conjunction with its
       physician medical staff. In addition to inpatient acute care, psychiatric
       care, and skilled nursing care, these services can include (A) individual
       physician practices and/or physician-based organizations such as  primary
       care  and specialty clinics, physician-hospital organizations ("PMOs") or
       medical service organizations ("MSOs"),  or physician medical groups  and
       (B)  ambulatory programs  such as  home health  care, ambulatory surgery,
       psychiatric  services,   occupational   and  sports   medicine   centers,
       psychiatric  after-care  and  day care  programs,  and  other diagnostic,
       rehabilitative and treatment services. Some of these services, sites  and
       facilities may be located in satellite areas for the purpose of extending
       the  hub hospital's geographic service area and to serve as access points
       and/or referral sources for either the  local delivery system or the  hub
       hospital's  geographic service area and to  serve as access points and/or
       referral sources  for  either  the  local  delivery  system  or  the  hub
       hospital.  The Board  may modify,  from time  to time,  the definition of
       Primary Business to include any  additional business or service  activity
       in  which  the Company  may  engage during  the  Term or  to  exclude any
       business or service in which the Company ceases to engage. The definition
       of "Primary Business"  may also be  modified to include  any business  or
       service  into which, as of the Termination Date, the Company definitively
       intends to expand, regardless of  whether such expansion actually  occurs
       after   the  Executive's  termination.  For  purposes  of  the  preceding
       sentence, the date on which a modification of the definition of  "Primary
       Business"  shall be effective shall be the date on which the Executive is
       provided  written  notice  of  such  modification  (the  "Notice  Date");
       PROVIDED,  HOWEVER,  that  no such  modification  as to  which  notice is
       provided on or after the Termination Date shall be effective against  the
       Executive;  and  PROVIDED, FURTHER,  that no  such modification  shall be
       effective  with  respect  to  any  interests,  investments  or   business
       activities  engaged  in by  Executive prior  to the  Notice Date  of such
       modification and properly disclosed prior to such Notice Date pursuant to
       Section 10(a);
 
           (ii) participate or serve, either directly or indirectly, whether  as
       a  proprietor,  stockholder,  partner,  co-venturer,  director,  officer,
       employee, independent  contractor, agent,  consultant,  or in  any  other
       capacity  or manner whatsoever  in any business  or service activity that
       competes with the Primary Business;
 
          (iii) directly  or  indirectly,  solicit  or  recruit  any  individual
       employed  by the Company, its subsidiaries  or affiliates for the purpose
       of being employed by  him or by  any competitor of  the Company on  whose
       behalf  he is acting  as an agent, representative  or employee, or convey
       any confidential information or  trade secrets regarding other  employees
       of the Company, its subsidiaries or affiliates to any other person; or
 
          (iv)  directly  or  indirectly,  influence  or  attempt  to  influence
       customers of the  Company or  any of  its subsidiaries  or affiliates  to
       direct their business to any competitor of the Company;

       PROVIDED,  HOWEVER,  that  neither  (i)  the  "beneficial  ownership"  by
       Executive, either individually or as a member of a "group," as such terms
       are used in Rule 13d under the Exchange Act, as a passive investment,  of
       not  more than five percent (5%) of the voting stock of any publicly held
       corporation, nor  (ii)  the  beneficial ownership  by  Executive  of  any
       interest  described in the  first sentence of  Section 10(a) and properly
       and timely disclosed in accordance with the terms therewith, shall  alone
       constitute a violation of this Agreement.
 
       In the event that the Executive engages in the conduct proscribed by this
       Section  10, the Executive agrees to  repay any lump-sum severance amount
       received pursuant to  Section 5  of this Agreement,  and all  outstanding
       stock  options held by the  Executive shall expire as  of the date of the
       Executive's commencement  of  such  proscribed  conduct.  It  is  further
       expressly agreed that the Company will or would suffer irreparable injury
       if  Executive  were to  compete  with the  Company  or any  subsidiary or
       affiliate in violation of  this Agreement and that  the Company would  by
       reason  of  such competition  be  entitled to  preliminary  or injunctive
       relief in  a court  of appropriate  jurisdiction, and  Executive  further
       consents  and stipulates to  the entry of  such preliminary or injunctive
       relief in  such a  court prohibiting  Executive from  competing with  the
       Company  or any  subsidiary or affiliate  of the Company  in violation of
       this Agreement upon an appropriate  finding by such court that  Executive
       has violated this Section 10.
 
        (c)   UNENFORCEABLE PROVISIONS.  It is  the desire and the intent of the
    parties that the provisions of this  Section 10 shall be enforceable to  the
    fullest   extent  permissible  under  applicable   law  and  public  policy.
    Accordingly, if this Section 10 or any portion thereof shall be  adjudicated
    to  be invalid or unenforceable whether because of the duration and scope of
    the covenants set  forth herein or  otherwise, the length  and scope of  the
    restrictions  set forth in  this Section 10  shall be reduced  to the extent
    necessary so  that this  covenant  may be  enforced  to the  fullest  extent
    possible under applicable law.
 
    11.    CONFIDENTIAL INFORMATION.   The  Executive  acknowledges that  in his
employment hereunder, and during  prior periods of  employment with the  Company
and/or  its subsidiaries, he has occupied and will continue to occupy a position
of trust and confidence. The Executive shall  not, except as may be required  to
perform  his  duties  hereunder or  as  required  by applicable  law,  until the
expiration of the applicable  periods described in Section  10(b) or until  such
information  shall have become public other than by the Executive's unauthorized
disclosure, disclose  to others  or  use, whether  directly or  indirectly,  any
Confidential Information regarding the Company, its subsidiaries and affiliates.
"Confidential  Information"  shall  mean  information  about  the  Company,  its
subsidiaries and affiliates, and their respective clients and customers that  is
not  publicly  disclosed  by the  Company  or otherwise  generally  available to
members of  the public  seeking such  information and  that was  learned by  the
Executive  in the course of his employment  by the Company, its subsidiaries and
affiliates, including  (without  limitation) any  proprietary  knowledge,  trade
secrets,  data,  formulae, information  and client  and  customer lists  and all
papers, resumes,  and  records (including  computer  records) of  the  documents
containing  such Confidential Information. The  Executive acknowledges that such
Confidential Information is specialized, unique in nature and of great value  to
the  Company, its subsidiaries  and affiliates, and  that such information gives
the Company,  its  subsidiaries  and affiliates  a  competitive  advantage.  The
Executive  agrees to deliver or return to  the Company, at the Company's request
at any time  or upon  termination or  expiration of  his employment  or as  soon
thereafter as possible, all documents, computer tapes and disks, records, lists,
data,  drawings, prints, notes and written  information (and all copies thereof)
furnished by the  Company, its  subsidiaries or  affiliates or  prepared by  the
Executive during the term of his employment by the Company, its subsidiaries and
affiliates.
 
    In  the event that the  Executive engages in any  conduct proscribed by this
Section 11, the Executive agrees to repay any lump-sum severance amount received
pursuant to Section 5 of this Agreement, and all outstanding stock options  held
by  the Executive shall expire as of the date of the Executive's commencement of
such proscribed conduct. It is further expressly agreed that the Company will or
would suffer irreparable  injury if Executive  were to disclose  or threaten  to
disclose

Confidential Information regarding the Company or any subsidiary or affiliate in
violation  of this Agreement or otherwise fail  to comply with the provisions of
this Section 11, and  that the Company  would, by reason  of such disclosure  or
threatened  disclosure or other failure to comply, be entitled to preliminary or
permanent  injunctive  relief  in  a  court  of  appropriate  jurisdiction,  and
Executive  further consents and  stipulates to the entry  of such preliminary or
permanent  injunctive  relief  in  such  a  court  prohibiting  Executive   from
disclosing  Confidential Information in violation of this Agreement or otherwise
requiring Executive to  comply with the  provisions of this  Section 11 upon  an
appropriate finding by such court that Executive has violated this Section 11.
 
    12.   NOTICE.  For the purposes  of this Agreement, any notices, demands and
all other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given upon (a) transmitter's confirmation of a
receipt of  a  facsimile transmission,  (b)  confirmed delivery  by  a  standard
overnight carrier or (c) the expiration of five business days after the day when
mailed  by certified or  registered mail, postage  prepaid, addressed as follows
(or at such other address as the parties hereto shall specify by like notice):
 
                            
If to Executive:               R.J. Messenger
                               ---------------------------------
 
                               ---------------------------------
 
                               ---------------------------------
 
If to Company:                 Paracelsus Healthcare Corporation
                               515 West Greens Road
                               Suite 800
                               Houston, Texas 77067
                               Telecopy No. (713) 878-6686
                               Attention: Robert C. Joyner, Senior Vice President
                               and General Counsel
 
with a copy to:                Skadden, Arps, Slate, Meagher & Flom
                               300 South Grand Avenue, Suite 3400
                               Los Angeles, California 990071
                               Telecopy No. (213) 687-5600
                               Attention: Thomas C. Janson
13. AMENDMENT, WAIVER. No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a written document signed by the Executive and such officer of the Company, as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 14. ENTIRE AGREEMENT. This Agreement and Exhibits A and B hereto set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto. 15. GOVERNING LAW; VENUE; VALIDITY. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California without regard to the principle of conflicts of laws and, at the election of the Executive, the venue of any dispute arising under this Agreement shall be California. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect. 16. HEADINGS. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 17. SEVERABILITY. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, only the portions of this Agreement that violate such statute or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first written above. PARACELSUS HEALTHCARE CORPORATION By: ----------------------------------- Name: Title: ----------------------------------- R. J. MESSENGER EXHIBIT A MANAGEMENT RIGHTS TERMS In so much as the Board of Directors and Dr. Manfred Krukemeyer recognize the value to recruiting and retaining the services of a highly qualified executive team and that such objective is in the best interests of the Company and all its stockholders, and further that Messrs. Messenger, Miller, VanDevender and Patterson are instrumental to insuring the success of the merger between Paracelsus and Champion, and that a clear delineation of duties, authority and responsibility is essential to the foregoing, the Board of Directors, Dr. Krukemeyer, and Messrs. Messenger and Miller ("The Parties") agree that the concepts set forth herein will be incorporated in the various merger transaction documents, including employment contracts: BOARD OF DIRECTORS AUTHORITY AND RESPONSIBILITY - Ron Messenger and Charles Miller shall have the authority to discharge their duties and responsibilities as outlined herein for managing the affairs of the corporation except for those items delineated below which is understood normally requires Board approval. The Board, in its discretion, may delegate any such authority and approval powers as it deems appropriate with respect to the items delineated below to duly constituted committees of the Board excepting those powers and authority which require the action of the Board acting as a whole. 1. Acquisitions & Divestitures of any kind; 2. Capital expenditures exceeding $5 million per project ($10 million for construction and/or renovation projects and acquisition of real estate) and $50 million in aggregate, including but not limited to equipment purchases, capitalized leases and acquisition of physician practices, clinic, surgery center, or other healthcare entities; 3. Major financings and any offerings of equity or debt; 4. Issuance of stock; 5. Appointment of corporate officers; 6. Stock option plans or stock grants; 7. Approval of annual operating and capital budget; 8. Employment Agreements for Executive Management; 9. Changes or amendments to corporate charter of incorporation or by-laws; 10. Material change in Company business strategy; 11. Liquidation or sale of Company or any subsidiary or merger or other business combination with another company; 12. Compensation and benefit levels and incentive plans for executive officers; 13. Termination of the: (i) CEO, (ii) President and COO, and (iii) CFO. The Board shall designate an Executive Committee of the Board which shall be delegated such authority as decided by the Board of Directors for conducting the business of the Company. Members of the Executive Committee shall be: (i) Mr. Messenger, as Chairman, (ii) Mr. Miller, and (iii) Mr. VanDevender. The Executive Committee shall be delegated the authority to act on behalf of the Board on any business issues not otherwise requiring action by the Board as a whole except: 1. Major financings and any offerings of equity or debt; 2. Issuance of stock or approval of stock option plans; 3. Employment Agreements for (i) CEO, (ii) President & COO, and (iii) CFO; 4. Compensation, benefits and incentive plans, including allocation of stock options for (i) CEO, (ii) President & COO, and (iii) CFO; 5. Termination of (i) CEO, (ii) President & COO, and (iii) CFO; 6. Material change in Company business strategy; 7. Changes or amendments to the corporate charter of incorporation or by-laws; 8. Liquidation or sale of Company or subsidiary or merger or other business combination with another company; 9. Any hospital acquisition transaction involving more than a $30 million expenditure of capital, excluding working capital and/or assumption of debt; 10. Divestiture of any hospital; 11. Approval of annual operating and capital budget; 12. Capital expenditures exceeding $5 million per project ($10 million for construction and/or renovation projects and acquisition of real estate) and $50 million in aggregate, including but not limited to equipment purchases, capitalized leases and acquisition of physician practices, clinic, surgery center, or other healthcare entities. MR. MESSENGER'S AUTHORITY AND RESPONSIBILITY - The parties agree that Mr. Messenger shall be Chairman of the Executive Committee of the Board of Directors and serve as Chief Executive Officer of the new company. Except where otherwise noted, decisions with respect to the following shall be reserved exclusively to Mr. Messenger at his sole discretion: 1. Serving as liaison with Board of Directors; 2. Relocation of corporate offices; 3. Capital expenditures, as defined above, which exceed $3 million and up to $5,000,000; 4. Employment and compensation status of direct reports to Mr. Messenger (as defined throughout this agreement, references to Messenger "direct reports" shall exclude Mr. Miller); 5. Approval of senior lender participants and agent bank; 6. Approval of investment bankers, upon concurrence by Mr. Miller; 7. Chairmanship of the Audit Committee of the Board of Directors; 8. Chairmanship of the Executive Committee of the Board of Directors. Any and all proposals to be presented to the Board, or any of its Committees, or the Executive Committee are subject to the review of and approval, disapproval or modification by Mr. Messenger. Mr. Messenger, in his sole discretion and to the extent practicable, may elect to exempt himself, and his direct reports from any changes in corporate policies and procedures which: (i) were not agreed to at the time of the merger, or (ii) reduce or materially affect the agreed upon status or benefits of Mr. Messenger or his direct reports. Mr. Messenger shall develop and be solely responsible for administering and controlling an overhead budget for the Office of the CEO which shall include himself and his direct reports with such budget subject to the approval by the Board of Directors, provided however that such budget does not otherwise breach or circumvent Mr. Miller's authority and responsibility as set forth herein. Any other duties, authority and responsibilities not delineated above, or which are not otherwise reserved specifically to the Board or Mr. Miller, shall be reserved to Mr. Messenger so long as such duties, authority and responsibilities do not otherwise unreasonably abridge Mr. Miller's rights to manage the day-to-day affairs of the new company as delineated below. MR. MILLER'S AUTHORITY AND RESPONSIBILITY - The parties have agreed that it is in the best interests of the Company and its stockholders to retain Mr. Miller's services following the merger and that he shall be elected President and Chief Operating Officer of the new company and along with Mr. VanDevender be appointed to the Executive Committee of the Board. The parties also agree that Mr. Miller shall be delegated full authority and responsibility for managing the day-to-day affairs of the corporation, subject to the powers and authority reserved exclusively to the Board of Directors and Mr. Messenger as delineated above and the mutual areas of responsibility to be shared by Messrs. Messenger and Miller delineated below. Therefore, the parties agree that Mr. Charles R. Miller in his sole discretion shall have such authority and responsibility as is reasonably required to manage and oversee the day-to-day affairs of the corporation, including but not limited to the following: 1. HOSPITAL, SUBSIDIARY AND BUSINESS UNITS - Complete responsibility for management and decisions associated with the operations of the Company's hospitals, business units, subsidiaries and markets, including but not limited to: (i) determination of staffing levels, (ii) control of expenses, (iii) recruitment, selection and employment of key management, (iv) management and financial reporting and systems, including data processing systems, (v) medical staff issues, including credentialing and modifications to and enforcement of medical staff by-laws, rules and regulations, (vi) quality of care and service, (vii) decisions regarding programs and services to be offered or discontinued, (viii) use or discontinuance of vendors, contractors and consultants, (ix) any and all contracts and the approval, discontinuance or modification thereof, including physician contracts, (x) accounting, budgeting, reimbursement, financial and cash management policies, procedures and systems, (xi) market strategy development and implementation, (xii) composition of local boards, (xiii) policies, by-laws, rules & regulations, (xiv) promotional and marketing activities, and (xv) capital expenditures up to but not exceeding $3 million; 2. CONTRACTS AND LEASES - Approval or disapproval of any and all contracts and leases within Mr. Miller's authority level; 3. CORPORATE OVERHEAD BUDGET & EXPENSES - Complete authority for development, control, administration and management of the Company's corporate overhead budget, after approved by Board, and control of all corporate expenses, excluding the CEO's direct reports and corporate overhead budget; 4. CORPORATE MATTERS - Management and supervision of the Company's corporate activities and operations (excluding Mr. Messenger's direct reports and corporate overhead budget), responsibility for all decisions pertaining thereto, including but not limited to, (i) establishing or changing of job titles, duties and responsibilities, (ii) recruiting, hiring, firing, promoting, demoting, transferring, and relocating employees, (iii) determining compensation levels, incentive plans, and benefit programs, (iv) establishment, revision or discontinuance of Company policies and procedures, (v) legal affairs and related matters, including risk management and insurance, (vi) budgeting, data processing, tax, fiscal, accounting, reimbursement, cash management and corporate finance, including policies, procedures and systems, (vii) management and financial reporting policies, procedures and systems, (viii) construction and renovation projects, (ix) managed care contracting, (x) acquisition and development activities, (xi) physician recruiting and associated physician activities such as practice management, (xii) development and execution of Company business plan and strategies, (xiii) press releases, public relations, and media relations, (xiv) preparation of the Company's annual operating and capital budget, and (xv) investor and banking relations (except as noted below under "Mutual Responsibility"). The parties agree that any duties, responsibilities, functions, or authority not specifically delineated in this section but which would otherwise reasonably be considered integral to managing the day-to-day affairs of the Company and its operations, including its business units, subsidiaries and affiliates, both now and in the future, will be reserved to Mr. Miller as part of this Management Rights Agreement. MUTUAL RESPONSIBILITY - Messrs. Messenger and Miller agree to jointly develop plans and strategies for promoting the Company to the financial community, including but not limited to: (i) preparation of the annual report, (ii) analyst meetings, (iii) road shows, (iv) presentations at conferences, (v) bank meetings and presentations, (vi) mergers, acquisitions, and divestitures, and (vii) media interviews. Further, Messrs. Messenger and Miller will be considered "ex-officio" members of any and all boards of the new company's subsidiary operations and may elect to attend any meetings of such boards at their sole discretion. COVENANT NOT TO BREACH AGREEMENT - The Board of Directors, Dr. Krukemeyer and Mr. Messenger agree not to initiate any actions or decisions which in any way would breach Mr. Miller's duties, authority and responsibility as specified herein, except where the Board's authority or approval is otherwise required. The Board and Dr. Krukemeyer further agree not to initiate any actions or decisions which in any way breach Mr. Messenger's duties, authority and responsibility as specified herein, except where the Board's authority or approval is otherwise required. The parties agree that any breach of the above duties, authority and responsibility of Messrs. Miller and Messenger shall constructively constitute Termination Without Cause as specified in Messrs. Messenger's and Miller's Employment Agreements, unless such breach is waived in writing by Messrs. Messenger and Miller. These "Management Rights Terms" shall be incorporated into the Employment Contracts of Messrs. Messenger and Miller and/or such other documents as is appropriate and shall be in full force and effect through each contract renewal term of Messrs. Messenger and Miller until Mr. Miller shall become CEO of the Company. EXHIBIT B During the Term of the Agreement, the Company shall provide Executive with the following group health, group life insurance and disability coverages: (1) HEALTH BENEFITS -- Executive, his wife, minor children and any other eligible dependents (as defined in the health plan maintained by the Company) are to be reimbursed for 100% of the hospital and medical expenses presently covered by the Company's health plan which Executive and such dependents may incur; (2) DENTAL BENEFITS -- Executive, his wife, minor children and any other eligible dependents (as defined in any dental plan which may be maintained by the Company, or in the absence of a dental plan, as defined in the health plan maintained by the Company) are to be reimbursed for 100% of the dental expenses presently covered by the Company's dental plan which he and such dependents may incur; (3) LIFE INSURANCE -- Executive, subject to health eligibility, is to be covered by life insurance equal to four times the amount of his salary as in effect from time to time, provided, however, that if the Company may not reasonably obtain life insurance coverage equal to four times such salary, the Company will provide a lump-sum death benefit in the amount necessary when added to any life insurance provided by the Company to provide Executive's beneficiary(ies) with the amount he (they) would have received after payment of income tax, had the Company been able to obtain such full life insurance coverage, payable within ninety (90) days following the date of Executive's death. Executive shall have the right to name and to change the beneficiary(ies) under such life insurance coverage. The above described life insurance coverage will be in addition to any death benefits which may be payable under any accidental death and dismemberment plan, any separate business travel accident coverage, and any pension plan which the Company maintains, and such coverage shall also be in addition to any life insurance which Executive himself purchases; (4) LONG-TERM DISABILITY -- In the event Executive becomes disabled (as defined in the long-term disability plan presently maintained by the Company), Executive is to receive disability benefits in an amount equal to 60% of his then salary. Any amount payable under any salary continuation plan (including any salary continuation provided under this agreement) or disability plan maintained by the Company, and any amount payable as a Social Security disability benefit or similar benefit to Executive or his immediate family shall be counted towards the Company's fulfillment of such obligation. Disability benefits will be payable monthly commencing thirty (30) days following disability and will continue until Executive is no longer disabled or, if earlier, until he reaches age 65. During the Term of the Agreement, the Company shall also provide Executive with the following additional fringe benefits: (1) COMPANY CAR -- provide Executive with an appropriate automobile selected by Executive and acceptable to the Company. (2) CLUB MEMBERSHIPS -- reimburse Executive for the cost of membership in any two (2) local recreational clubs of his choice and for expenses incurred at such clubs in connection with Company business within fifteen (15) days of submission of invoices and charges. Expenses of a personal nature are not reimbursable by the Company. (3) VACATIONS AND HOLIDAYS -- Executive shall be entitled to such paid vacation time as may be reasonably taken at Executive's discretion so long as such vacation time does not interfere with the efficient discharge of the Executive's duties and responsibilities. Executive shall be entitled to all holidays as delineated annually in the Company's official holiday schedule. (4) PERSONAL LIABILITY -- will indemnify Executive, through insurance or otherwise, against any and all personal liability incurred in the conduct of the Company's business, other than liability arising from Executive's dishonesty, gross or willful misfeasance or nonfeasance of duty, or criminal conduct. The Company will purchase and keep in effect a personal liability insurance policy insuring Executive in the face amount of not less than Ten Million Dollars ($10,000,000) in his capacity as an individual, corporate officer and corporate director. (5) TAX RETURN PREPARATION ASSISTANCE; FINANCIAL ADVICE -- will provide the Executive with the assistance of the Company's regular auditors for the preparation of Executive's United States Federal and State tax returns without charge to Executive. In addition, the Company shall reimburse Executive for the costs incurred by Executive for financial planning services in an amount not to exceed $5,000 annually. (6) ANNUAL PHYSICAL EXAMINATION -- The Company shall reimburse Executive 100% of all costs incurred by Executive in obtaining an annual comprehensive physical examination to be conducted by a physician, clinic, or medical group of the Executive's choice and which is located within reasonable proximity to Executive's place of Employment

Basic Info X:

Name: EMPLOYMENT AGREEMENT
Type: Employment Agreement
Date: July 19, 1996
Company: PARACELSUS HEALTHCARE CORP
State: California

Other info:

Date:

  • July 17 , 1996
  • November 20 , 1983
  • April 12 , 1996
  • May 29 , 1996

Organization:

  • Champion Healthcare Corporation
  • PC Merger Sub , Inc.
  • Stock Option Committee of the Board
  • Internal Audit Department of the Company
  • Paracelsus Healthcare Corporation Supplemental
  • Company 's Shareholder Protection Rights Agreement
  • Company Voting Securities
  • Internal Revenue Service
  • American Arbitration Association
  • Company for Cause
  • Meagher & Flom
  • the State of California
  • Audit Committee of the Board of Directors
  • Executive Committee of the Board of Directors
  • Employment Contracts of Messrs. Messenger
  • United States Federal and State

Location:

  • Delaware
  • Houston
  • Texas
  • Skadden
  • Arps
  • South Grand Avenue
  • Los Angeles
  • California

Money:

  • $ 750,000
  • $ .01
  • $ 30 million
  • $ 5 million
  • $ 10 million
  • $ 50 million
  • $ 5,000,000
  • $ 3 million
  • Ten Million Dollars
  • $ 10,000,000

Person:

  • Manfred G. Krukemeyer
  • Robert C. Joyner
  • Thomas C. Janson
  • R. J. MESSENGER
  • Manfred Krukemeyer
  • Patterson
  • Ron Messenger
  • Charles Miller
  • VanDevender
  • Charles R. Miller

Percent:

  • 80 %
  • 25 %
  • 75 %
  • five percent 5 %
  • 60 %
  • 100 %