EXHIBIT 10.1
EMPLOYMENT AGREEMENT
(Xxx X. Xxxx)
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 28, 1999 (the
"Effective Date"), by and between E-DOCS HEALTH CARE INFORMATION SERVICES, INC.,
a Delaware corporation ("Employer"), and XXX X. XXXX, an individual residing in
Houston, Texas ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer and Employee desire to enter into an agreement regarding
Employee's employment with Employer pursuant to the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties covenant and agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby accepts
employment with Employer on the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. The term of Employee's employment hereunder (the
"Term") shall commence as of May 28, 1999 (the "Commencement Date") and shall
continue (subject to termination by either Employer or Employee as hereinafter
provided) for an initial term (the "Initial Term") expiring on May 28, 2001
(the "Expiration Date"). The Expiration Date shall be automatically extended
unless terminated by Employer or Employee for successive one-year periods
following the expiration of the Initial Term. If Employer desires to terminate
Employee's employment under this Agreement at the end of the Initial Term or at
the end of any succeeding one year term, Employer shall give written notice of
such desire to Employee at least one month prior to the expiration of the
Initial Term or any succeeding one year term. If Employee desires to terminate
Employee's employment under this Agreement at the end of the Initial Term or at
the end of any succeeding one year term, Employee shall give written notice of
such desire to Employer at least one month prior to the expiration of the
Initial Term or any succeeding one year term. Upon termination, Employer shall
have no further obligation to Employee other than payment of any earned and
unpaid Base Salary (as hereafter defined) under Section 3(a) and any earned and
unpaid bonus under Section 3(b), and Employee shall have no further obligation
to Employer except as set forth in Sections 7, 8, 9 and 10.
3. COMPENSATION AND OTHER BENEFITS.
a. As compensation for all services rendered by Employee in performance of
Employee's duties or obligations under this Agreement, Employer shall pay
Employee a monthly base salary of Five Thousand and No/100 Dollars ($5,000.00)
(the "Base Salary"). Employee's Base Salary shall be payable in equal semi-
monthly installments or in the manner and
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on the timetable which Employer's payroll is customarily handled or at such
intervals as Employer and Employee may hereafter agree to from time to time.
b. For so long as this Agreement is in effect, in addition to the Base
Salary, for the annual period year beginning June 1, 2000 and each annual period
thereafter during the Term hereof, Employee shall be entitled to a bonus of up
to an aggregate of $6,000.00 per annual period if, and only if, Employee has met
the performance criteria set by Employer for the applicable annual period. In
connection therewith, Employer agrees that by January 30 of each year, it
shall set the performance criteria for Employee's bonus to be earned during the
applicable annual period and shall communicate such criteria to Employee in
writing. If Employee successfully meets the performance criteria established by
Employer (in the discretion of Employer), Employer shall pay to Employee the
bonus within ninety (90) days of the end of the applicable annual period.
c. Employee shall be entitled to be reimbursed by Employer for all
reasonable and necessary expenses incurred by Employee in carrying out
Employee's duties under this Agreement in accordance with Employer's standard
policies regarding such reimbursements.
d. Employee shall be entitled during the Term, upon satisfaction of
all eligibility requirements, if any, to participate in all health, dental,
disability, life insurance and other benefit programs now or hereafter
established by Employer which cover substantially all other of Employer's
employees and shall receive such other benefits as may be approved from time to
time by Employer.
e. Employee shall be entitled to receive two weeks of paid vacation
for each year during the Term following the first anniversary of the
Commencement Date and shall be entitled to receive paid holidays as enjoyed by
all other employees of Employer.
4. DUTIES.
a. Employee is employed to act as a manager of the Employer and in
such other office or position as shall be assigned to Employee from time to time
by Employer, and to perform such duties as are commensurate with Employee's
position with Employer.
b. Employee agrees that during the period of employment, Employee
shall devote full-time efforts to Employee's duties as an employee of Employer
and Employee shall use Employee's best efforts to perform the duties of
Employee's position in an efficient and competent manner and shall use
Employee's best efforts to promote the interests of Employer and any affiliated
companies.
c. During the period of employment, Employee agrees not to (i)
solely or jointly with others undertake or join any planning for or organization
of any business activity competitive with the business activities of Employer,
and (ii) directly or indirectly, engage or participate in any other activities
in conflict with the best interests of Employer.
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d. Employee agrees that during the period of employment
Employee shall refer to Employer all opportunities (i) in the transcription
industry, and (ii) in the computer industry related to voice recognition
software designs and applications, to which Employee might become exposed in
carrying out Employee's duties and responsibilities hereunder.
5. STOCK OPTION PLAN. As a further inducement to Employee to accept
employment upon the terms set forth herein and in consideration of Employee's
execution of this Agreement, Employee shall be granted options entitling
Employee to purchase 15,000 shares of Employer's common stock, par value $0.001
(the "Initial Options"), pursuant to, and Employee shall be entitled to
otherwise participate in, that certain Applied Voice Recognition, Inc. 1997
Incentive Plan, as amended from time to time. The granting instrument for the
Initial Options will provide, in addition to other terms set forth therein, that
(i) the purchase price for the Initial Options as more particularly set forth
therein, and (ii) one-third of the Initial Options (being options to purchase
5,000 shares of common stock of Employer) shall vest on the first, second and
third anniversaries of the Commencement Date.
6. TERMINATION OF EMPLOYMENT. Employee's employment and this Agreement shall
terminate upon the earliest to occur of any of the following events (the actual
date of such termination being referred to herein as the "Termination Date"):
a. The termination of the Agreement pursuant to Section 2.
b. Employee's employment pursuant hereto shall terminate in the
event of the death of Employee.
c. Employer may terminate Employee's employment under this Agreement
for cause without any prior notice, upon the occurrence of any of the following
events:
(1) any embezzlement or wrongful diversion of funds of Employer or
any affiliate of Employer by Employee;
(2) gross malfeasance by Employee in the conduct of Employee's
duties;
(3) material breach of this Agreement;
(4) gross neglect by Employee in carrying out Employee's duties; or
(5) the failure of Employee to be able to perform Employee's duties
hereunder for a period of not less than sixty days by reason of
disability. For purposes of this Agreement, Employee shall be deemed
to have become disabled when the Board of Directors of Employer, upon
the advice of a qualified
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physician, shall have determined that Employee has become physically
or mentally incapable (excluding infrequent and temporary absences due
to ordinary illness) of performing Employee's duties under this
Agreement. Before making any termination decision pursuant to this
Section 6(c)(5), the Board of Directors of Employer shall determine
whether there is any reasonable accommodation (within the meaning of
the Americans with Disabilities Act) which would enable Employee to
perform the essential functions of Employee's position under this
Agreement despite the existence of any such disability. If such a
reasonable accommodation is possible, Employer shall make that
accommodation and shall not terminate Employee's employment hereunder
based on such disability.
d. If Employee's employment is terminated for any of the reasons
specified in Section 6(b), (c) or (e), Employer shall no longer be obligated to
make the payments specified under Section 3 or to pay to Employee any other
compensation or benefits whatsoever, except as may otherwise be provided in
Section 6(e). Notwithstanding the foregoing, if for any reason Employee's
employment is terminated hereunder, any compensation payable under Section 3(a)
which shall have been earned but not yet paid shall be paid by Employer to
Employee or Employee's estate, as the case may be. If Employee's employment is
terminated for any of the reasons specified in Section 6(c), any unvested
Initial Options shall be cancelled upon termination. In no event shall the
termination of Employee's employment hereunder affect Employer's or Employee's
obligations under the Purchase Agreement.
e. Employer shall have the right to terminate Employee's employment
hereunder without prior notice and without cause; provided, however, in the
event Employer exercises its right under this Section 6(e) during (i) the first
year of the Term of this Agreement, Employee shall continue to receive
Employee's Base Salary for two (2) months following the date of such
termination; and (ii) during the second year of the Term of this Agreement,
Employee shall continue to receive Employee's Base Salary four (4) months
following the date of such termination. If this Agreement is terminated by
Employer under this Section 6(e), Employee shall be immediately entitled to all
vested Initial Options and all unvested Initial Options that are scheduled to
vest during the year in which Employee is terminated. All other unvested Initial
Options shall immediately terminate.
7. INVENTIONS AND CREATIONS BELONG TO EMPLOYER.
a. Any and all inventions, discoveries, improvements or creations
(collectively, "Creations") which Employee has conceived or made or may conceive
or make during the period of employment in any way, directly or indirectly,
connected with Employer's business shall be the sole and exclusive property of
Employer. Employee agrees that all copyrightable works created by Employee or
under Employer's direction in connection with Employer's business are "works
made for hire" and shall be the sole and complete property of Employer and that
any and all copyrights to such works shall belong to Employer. To the extent any
of the works described in the preceding sentence are not deemed to be "works
made for hire," Employee hereby assigns all proprietary rights, including
copyright, in these works to Employer without further compensation.
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b. Employee further agrees to (i) disclose promptly to Employer all
such Creations which Employee has made or may make solely, jointly or commonly
with others during the period of employment to the extent connected with
Employer's business, (ii) assign all such Creations to Employer, and (iii)
execute and sign any and all applications, assignments or other instruments
which Employer may deem necessary in order to enable Employer, at Employer's
expense, to apply for, prosecute and obtain copyrights, patents or other
proprietary rights in the United States and foreign countries or in order to
transfer to Employer all right, title and interest in said Creations.
8. CONFIDENTIALITY; OWNERSHIP OF INFORMATION. Employer promises
that Employer will, during the Term, provide Employee with access to such
Confidential Information (as defined in Section 7(a)) owned by Employer and that
is used in the operation of Employer's business as reasonably necessary to allow
Employee to perform Employee's obligations hereunder. Employee acknowledges
that Employer has agreed to provide Employee with a definite term of employment
and with access to such Confidential Information of Employer during that term of
employment.
a. DEFINITION. For purposes of this Agreement, "Confidential
Information" means any and all information relating directly or indirectly to
Employer that is not generally ascertainable from public or published
information or trade sources and that represents proprietary information to
Employer, excluding, however, (i) Employees' business contacts, (ii) information
already known to Employee prior to Employee's employment with Employer, and
(iii) information required to be divulged in any legal or administrative
proceeding in which Employee is involved. Confidential Information shall
consist of, for example, and not intending to be inclusive, (A) software (source
and object codes), algorithms, computer processing systems, techniques,
methodologies, formulae, processes, compilations of information, drawings,
proposals, job notes, reports, records and specifications, and (B) information
concerning any matters relating to the business of Employer, any of its
customers, prospective customers, customer contacts, licenses, the prices it
obtains or has obtained for the licensing of its software products and services,
or any other information concerning the business of Employer and Employer's
goodwill.
b. NO DISCLOSURE. During the Term and at all times thereafter,
Employee shall not disclose or use in any manner, directly or indirectly, and
shall use Employee's best efforts and shall take all reasonable precautions to
prevent the disclosure of, any such trade secrets or other Confidential
Information, except to the extent required in the performance of Employee's
duties or obligations to Employer hereunder or by express prior written consent
of a duly authorized officer or director of Employer (other than Employee).
c. OWNERSHIP OF INFORMATION. Such Confidential Information is
and shall remain the sole and exclusive property and proprietary information of
Employer or Employer's customers, as the case may be, and is disclosed in
confidence by Employer or permitted to be acquired from such customers in
reliance on Employee's agreement to maintain
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such Confidential Information in confidence and not to use or disclose such
Confidential Information to any other person except in furtherance of Employer's
business.
d. RETURN OF MATERIAL. Upon the expiration or earlier termination of
this Agreement for any reason, Employee shall immediately turn over to Employer
all documents, disks or other magnetic media, or other material in Employee's
possession or under Employee's control that (i) may contain or be derived from
Creations or Confidential Information, or (ii) are connected with or derived
from Employee's services to Employer. Employee shall not retain any Confidential
Information in any form (e.g., computer hard drive, microfilm, etc.) upon the
expiration or earlier termination of this Agreement.
9. NONCOMPETE; WORKING FOR COMPETITOR. In consideration of Employee's
employment by Employer, Employee will not, at any time during the Term or at any
time for twenty-four (24) months subsequent to any termination of Employee's
employment, whether voluntary or otherwise, directly or indirectly, within the
United States, Canada, Mexico, South America or Europe, for Employee's own
account or on behalf of any direct competitors of Employer, engage in any
business or transaction involving the design, installation, integration, service
or consulting with respect to (i) transcription services, or (ii) voice
recognition software designs and applications (whether as an employee, employer,
independent contractor, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity), without the prior written consent of Employer, which consent may be
withheld by Employer in Employer's sole and absolute discretion.
10. NON-SOLICITATION OF EMPLOYEES. During the Term and for a period of twenty-
four (24) months after the date of termination of employment, Employee will not
in any way, directly or indirectly (i) induce or attempt to induce any employee
of Employer to quit employment with Employer; (ii) otherwise interfere with or
disrupt Employer's relationship with its employees; (iii) solicit, entice or
hire away any employee of Employer; or (iv) hire or engage any employee of
Employer or any former employee of Employer whose employment with Employer
ceased less than one year before the date of such hiring or engagement. Employee
acknowledges that any attempt on the part of Employee to induce others to leave
Employer's employ, or any effort by Employee to interfere with Employer's
relationship with its other employees would be harmful and damaging to Employer.
11. EMPLOYEE'S ACKNOWLEDGEMENT. It is the express intention of Employee and
Employer to comply with Sections 15.50 et seq. of the Texas Business and
Commerce Code in effect as of the date of execution hereof. Employee stipulates
that the provisions of this Agreement are not oppressive or overly burdensome to
Employee and will not prevent Employee from earning an income following
termination of this Agreement. Employee warrants and represents that:
a. Employee is familiar with non-compete and non-solicitation
covenants;
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b. Employee has discussed or acknowledges the opportunity to discuss
the provisions of the non-compete and non-solicitation covenants contained
herein with Employee's attorney and has concluded that such provisions
(including, without limitation, the right to equitable relief and the length of
time provided for herein) are fair, reasonable and just under the circumstances;
c. Employee is fully aware of the obligations, limitations and
liabilities included in the non-compete and non-solicitation covenants contained
in this Agreement;
d. The scope of activities covered hereby are substantially similar to
those activities to be performed by Employee under this Agreement;
e. The twenty-four (24) month non-compete and non-solicitation period
is a reasonable restriction, giving consideration to the following factors: (1)
Employee and Employer reasonably anticipate that this Agreement, although
terminable under certain provisions, will continue in effect for sufficient
duration to allow Employee to attain superior bargaining strength and an ability
for unfair competition with respect to the customers covered hereby; (2) the
duration of the twenty-four (24) month non-compete and non-solicitation period
is a reasonably necessary period to allow Employer to restore its position of
equivalent bargaining strength and fair competition with respect to those
customers covered hereby; and (3) historically, employees of all types have
remained with Employee for a duration of longer than the duration of the twenty-
four (24) month non-compete and non-solicitation period; and
f. The limitations contained in this Agreement with respect to
geographic area, duration and scope of activity are reasonable; however, if any
court shall determine that the geographic area, duration or scope of activity of
any restriction contained in this Agreement is unenforceable, it is the
intention of the parties that such restrictive covenants set forth herein shall
not thereby be terminated, but shall be deemed amended to the extent required to
render such covenants valid and enforceable.
12. REMEDIES; INJUNCTION. In the event of a breach or threatened breach by
Employee of any of the provisions of this Agreement, Employee agrees that
Employer, in addition to and not in limitation of any other rights, remedies or
damages available to Employer at law or in equity, shall be entitled to a
permanent injunction without the necessity of proving actual monetary loss in
order to prevent or restrain any such breach by Employee or by Employee's
partners, agents, representatives, servants, employees and/or any and all
persons directly or indirectly acting for or with Employee. It is expressly
understood between the parties that this injunctive or other equitable relief
shall not be Employer's exclusive remedy for any breach of this Agreement, and
Employer shall be entitled to seek any other relief or remedy which it may have
by contract, statute, law or otherwise for any breach hereof.
13. ARBITRATION. THE PARTIES AGREE THAT ALL DISPUTES OR QUESTIONS
ARISING IN CONNECTION WITH THIS AGREEMENT AND/OR THE TERMINATION OF EMPLOYEE'S
EMPLOYMENT HEREUNDER SHALL BE
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SETTLED BY A SINGLE ARBITRATOR PURSUANT TO THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION IN THE CITY OF HOUSTON, TEXAS, AND THE AWARD OF THE ARBITRATORS
SHALL BE FINAL, NON-APPEALABLE, CONCLUSIVE AND ENFORCEABLE IN A COURT OF
COMPETENT JURISDICTION; PROVIDED, HOWEVER, NOTWITHSTANDING THE FOREGOING, IN NO
EVENT SHALL ANY DISPUTE, CLAIM OR DISAGREEMENT ARISING UNDER SECTIONS 7, 8, 9
AND 10 OF THIS AGREEMENT THAT REQUIRES INJUNCTIVE OR OTHER EQUITABLE RELIEF BE
REQUIRED TO BE SUBMITTED TO ARBITRATION PURSUANT TO THIS PROVISION OR OTHERWISE.
14. NOTICES. Any notice, demand or request which may be permitted,
required or desired to be given in connection therewith shall be given in
writing and directed to Employer and Employee as follows:
If to Employer, at: e-DOCS Health Care Information Services, Inc.
c/o Applied Voice Recognition, Inc.
d/b/a x-XXXX.xxx
0000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
with a copy to: Xxxxx, Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
or, if to Employee, at: Xxx X. Xxxx
00000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No.: (___) ___-______
with a copy to: Xxxxx X. Xxxxxx, Esq.
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Notices shall be deemed properly delivered and received when and if either: (i)
personally delivered; (ii) delivered by nationally-recognized overnight courier;
(iii) when deposited in the U.S. Mail, by registered or certified mail, return
receipt requested, postage prepaid; or (iv) sent via facsimile transmission with
confirmation mailed by regular U.S. mail. Any party may change its notice
address for purposes hereof to any address within the continental United States
by giving written notice of such change to the other parties hereto at least
fifteen days prior to the intended effective date of such change.
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15. SEVERABILITY. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, Employer and
Employee shall promptly meet and negotiate substitute provisions for those
rendered or declared illegal or unenforceable, but all the remaining provisions
of this Agreement shall remain in full force and effect.
16. ASSIGNMENT. This Agreement may not be assigned by any party without
the prior written consent of the other parties.
17. BINDING AGREEMENT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective legal
representatives, heirs, successors and permitted assigns
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
19. ATTORNEYS FEES. In the event of any dispute between the parties
regarding this Agreement, the prevailing party shall be entitled to be
reimbursed for such prevailing party's attorneys fees and costs of court (or
cost of arbitration, as applicable) by the non-prevailing party.
20. AGREEMENT READ, UNDERSTOOD AND FAIR. Employee has carefully read and
considered all provisions of this Agreement and agrees that all of the
restrictions set forth are fair and reasonable and are reasonably required for
the protection of the interests of Employer.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement on this 28th
day of May, 1999, effective as of the Effective Date.
EMPLOYER:
E-DOCS HEALTH CARE INFORMATION SERVICES, INC., a
Delaware corporation
By: /s/ XXXXX X. XXXXXXX
---------------------------------------------
Xxxxx X. Xxxxxxx, President
EMPLOYEE:
/s/ XXX X. XXXX
---------------------------------------------
Xxx X. Xxxx
Signature Page to
Employment Agreement
(Xxx X. Xxxx)
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