AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.2
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made effective as of
March 16, 2006 (the “Effective Date”), between Mediware Information Systems,
Inc., (hereinafter "the Company") and Xxxx Xxxxxxxx (hereinafter the
“Executive").
WHEREAS,
the Executive is a current employee of the Company, and now the Company desires
to employ the Executive as the Vice President and General Manager of the Blood
Bank Division, or in such other capacity as the parties may agree, and the
Executive desires to be so employed by the Company, on the terms and conditions
hereinafter set forth;
NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants
and
agreements herein set forth, the Company and the Executive hereby agree as
follows:
1.
Employment.
The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve as the Vice President and General Manager of the Blood Bank Division,
or in such other capacity as the parties may mutually agree. The Executive
agrees to perform such services customary to such office as shall from time
to
time be assigned to him by the Chief Executive Officer or his designee. The
Executive further agrees to use his best efforts to promote the interests of
the
Company and to devote his full energies to the business and affairs of the
Company.
2.
Term
of Employment.
The
employment hereunder shall be for a term of thirty-six months commencing on
the
Effective Date hereof and ending thirty-six months after the Effective Date
hereof (the "'Expiration Date"), unless terminated earlier pursuant to Paragraph
4 of this Agreement (the "Term of Employment"). This Agreement shall
automatically renew for successive terms of one (1) year (each a "Renewal Term")
commencing on the first day immediately following the Expiration Date, unless
such renewal is objected to by either the Company or the Executive by giving
at
least 90 days prior written notice prior to the scheduled Expiration Date.
In
the event of such renewal, the last day of each successive Renewal Term shall
be
deemed the Expiration Date.
3.
Compensation
and Other Related Matters.
(a)
Salary.
As
compensation for services rendered hereunder, the Executive shall receive an
Annual Base Salary of one hundred eighty thousand dollars ($180,000), which
salary shall be paid in accordance with the Company's then prevailing payroll
practices for its executives and shall be subject to review annually by the
Chief Executive Officer and the Compensation Committee of the Board of
Directors.
(b)
Bonus.
During
the term of this Agreement the Executive shall be eligible to receive an Annual
Bonus of up to 50% of Executive’s Annual Base Salary for achieving objectives
established by the Company, subject to the discretion of the Chief Executive
Officer and the Compensation Committee of the Board of Directors. The bonus,
if
any, would be payable after the conclusion of the annual audit.
(c)
Equity
Compensation.
Performance
Shares.
The
Executive is hereby granted twenty thousand (20,000) restricted
shares of Stock (the “Performance Shares”) under the terms of the Company's Plan
and an applicable restricted stock agreement.
(d)
Other
Benefits.
The
fringe benefits, perquisites and other benefits of employment, including three
(3) weeks vacation each year, to be provided to the Executive shall be
equivalent to such benefits and perquisites as are provided to other senior
executives of the Company as amended from time to time.
(e)
Reimbursement.
Subject
to policies established from time to time by the Company, the Company shall
reimburse Executive for the reasonable expenses incurred by him in connection
with the performance of his duties hereunder, including but not limited to,
travel expenses and entertainment expenses, for which the Executive shall
account to the Company in a manner sufficient to conform to Company policy
and
Internal Revenue Service requirements.
4.
Termination.
(a)
Disability.
If, as
a result of the incapacity of the Executive due to physical or mental illness,
the Executive is unable to perform substantially and continuously the duties
assigned to him hereunder for a period of three (3) consecutive months or for
a
non-consecutive period of nine (9) months during the Term of Employment, the
Company may terminate his employment for "Disability" upon thirty (30) days
prior written notice to the Executive.
(b)
Death.
The
Executive's employment shall terminate immediately upon the death of the
Executive.
(c)
Cause.
The
Company shall be entitled to terminate the Executive's employment for "Cause."
Termination by the Company of the employment of the Executive for "Cause" shall
mean termination based upon (i) the willful failure by the Executive to follow
directions communicated to him by the Chief Executive Officer or his designee;
(ii) the willful engaging by the Executive in conduct which is materially
injurious to the Company, monetarily or otherwise; (iii) a conviction of, a
plea
of nolo
contendere, a
guilty
plea or confession by the Executive to an act of fraud, misappropriation or
embezzlement or to a felony; (iv) the Executive's habitual drunkenness or use
of
illegal substances; (v) a material breach by the Executive of this Agreement;
or
(vi) an act of gross neglect or gross misconduct which the Company deems in
good
faith to be good and sufficient cause. Executive hereby represents and warrants
that he has never been convicted of an act of fraud, misappropriation,
embezzlement or a felony, and Executive further warrants that during the Term
of
this Agreement, he will give the Company immediate notice of any charge against
the Executive relating to any of the foregoing.
(d)
Termination
Without Cause.
The
Executive shall have the right to terminate the Executive's employment without
cause at any time upon one month written notice. The Company shall have the
right to terminate the Executive’s employment without cause at any time upon
written notice. The giving of notice by either party pursuant to Section 2
to
prevent the renewal of this Agreement shall not be deemed a termination of
Executive’s employment without cause.
5.
Compensation
Upon Termination or During Disability
(a)
Disability.
During
any period that the Executive fails to perform his full-time duties with the
Company for a three-month period as a result of incapacity due to physical
or
mental illness (the "Disability Period"), the Executive shall continue to
receive his Annual Base Salary at the rate set forth in Paragraph 3(a) of this
Agreement, less any compensation payable to the Executive under the applicable
disability insurance plan of the Company during the Disability Period, until
this Agreement is terminated pursuant to Paragraph 4(a) hereof. Thereafter,
or
in the event the Executive's employment shall be terminated by reason of his
death, the Executive's benefits shall be determined under the Company's
insurance and other compensation programs then in effect in accordance with
the
terms of such programs and the Company shall have no further obligation to
the
Executive under this Agreement.
(b)
Death.
In the
event of the Executive's death, the Executive's beneficiary shall be entitled
to
receive the Executive's Annual Base Salary at the rate set forth in Paragraph
3(a) of this Agreement until the date of his death. Thereafter, the Company
shall have no further obligation to the Executive or the Executive's beneficiary
under this Agreement.
(c)
Cause.
If the
Executive's employment shall be terminated by the Company for "Cause" as defined
in Paragraph 4(c) of this Agreement, the Company shall continue to pay the
Executive his Annual Base Salary at the rate set forth in Paragraph 3(a) of
this
Agreement through the date of termination of the Executive's employment.
Thereafter, the Company shall have no further obligation to the Executive under
this Agreement.
(d)
Termination
Without Cause.
If the
Executive terminates his employment pursuant to Paragraph 4(d), the Executive
shall be entitled to receive Executive’s Annual Base Salary at the rate set
forth in Paragraph 3(a) of this Agreement until the date Executive’s employment
ends. Thereafter the Company shall have no obligation to Executive. If the
Company voluntarily terminates the Executive's employment with the Company
pursuant to Paragraph 4(d) of this Agreement, the Company shall until the
earlier of the three month anniversary of the termination of employment or
the
commencement of Executive’s employment at a successor employer, pay the
Executive an amount equal to three months of the Executive's Annual Salary
at
the highest rate in effect during the period of the Executive's employment,
payable in three equal monthly installments. Additionally, until the earlier
of
the three month anniversary of the termination of employment, or the
commencement of the provision of health benefits to the Executive by a successor
employer, the Executive will continue to receive the same coverage of health
insurance as immediately before the date of the termination, at the expense
of
the Company. Thereafter, the Executive acknowledges that the Company shall
have
no further obligation to the Executive under this Agreement. Notwithstanding
the
foregoing, the Company shall only be obligated to make the payments set forth
in
this section after the Executive delivers to the Company an executed Release
and
Severance Agreement, which shall be substantially in the form of Employer’s
standard Release and Severance Agreement for all employees, with such changes
therein or additions thereto as needed under then applicable law to give effect
to its intent and purpose. After the Executive is no longer receiving benefits
from Mediware, the Executive shall be eligible for COBRA at Executive’s own
expense in accordance with applicable law.
(e)
Acquisition
or Sale of Company.
If a
third party described in Paragraph 5(f) of this Agreement terminates the
Executive due to "an acquisition or sale of the Company", as described in
Paragraph 5(f) below, the Company shall pay the Executive an amount equal to
three months of Executive's Annual Base Salary at the rate in effect at the
date
of termination of the Executive's employment during the period of the
Executive's employment, payable in three equal monthly installments. Until
the
earlier of the three months after the termination of employment, or the
commencement of the provision of health benefits to the Executive by a successor
employer, the Executive will continue to receive the same coverage of health
insurance as immediately before the date of the termination, at the expense
of
the Company. Thereafter, the Executive acknowledges that the Company shall
have
no further obligation to the Executive under this Agreement. Notwithstanding
the
foregoing, the Company shall only be obligated to make the payments set forth
in
this section after the Executive delivers to the Company an executed Release
and
Severance Agreement, which shall be substantially in the form of Employer’s
standard Release and Severance Agreement for all employees, with such changes
therein or additions thereto as needed under then applicable law to give effect
to its intent and purpose; and after delivery to the Company of a resignation
from all offices, directorships and fiduciary positions with the Company, its
affiliates and employee benefit plans.
(f)
Definition.
For
purposes hereof, "an acquisition or sale of the Company" to or by "a third
party" shall mean the occurrence of any transaction or series of transactions
which within a six (6) month period result in (i) greater than fifty percent
(50%) of
the
then outstanding shares of Common Stock of the Company (for cash, property
including, without limitation, stock in any corporation or other third party
legal entity, indebtedness or any combination thereof) have been redeemed by
the
Company or purchased by a third party not previously affiliated with the
Company, or exchanged for shares in any other corporation or other third party
legal entity not previously affiliated with the Company, or any combination
of
such redemption, purchase or exchange, (ii) greater than fifty percent (50%)
in
book value of the Company's gross assets are acquired by a third party not
previously affiliated with the Company (for cash, property including, without
limitation, stock in any corporation whether or not unaffiliated with the
Company, indebtedness of any person or any combination thereof), or (iii) the
Company is merged or consolidated with another private or public corporation
or
other third party legal entity and the former holders of shares of Common Stock
of the Company own less than 25% of the voting power of the acquiring, resulting
or surviving corporation or other third party legal entity. For the purposes
hereof a director or officer of the Company shall be considered "affiliated
with
the Company."
6.
Confidentiality
and Restrictive Covenants.
(a)
The
Executive acknowledges that:
(i)
the
business in which the Company is engaged is intensely competitive and his
employment by the Company will require that he have continual access to and
knowledge of confidential information of the Company, including, but not limited
to, the nature and scope of its products, the object and source code offered,
marketed or under development by the Company or under consideration by the
Company for development, acquisition, or marketing by the Company and the
documentation prepared or to be prepared for use by the Company (and the phrase
"by the Company" shall include other vendors, licensees or and resellers and
value-added resellers of the Company's products or proposed product) and the
Company's plans for creation, acquisition, improvement or disposition of
products or software, expansion plans, financial status and plans, products,
improvements, formulas, designs or styles, method of distribution, lists of
remarketing and value-added and other resellers customer lists and contact
lists, product development plans, rules and regulations, personnel information
and trade secrets of the Company, all of which are of vital importance to the
success of the Company's business, provided that Confidential Information will
not include information which has become publicly known otherwise than through
a
breach by Executive of the provisions of this Agreement (collectively,
"Confidential Information");
(ii)
the
direct or indirect disclosure of any Confidential Information would place the
Company at a serious competitive disadvantage and would do serious damage,
financial and otherwise, to the Company's business;
(iii)
by
his training, experience and expertise, the Executive's services to the Company
will be special and unique; and
(iv)
if
the Executive leaves the Company's employ to work for a competitive business,
in
any capacity, it would cause the Company irreparable harm.
(b)
Covenant
Against Disclosure.
The
Executive therefore covenants and agrees that all Confidential Information
relating to the business products and services of the Company, any subsidiary,
affiliate, seller or reseller, value-added vendor or customer shall be and
remain the sole property and confidential business information of the Company,
free of any rights of the Executive. The Executive further agrees not to make
any use of the confidential information except in the performance of his duties
hereunder and not to disclose the information to third parties, without the
prior written consent of the Company. The obligations of the Executive under
this Paragraph 6 shall survive any termination of this Agreement. The Executive
agrees that, upon any termination of his employment with the Company, all
Confidential Information in his possession, directly or indirectly, that is
in
written or other tangible or readable form (together with all duplicates
thereof) will forthwith be returned to the Company and will not be retained
by
the Executive or furnished to any third party, either by sample, facsimile,
film, audio or video cassette, electronic data, verbal communication or any
other means of communication.
(c)
Non-competition.
The
Executive agrees that, during the Term of Employment and for a period of one
(1)
year following the date of termination of the Executive's employment with the
Company (or six months following the date of termination of the Executive’s
employment with the Company if the (i) Company terminates the Executive’s
employment without cause pursuant to Section 4(d); or (ii) Executive terminates
his employment for Good Reason pursuant to Section 4(e)), the Executive will
not
own, manage, or be connected as an
officer, employee or director with, or aid or assist anyone else in the conduct
of, any entity or business which competes with any business conducted by the
Company (which currently includes the licensing and sale of medical software
and
services in the Medication Management, Blood Banking and Operating Room fields)
or any of its subsidiaries or affiliates, in the United States, Canada and
the
UK and any other area where such business is being conducted on the date the
Executive's employment is terminated hereunder. Notwithstanding the foregoing
the Executive's ownership of securities of a public company engaged in
competition with the Company not in excess of five (5%) percent of any class
of
such securities shall not be considered a breach of the covenants set forth
in
this Paragraph 6.
(d)
Further
Covenant.
Until
the date which is one (1) year after the date of the termination of the
Executive's employment hereunder for any reason, the Executive will not,
directly or indirectly, take any of the following actions, and, to the extent
the Executive owns, manages, operates, controls, is employed by or participates
in the ownership, management, operation or control of, or is connected in any
manner with, any business of the type and character engaged in and competitive
with that conducted by the Company or any of its subsidiaries or affiliates
during the period of the Executive's employment, the Executive will not
encourage or participate in any of the following actions on behalf of such
business:
(i)
persuade or attempt to persuade any customer of the Company or any seller,
reseller or value-added vendor of the Company or of its products to cease doing
business with the Company or any of its subsidiaries or affiliates, or to reduce
the amount of business it does with the Company or any of its subsidiaries
or
affiliates;
(ii)
solicit for himself or any entity the business of (A) any customer of the
Company or any of its subsidiaries or affiliates, or (B) any seller, reseller
or-value-added vendor of the Company, or of its products, or (C) solicit any
business from a customer which was a customer of the Company or any of its
subsidiaries or affiliates within six months prior to the termination of the
Executive's employment; and
(iii)
persuade or attempt to persuade any employee of the Company or any of its
subsidiaries or affiliates or any individual who was an employee of the Company
or any of its subsidiaries or affiliates, at any time during the six-month
period prior to the Executive's termination of employment , to leave the employ
of the Company or any of its subsidiaries or affiliates.
7.
Intellectual
Property.
The
Executive hereby agrees that any and all (i) software, object code, source
code,
and documentation, (ii) any improvements, inventions, discoveries, formulae,
processes, methods, know-how, confidential data, patents, trade secrets, (iii)
Food and Drug Administrative ("FDA") applications seeking approval by the FDA,
information contained in the Forms 510-k of the FDA and approvals from FDA,
and
(iv) other proprietary information made, developed or created by the Executive
(whether at the request or suggestion of the Company or otherwise, whether
alone
or in conjunction with others, and whether during regular working hours of
work
or otherwise) during the period of his employment with the Company, which may
be
directly or indirectly useful in, or relate to, the business being carried
out
by the Company or any of its subsidiaries or affiliates, shall be promptly
and
fully disclosed by the Executive to the Board of Directors and shall be the
Company's exclusive property as against the Executive, and the Executive shall
promptly deliver to the Board of Directors of the Company all papers, drawings,
models, data and other material relating to any invention made, developed or
created by him as aforesaid.
The
Executive shall, upon the Company's request and without any payment therefor,
execute any documents necessary or advisable in the opinion of the Company's
counsel to direct issuance of patents, copyrights and FDA applications or
approvals of the Company with respect to such inventions or work product or
improvements or enhancements as are to be the Company's exclusive property
as
against the Executive under this Paragraph 7 or to vest in the Company title
to
such inventions as against the Executive, the expense of securing any such
patent or copyright, to be borne by the Company.
8.
Breach
by Employee.
Both
parties recognize that the services to be rendered under this Agreement by
the
Executive are special, unique and extraordinary in character, and that in the
event of a breach by Employee of the terms and conditions of the Agreement
to be
performed by him, then the Company shall be entitled, if it so elects, to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to enforce the specific performance thereof by
the
Executive. Without limiting the generality of the foregoing, the parties
acknowledge that a breach by the Executive of his obligations under Paragraph
6
or 7 would cause the Company irreparable harm, that no adequate remedy at law
would be available in respect thereof and that therefore the Company would
be
entitled to seek injunctive relief with respect thereto.
9.
Arbitration.
Without
precluding acting to obtain specific performance and/or injunctive relief
pursuant to Paragraph 8 above, in the event of any dispute between the parties
hereto arising out of or relating to this Agreement or the employment
relationship, including, without limitation, any statutory claims of
discrimination, between the Company and the Executive (except any dispute with
respect to Paragraphs 6 and 7 hereof), such dispute shall be settled by
arbitration in Nassau County or New York County, State of New York, or in
Wyandotte County or the City of Kansas City, State of Kansas, in accordance
with
the National Rules for the Resolution of Employment Disputes then in effect
of
the American Arbitration Association. The parties hereto agree that the arbitral
panel shall also be empowered to grant injunctive relief to a party, which
may
be included in any award. Judgment upon the award rendered, including injunctive
relief, may be entered in any court having jurisdiction thereof. Notwithstanding
anything herein to the contrary, if any dispute arises between the parties
under
Paragraphs 6 or 7, neither the Executive nor the Company shall be required
to
arbitrate such dispute or claim, but each party shall have the right to
institute judicial proceedings in any court of competent jurisdiction with
respect to such dispute or claim. If such judicial proceedings are instituted,
the parties agree that such proceedings shall not be stayed or delayed pending
the outcome of any arbitration proceeding hereunder.
10.
Miscellaneous.
(a)
Successors;
Binding Agreement.
This
Agreement and the obligations of the Company hereunder and all rights of the
Executive hereunder shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns, provided,
however, that the duties of the Executive hereunder are personal to the
Executive and may not be delegated or assigned by him. By entering into this
Agreement, the Executive’s prior employment agreement with the company is hereby
terminated.
(b)
Notice.
All
notices of termination and other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
by hand, delivered by an express delivery (one day service), delivered by
telefax and confirmed by express mail or one day express delivery service,
or
mailed by United States registered mail, return receipt requested, addressed
as
follows:
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If
to the Company:
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Mediware
Information Systems, Inc.
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00000
Xxxx 00xx
Xxxxxx
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Xxxxxx,
XX 00000
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If
to the Executive:
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Xxxx
Xxxxxxxx
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or
to
such other address as either party may designate by notice to the other, which
notice shall be deemed to have been given upon receipt.
(c)
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Kansas without regard to the conflict of law rules
thereof.
(d)
Waivers.
The
waiver of either party hereto of any right hereunder or of any failure to
perform or breach by the other party hereto shall not be deemed a waiver of
any
other right hereunder or of any other failure or breach by the other party
hereto, whether of the same or a similar nature or otherwise. No waiver shall
be
deemed to have occurred unless set forth in writing executed by or on behalf
of
the waiving party. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only
as
to the specific term or condition waived and shall not constitute a waiver
of
such term or condition for the future or as to any act other than that
specifically waived.
(e)
Validity.
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 shall otherwise remain in full force and effect. Moreover, if any one
or
more of the provisions contained in this Agreement is held to be excessively
broad as to duration, scope or activity, such provisions shall be construed
by
limiting and reducing them so as to be enforceable to the maximum extent
compatible with applicable law.
(f)
Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the same
instrument.
(g)
Entire
Agreement.
This
Agreement (including the applicable restricted stock agreements) sets forth
the
entire agreement and understanding of the parties in respect of the subject
matter contained herein, and supersedes all prior agreements (including the
prior employment agreement), promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of either party in respect of said subject
matter.
(i)
Headings
Descriptive.
The
headings of the several paragraphs of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction
of
any of this Agreement.
(j)
Capacity.
The
Executive represents and warrants that he is not a party to any agreement that
would prohibit him from entering into this Agreement or performing fully his
obligations hereunder.
IN
WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as
of the date first written above.
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EXECUTIVE:
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MEDIWARE INFORMATION SYSTEMS, INC: | |||
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By:
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||||
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Xxxx
Xxxxxxxx
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Name:
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Xxxxx
Xxxxxxx
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Title:
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President
& Chief Executive Officer
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