EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into on the 30th day of June, 1995, by and
between XXXXXX X. XXXXXXXX, whose address is 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000 (herein called the "Employee") and CSC
ACQUISITIONS, INC., an Alabama corporation ("CSC"), whose address is 0000
Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, CSC is engaged in the business of providing computerized
management information systems and services to physicians and other health
care providers; and
WHEREAS, CSC desires to obtain the services of the Employee as
President of CSC and the Employee is willing to render such services to CSC
upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. DUTIES AND SALARY.
(a) CSC agrees to employ the Employee and the Employee agrees to
accept employment by CSC on a full-time basis as President of CSC at a base
salary of $180,000.00 per year payable twice monthly during the Term of
Employment, as hereinafter defined. Such salary may be increased from time
to time in the discretion of the CSC Board of Directors.
(b) The Employee hereby agrees to undertake such travel as may be
required in the performance of his duties. The reasonable travel expenses
of the Employee shall be reimbursed in accordance with CSC's reimbursement
policy, in effect from time to time. The Employee shall not be required to
relocate from the Birmingham, Alabama area without his consent.
(c) The Employee shall carry out his duties under the general
supervision of the Board of Directors of CSC.
(d) The Employee's duties shall include the duties and
responsibilities identified on Schedule I attached hereto. The Employee
shall perform such other tasks and duties as may be assigned by CSC, from
time to time and CSC reserves the right to change the office and/or
position of the Employee within CSC, so long as such change is mutually
acceptable. The Employee shall devote his full time, attention, skill and
efforts to the tasks and duties assigned by CSC. The Employee shall not
provide services, for compensation, to any other person or business entity
while employed by CSC without the written consent of CSC.
(e) Effective on the date hereof, Employee shall be granted an
incentive stock option to purchase 22,000 shares of common stock of Xxxxxxx
Research Corporation which grant shall be by a separate option grant
agreement on the first day of employment hereunder, provided that if the
number of shares over which options may be exercised would exceed the
maximum number permitted for incentive stock options by the Internal
Revenue Code such excess shall be granted as non-statutory stock options
under the NRC Stock Option Plan by a separate option grant agreement on the
first day of employment hereunder which shall be subject to the same
vesting schedule as the incentive stock options.
2. TERM OF EMPLOYMENT. This Agreement was executed on the date of the
execution of that certain Asset Purchase Agreement by and among CSC,
Xxxxxxx Research Corporation ("NRC"), Computer Services Corporation and
Xxxxxx X. Xxxxx, Xx. (the "Purchase Agreement") and shall commence as of
the date of closing of the Purchase Agreement and shall end two (2) years
from such date of closing (the "Term of Employment"), unless terminated
earlier as provided in Section 3, below, or extended as provided in this
Section 2. Upon expiration of the initial Term of Employment, unless
earlier terminated as provided herein, the Employee's employment shall
continue automatically month-to-month until terminated by either party with
at least thirty (30) days' prior written notice with or without cause.
Until such closing, CSC shall incur no liability or obligation to Employee.
It shall be a condition subsequent to the effectiveness of this Agreement
that the Purchase Agreement is closed and consummated. In the event the
Purchase Agreement is not closed and consummated on or before September 1,
1995, either party may void and rescind this Agreement immediately upon
written notice to the other party, in which case it shall be as if this
Agreement was never executed.
3. TERMINATION BEFORE EXPIRATION OF TERM OF EMPLOYMENT. The termination
of the employment of the Employee during the initial Term of Employment
shall occur in one of the following ways:
(a) BY CSC, FOR CAUSE. Termination by CSC shall be deemed to be for
cause only upon:
(i) Employee's conviction of or pleading guilty to a felony;
(ii) Refusal or failure by the Employee, without reasonable
excuse or proper authorization, to carry out any reasonable
instructions of CSC consistent with Employee's rights or
duties as set forth in this Agreement;
(iii) Material breach of this Agreement or any material breach of
any agreement with CSC;
(iv) The Employee's demonstration of negligence or willful
misconduct in the execution of his duties, including without
limitation breach of fiduciary duty or the duty of loyalty
owed CSC.
If CSC intends to terminate for cause, CSC shall provide notice to
Employee of intent to terminate his employment, stating the termination
provision in this Agreement relied upon and setting forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination under the provisions so indicated, and shall provide Employee
with an opportunity to cure the alleged default or breach within thirty
(30) days of receipt of the notice, provided that if the matter is not
curable within such thirty (30) day period, the Employee shall not be
deemed in default if the Employee commences immediately to cure the matter
and proceeds diligently thereafter to complete the cure, further provided
that the alleged breach or default must be cured within ninety (90) days of
receipt of the notice. CSC shall not be required to give more than one
notice with respect to the same matter. Notwithstanding the foregoing, no
notice and no cure right shall be required with respect to termination for
cause under 3(a)(i) or an act involving theft of information or property of
CSC.
(b) BY EMPLOYEE, FOR GOOD REASON. Termination by the Employee shall
be deemed for good reason only because of a material breach by CSC of this
Agreement including, without limitation, making a material change in the
Employee's duties, responsibilities or authority as set forth in this
Agreement, without his express written consent. In all cases in which
Employee intends to terminate for Good Reason, the Employee shall provide
CSC with notice of intent to terminate this Agreement, stating the facts
and circumstances giving rise to a breach of this Agreement claimed to
provide a basis for termination under the provisions so indicated, and
shall provide CSC with an opportunity to cure the alleged default or breach
within thirty (30) days of receipt of the notice, provided that if the
matter is not curable within such thirty (30) day period, CSC shall not be
deemed in default if it commences immediately to cure the matter and
proceeds diligently thereafter to complete the cure, further provided that
the alleged breach or default must be cured within ninety (90) days of
receipt of the notice. Employee shall not be required to give more than
one such notice with respect to the same matter.
(c) DEATH OF THE EMPLOYEE.
(d) DISABILITY OF EMPLOYEE. If, during the Term of Employment, a
physician selected by mutual agreement of CSC and the Employee determines
that the Employee has become physically or mentally disabled so as to be
unable to carry out the normal and usual duties of his employment for three
(3) continuous months, and reasonable accommodation cannot be made to allow
the Employee to continue to perform his duties full-time, his employment
hereunder may be terminated at the election of CSC or the Employee.
4. SALARY AND BENEFITS UPON TERMINATION. Upon any termination of the
employment of Employee, the Employee shall be entitled only to the
following salary and benefits:
(a) If the termination is for any reason other than death or
disability, including, without limitation, by CSC for cause or by Employee
for good reason, CSC will pay the Employee within five (5) days after the
date of termination any unpaid salary prorated to the date of termination,
the amount of any accrued annual vacation pay to which he may be entitled
under CSC's vacation plan and benefits, with such compensation and benefits
(if any) paid only through the date termination occurs.
(b) In the event of the Employee's death or disability, the following
provisions will apply:
(i) Upon his death, the Employee's estate will be entitled to
receive the amount set forth in Section 4(a) and the
benefits set forth in any plans of CSC then in effect and
applicable under the circumstances. The Employee or his
estate shall be entitled to no other compensation or
benefits in the event of death.
(ii) Upon termination on account of disability, Employee will be
entitled to receive the amount set forth in Section 4(a) and
the benefits set forth in any plans of CSC then in effect
and applicable under the circumstances. The Employee or his
personal representative shall be entitled to no other
compensation or benefits in the event of disability.
(c) In the event the termination is by CSC for cause or by Employee
for good reason, or in the event of any breach of this Agreement by either
party, the parties respectively reserve any rights and remedies they may
have at law or equity, in addition to and not in lieu of the payments
called for in this Section 4. For all other terminations (other than for
cause or good reason or in the event of a breach), the amounts set forth
above in this Section 4 shall be paid and received in complete discharge of
any other obligation of CSC to Employee or Employee to CSC resulting from
termination of his employment.
5. FRINGE BENEFITS.
The Employee shall participate in any group health insurance, vacation
and sick leave plans, and other benefit plans available to all employees of
CSC in accordance with their terms and conditions which may be amended or
terminated by CSC at any time.
6. NON-DISCLOSURE COVENANTS AND PROPRIETARY MATTERS.
(a) Unless authorized or instructed in writing by CSC, the Employee
shall not, except as required in the conduct of CSC's business, during or
at any time after the Term of Employment, disclose to others, or use, any
of CSC's inventions or discoveries or its respective secret or confidential
information or data (oral, written, or in machine readable form) which the
Employee may obtain during the course of or in connection with the
Employee's employment (or employment or affiliation with any company that
transfers to CSC such information or data), including such inventions,
discoveries, information or data relating to machines, equipment, products,
systems, software, contracts, contract performance, research or
development, designs, computations, formulas, manufacturing procedures,
customer lists, and suppliers, whether or not developed by the Employee, by
others in CSC or obtained by CSC from third parties, and irrespective of
whether or not such inventions, discoveries, information, knowledge or data
have been identified by CSC as secret or confidential, unless and until,
and then to the extent and only to the extent that, such inventions,
discoveries, information, knowledge or data become available to the public
otherwise than by the Employee's act or omission.
(b) The Employee shall not, except as required in the conduct of
CSC's business, disclose to others, or use, any of the information (which,
if disclosed or used, could be harmful to CSC) relating to present and
prospective customers of CSC, business dealings with such customers,
prospective sales and advertising programs and agreements with
representatives or prospective representatives of CSC, present or
prospective sources of supply or any other business arrangements of CSC,
including but not limited to customers, customer lists, costs, prices and
earnings, whether or not such information is developed by the Employee, by
others in CSC or obtained by CSC from third parties, and irrespective of
whether or not such information has been identified by CSC as secret or
confidential, unless and until, and then to the extent and only to the
extent that, such information becomes available to the public otherwise
than by the Employee's act or omission.
(c) The Employee agrees to disclose immediately to CSC or any persons
designated by it and to assign to CSC or its successors or assigns, all
inventions made, discovered, or first reduced to practice by the Employee,
solely or jointly with others, during the Term of Employment or within a
period of six months from the date of termination of such employment
(either during or outside of the Employee's working hours and either on or
off CSC's premises), which inventions are made, discovered or conceived
either in the course of such employment, or with the use of CSC's time,
material, facilities or funds, or which are directly related to any
investigations or obligations undertaken by CSC; and the Employee hereby
grants and agrees to grant the right to CSC and its nominees to obtain, for
its own benefit and in its own name (entirely at its expense) patents and
patent applications including original, continuation, reissue, utility and
design patents, and applications, patents of addition, confirmation
patents, registration patents, xxxxx patents, utility models, and all other
types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Employee shall
assist CSC, at CSC's expense, without further charge during the term of the
Employee's employment, and after termination of the Employee's employment
at the same base salary rate (excluding any bonuses, incentive or deferred
compensation or other benefits and based upon a forty hour work week) as
during the last year of the Employee's employment (determined on an hourly
basis for this purpose), through counsel designated by CSC, to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for Letters Patent (of the United States or of any foreign
country), oaths, disclaimers or other instruments and to perform such
further acts, including giving testimony or furnishing evidence in the
prosecution or defense of appeals, interferences, suits and controversies
relating to any aforesaid inventions as may reasonably be deemed necessary
by CSC or its nominees to effectuate the vesting or perfecting in CSC or
its nominees of all right, title and interest in and to said inventions,
applications and patents.
(d) The Employee agrees to disclose immediately to CSC or any persons
designated by it and to assign to CSC, at its option, or its successors or
assigns, all works of authorship, including all writings, computer
programs, software, and firmware, written or created by the Employee solely
or jointly with others, during the course of his employment by CSC (either
during or outside of the Employee's working hours and either on or off
CSC's premises), which works are made or conceived either in the course of
such employment, or with the use of CSC's time, material, facilities or
funds, or which are directly related to any investigations or obligations
undertaken by CSC; and the Employee hereby agrees that all such works are
works made for hire, of which CSC is the author and the beneficiary of all
rights and protections afforded by the law of copyright in any and all
countries; and the Employee will assist CSC at CSC's expense without
further charges during the term of his employment, and after termination of
his employment at the same base salary rate (excluding any bonuses,
incentive or deferred compensation or other benefits) as during the last
year of his employment (determined on an hourly basis for this purpose
assuming a forty hour work week), through counsel designated by CSC, to
execute, acknowledge, and deliver all such further papers, including
assignments, applications for copyright registration (in the United States
or in any foreign country), oaths, disclaimers or other instruments, and to
perform such further acts, including giving testimony or furnishing
evidence in the prosecution or defense of appeals, interferences, suits and
controversies relating to any aforesaid works, as may be deemed necessary
by CSC or by its nominees to effectuate the vesting or perfecting in CSC or
its nominees of all rights and interest in and to said works and copies
thereof, including the exclusive rights of copying and distribution.
(e) The Employee shall keep complete, accurate and authentic
accounts, notes, data and records of all inventions made, discovered or
developed and all works of authorship written or created by the Employee as
aforesaid in the manner and form requested by CSC.
(f) All computer or other hardware, computer software, computer
programs, source codes, object codes, magnetic tapes, printouts, samples,
notes, records, reports, documents, customer lists, photographs, catalogues
and other writings, whether copyrightable or not, relating to or dealing
with CSC's business and plans, and those of others entrusted to CSC, which
are prepared or created by the Employee or which may come into his
possession during or as a result of his employment, are the property of
CSC, as applicable, and upon termination of his employment, the Employee
agrees to return all such computer software, computer programs, source
codes, object codes, magnetic tapes, printouts, samples, notes, records,
reports, documents, customer lists, photographs, catalogues and writings
and all copies thereof to CSC.
7. NON-SOLICITATION AND NON-COMPETITION. During the "Restriction Period"
(as hereinafter defined) and within the "Territory" (as hereinafter
defined), the Employee shall not directly or indirectly:
(a) Solicit the business of CSC from any customer of CSC or any
entity controlled by CSC.
(b) Directly or indirectly, hire any employees of CSC or any entity
controlled by CSC or cause any entity with which the Employee is affiliated
to hire any such employees of CSC. As used herein, the term "employees"
shall mean persons who are, at the time in question, current employees of
CSC or its affiliates or who were, within six (6) months of the date of the
prohibited hiring, employees of CSC or its affiliates.
(c) Engage in, represent in any way or be connected with, as a
consultant, officer, director, partner, employee, sales representative,
proprietor, member, stockholder (except for stock ownership of less than 1%
in a publicly owned corporation) or otherwise, any business competing with
the business of CSC as conducted by CSC on the date hereof or during the
period of Employee's employment by CSC.
As used herein, the Restriction Period shall mean the period while the
Employee is employed by CSC and one (1) year after the date the Employee
ceases to be employed by CSC. As used herein, the Territory shall mean the
States of Alabama, Mississippi, North Carolina, Florida and Georgia and any
other state in which CSC does business after the date hereof while Employee
is employed by CSC. As used herein, the term "business of CSC" shall mean
the business of providing computerized management information systems and
services to physicians and other health care providers.
8. NO CONFLICT. Employee represents and warrants that he is not a party
to or otherwise subject to or bound by the terms of any contract, agreement
or understanding which in any manner would limit or otherwise affect his
ability to perform his obligations hereunder, including without limitation
any contract, agreement or understanding containing terms and provisions
similar in any manner to those contained in Sections 6 and 7 hereof.
9. SURVIVAL OF COVENANTS, EFFECT.
(a) The covenants on the part of the Employee contained or referred
to in Sections 6 and 7 above shall survive termination of this Agreement,
and the existence of any claim or cause of action of the Employee against
CSC, whether predicated on this Agreement or otherwise. The Employee
agrees that a remedy at law for any breach of the foregoing covenants
contained or referred to in Sections 6 and 7 would be inadequate, that CSC
would suffer irreparable harm as a result and that CSC shall be entitled to
a temporary and permanent injunction or an order for specific performance
of such covenants without the necessity of proving actual damage to CSC and
without the posting of any bond or other security. Any nonmaterial breach
of this Agreement by CSC shall not release the Employee from his
obligations under Section 7 hereof. Any breach (whether or not material)
by CSC shall not release the Employee from his obligations under Section 6.
(b) The Employee hereby represents and acknowledges that CSC is
relying on the covenants in Sections 6 and 7 in entering into this
Agreement and that the restrictions in Sections 6 and 7 are fair and
reasonable. The Employee acknowledges that CSC presently intends to do
business throughout the United States and that the geographic scope of the
covenants in Section 7 is reasonable and necessary to protect the interests
of CSC.
(c) It is the intent of the parties that the provisions of Sections 6
and 7 shall be enforced to the fullest extent permissible under the laws
and public policies of each jurisdiction in which enforcement is sought.
If any particular provision of Sections 6 and 7 shall be adjudicated to be
invalid or unenforceable, such provision(s) of Sections 6 and 7 shall be
deemed amended to provide restrictions to the fullest extent permissible
and consistent with applicable law and policies, and such amendment shall
apply only with respect to the particular jurisdiction in which such
adjudication is made. If such deemed amendment is not allowed by the
adjudicating body, the offending provision, only, shall be deleted and the
remainder of Sections 6 and 7 shall not be affected.
10. ASSIGNMENT.
The rights and obligations of CSC under this Agreement may be assigned
or delegated by CSC to any affiliate of CSC or to any successors in
interest of CSC or of that part of the business of CSC to which this
Agreement applies so long as the duties of Employee are not materially
affected. Any other assignment of this Agreement shall require the written
consent of Employee. After the date hereof, CSC may change its name to
"Computer Services Corporation," and such name change shall not affect the
rights and duties of the parties hereto. This Agreement may not be
assigned and any duties of the Employee may not be delegated by the
Employee, but any amounts owing to the Employee upon his death shall inure
to the benefit of his estate.
11. NOTICES.
All notices or other communications which may be or are required to be
given, served or sent by either party to the other party pursuant to this
Agreement shall be in writing, addressed to its/his residence or place of
business as set forth above, and shall be mailed by first-class certified
mail, return receipt requested, postage prepaid, next-day air delivery, or
transmitted by facsimiles or hand delivery. Such notice or other
communication shall be deemed sufficiently given, served, sent or received
for all purposes at such time as it is delivered to the addressee or at
such time as delivery is refused by the addressee upon presentation. Each
party may designate by notice in writing an address to which any notice or
communication may thereafter be so given, served or sent.
12. APPLICABLE LAW JURISDICTION.
This Agreement has been negotiated and executed in the State of
Alabama, and it shall be governed by, construed and enforced in accordance
with the internal substantive laws and not the choice of law rules of the
State of Alabama.
13. EFFECTIVENESS/INTERPRETATION.
The parties acknowledge and agree that this Agreement has been
negotiated at arm's length between parties equally sophisticated and
knowledgeable in the matters dealt with herein. Each party has been
represented by counsel of its or his own choosing. Accordingly, any rule
of law or legal decision that would require interpretation of any
ambiguities in the Agreement against the party that drafted it is not
applicable and is waived.
14. SEVERABILITY.
If any of the articles, sections, paragraphs, clauses or provisions of
this Agreement shall be held by a court of last resort to be invalid, the
remainder of this Agreement shall not be affected thereby.
15. ENTIRE AGREEMENT.
The foregoing contains the entire agreement between the parties
relating to the subject matter of this Agreement, and may not be altered or
amended except by an instrument in writing approved by CSC and signed by
the parties hereto, and this Agreement supersedes all prior understandings
and agreements relating to employment of the Employee by CSC. The waiver
of any rights under this Agreement on any one or more occasions shall not
constitute a waiver on any subsequent occasion.
IN WITNESS WHEREOF, CSC has caused this Agreement to be executed by
its duly authorized officers and the Employee has hereunto set his hand as
of the date first above written.
CSC ACQUISITIONS, INC.
By: Xxxxx X. Xxxxxx
---------------------------
Its: President
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Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Employee
SCHEDULE I
DUTIES OF EMPLOYEE
Provide overall direction and management of CSC consistent with job title
and prior responsibilities and as required to support CSC's business plans
and long-term strategy.
