[Allscrips Pharmaceuticals, Inc. Letterhead]
May 1, 1995
Xx. Xxxx X. Xxxx
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxx:
In consideration for your agreement to the terms of the non-competition
agreement described below, Allscrips Pharmaceuticals, Inc. (the "Company") has
agreed to establish your severance arrangements following a change in control
and upon discharge or dismissal other than for cause.
Non-Competition Agreement
-------------------------
For a period of twelve (12) months following the termination of your
employment for any reason, including voluntary termination by you, you shall not
(i) directly or indirectly act in concert or conspire with any persons then
employed by the Company in order to engage in or have a financial or other
interest in any business which is a Direct Competitor; or (ii) serve as an
employee, agent, partner, shareholder or consultant for, or in any other
capacity participate, engage or have a financial or other interest in, any
business which is a Direct Competitor; provided, however, that you shall not be
prohibited from owning up to 2% of the outstanding shares of capital stock of a
company whose equity securities are registered under Section 12 of the
Securities Exchange Act of 1934. Direct Competitor shall mean any person or
entity engaged in the business of marketing or providing within the United
States prescription products or services or pharmacy benefit management products
or services that are at the time of determination competitive with the products
or services offered or planned to be offered by the Company, within twelve (12)
months following termination of your employment, including, without limitation,
prepackaged prescription products or services, point of care pharmacy dispensing
systems, mail service pharmacy products or services, prescription card services
or pharmaceutical delivery systems.
Severance
---------
Should you be discharged by the Company at any time after the date hereof
(other than at any time after a Change in Control) for any reason other than a
Dismissal or Discharge for Cause, you will receive for a period of twelve (12)
months, a monthly payment equal to the sum of (i) your then in-effect monthly
salary and (ii) one-twelfth (1/12) of the pro rata portion of any bonus paid or
payable for the prior year (with the pro rated portion being the product of (x)
the full bonus amount earned by you in the prior year and (y) the fraction the
numerator of which is
Xx. Xxxx X. Xxxx
May 1, 1995
Page 2
the number of full calendar months of the current year preceding the date of
termination of your employment and denominator of which is twelve (12)) (the
aggregate amount referred to in clause (ii) is referred to herein as the "Pro
Rata Bonus Amount") and health insurance coverage which is at least as favorable
to you as the health insurance coverage provided to senior executive employees
of the Company for such period. You shall be entitled to such payments whether
or not you obtain other employment and are compensated therefor, unless such
other employment constituted a violation of your agreement not to compete set
forth above. Dismissal or Discharge for Cause shall mean dismissal or discharge
for (i) the willful or grossly negligent failure by you to perform your duties
and obligations hereunder in any material respect (other than any such failure
resulting from your disability), (ii) conviction of a felony involving moral
turpitude which is injurious to the Company, (iii) violation of the law in
connection with your employment which is materially injurious to the Company,
monetarily or otherwise, or (iv) blatant and willful disregard by you of lawful
written directions from your superiors.
Should you be discharged by the Company within six (6) months of a Change
in Control, you will receive for a period of twelve (12) months, monthly
payments equal to the sum of (i) your then in-effect monthly salary and (ii)
one-twelfth (1/12) of the Pro Rata Bonus Amount and health insurance coverage
which is at least as favorable to you as the health insurance coverage provided
to senior executive employees of the Company for such period. You shall be
entitled to such payments whether or not you obtain other employment and are
compensated therefor, unless such other employment constituted a violation of
your agreement not to compete set forth above. Discharge by the Company for
purposes of the first sentence of this paragraph shall mean (i) termination of
your employment involuntarily (other than a Dismissal or Discharge for Cause) or
(ii) your voluntary termination following (A) a change in your position with the
Company which materially reduces your level of responsibilities or (B) a
material reduction in your overall level of compensation, provided and only if
such change or reduction is effected without your written consent. Change in
Control shall mean and be determined to have occurred upon any one of the
following events: (i) any person or entity becoming the owner, directly or
indirectly, of securities representing 35% or more of the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors other than a person or entity which as of
October 1, 1994, owned, directly or indirectly, such amount or more; provided,
however, that no Change in Control shall be deemed to have occurred if
immediately subsequent to an acquisition of securities, at least a majority of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors are owned,
directly or indirectly, by the persons who, immediately prior to such
acquisition, were the owners, directly or indirectly, of at least a majority of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors, in
substantially the same proportion; or (ii) (A) the Company shall be a party to a
merger or consolidation in which persons who were the owners, directly or
indirectly, of at least a majority of the combined voting power of the
outstanding voting securities of the Company entitled to vote generally in the
election of the directors immediately prior thereto do not own, directly or
indirectly, at least a majority of the combined voting power of the outstanding
voting securities of the Company entitled to vote generally in the election of
Xx. Xxxx X. Xxxx
May 1, 1995
Page 3
directors immediately subsequent thereto or (B) the Company shall sell all or
substantially all of its assets.
Accelerated Vesting
-------------------
All options granted to you by the Company will provide for accelerated
vesting upon the occurrence of the same events that require the Company to make
severance payments to you following a Change in Control. All such options will
be exerciseable for at least 90 days following your termination of employment
with respect to that portion of the option that was vested on the date of
termination of your employment.
Confirmation of Employee Non-Solicitation and Non-Disclosure Agreement
----------------------------------------------------------------------
Attached as Exhibit A hereto is a copy of the Employee Non-Solicitation and
Non-Disclosure Agreement entered into between you and the Company simultaneously
with, and in consideration of, this Agreement (the "Non-Disclosure Agreement").
The Company and you acknowledge and confirm the agreements contained herein are
in addition to the agreements in the Non-Disclosure Agreement and that the Non-
Disclosure Agreement supersedes any previous agreements between you and the
Company relating to the subject matter thereof.
Your countersignature of this letter agreement will signify your agreement
to its terms.
Very truly yours,
/s/ Xxxxxxx X. Xxxx
---------------------------------------
Xxxxxxx X. Xxxx
President-Chief Executive Officer
Allscrips Pharmaceuticals, Inc.
Accepted and Agreed to:
/s/ Xxxx X. Xxxx
--------------------------------
Xxxx X. Xxxx
Dated: 7/19/95
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