Certain confidential portions of this Exhibit were omitted by means of blackout of the text and replaced with an asterisk (*) (the “Mark”). This exhibit has been filed separately with the Securities and Exchange Commission without the Mark pursuant to...
Exhibit
10.31
Certain
confidential portions of this Exhibit were omitted by means of blackout of
the
text and replaced with an asterisk (*) (the “Xxxx”). This exhibit has been filed
separately with the Securities and Exchange Commission without the Xxxx pursuant
to the Company’s Application Requesting Confidential Treatment under Rule 24b-2
of the Securities Exchange Act of 1934.
This
Employment Agreement (this “Agreement”)
is
entered into by and between Eclipsys
Corporation,
a
Delaware corporation (the “Company”) and
Xxxx X. Xxxxx,
an
individual (the
“Executive”),
effective immediately upon the signatures of the parties below, with the
Executive’s employment commencing on January 9, 2006 (such commencement of
employment being the “Effective
Date”).
WHEREAS,
the Company desires to employ the Executive, and the Executive desires to be
employed by the Company, on the terms set forth herein;
NOW
THEREFORE, in consideration of the mutual covenants and promises contained
in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties to this Agreement,
the parties agree as follows:
Section
1
-
Employment.
| (a) |
The
Company shall employ Executive as of the Effective Date. Executive
will
serve as the Company’s Executive Vice President - Sales & Marketing,
and in that capacity shall (i) have the customary powers, responsibilities
and authorities of an executive officer of the Company and such other
powers, responsibilities and authorities as may be delegated to Executive
by the Company’s Chief Executive Officer (the “CEO”)
or the Company’s Board of Directors (the “Board”)
from time to time, and (ii) report to, and be subject to review and
control by, the CEO.
Executive
shall devote his reasonable best efforts to the performance of his
duties
and responsibilities hereunder.
|
| (b) |
Nothing
in this Agreement
shall preclude Executive from engaging in charitable and community
affairs; from managing any passive investment (i.e.,
an investment with respect to which Executive is in no way involved
with
the management or operation of the entity in which Executive has
invested)
made by him in publicly traded equity securities or other property
(provided that no such investment may exceed five percent (5%) of
the
equity of any entity, without the prior approval of the Board); or
from
serving as a member of boards of directors or as a trustee of any
other
corporation, association or entity, to the extent that any of the
above
activities do not interfere with his ability to discharge his duties
hereunder and the subject entity does not directly compete with the
Company, and provided that Executive will not serve as a director
of any
for-profit entity without approval of the
Board.
|
Section
2
- Term
of Employment.
Executive’s employment is at-will, subject to the severance benefits specified
herein. The period from the Effective Date until the date Executive’s employment
terminates is referred to herein as the “Term
of Employment”.
Section
3
- Compensation.
| (a) |
Salary.
During the period from the Effective Date through December 31, 2006
(the
“Initial
Period”),
the Company shall pay the Executive at the annualized rate of $450,000.00
(“Base
Salary”)
in accordance with the ordinary payroll practices of the Company,
and
subject to all applicable federal, state and local withholding and
reporting requirements.
The Executive’s Base Salary shall not be decreased during the Initial
Period. During the Term of Employment, the Board or the Compensation
Committee of the Board (the “Compensation
Committee”)
shall review, and may, subject to the immediately preceding sentence
and
subject to Executive’s right to terminate employment for Good Reason
pursuant to Section
6(a)
as
a result of any reduction in Base Salary, adjust the Executive’s Base
Salary annually, in accordance with the Company’s customary procedures and
practices for reviewing compensation of senior executives. In the
event
the Base Salary is so adjusted, the adjusted amount shall become
the Base
Salary for purposes of this
Agreement.
|
| (b) |
Bonus
Plan.
Executive shall be eligible to participate in the Company’s standard bonus
plan for executive officers, subject to all terms and conditions
of such
plan. The executive bonus plan will be established and may be modified
from time to time by the CEO, the Board or the Compensation Committee
of
the Board (the “Compensation
Committee”).
Executive’s annual target bonus will be $200,000 (the “Target
Bonus”),
but except as set forth in the following sentence no bonus payments
are
guaranteed and all bonus payments will be contingent upon achievement
of
such Company and individual performance targets and
management objectives (including objectives specific to Executive,
objectives common to other executives as well, and Company objectives)
as
may be established
by the CEO, the Board or the Committee.
However, notwithstanding the foregoing, without regard to Executive’s
performance against any bonus plan, Executive shall receive the Target
Bonus for 2006, payable $50,000
by April 15, 2006 if Executive is employed continuously as
the Company’s Executive Vice President from the Effective Date until March
31, 2006, and $150,000 at the time
2006 bonuses are paid to other executive officers and consistent
with the
ordinary payroll practices of the Company, if Executive is employed
continuously as
the Company’s Executive Vice President from the Effective Date
until
December 31, 2006.
The Board or Compensation Committee may provide in any year’s bonus plan
that Executive may earn more than the Target Bonus upon achievement
of
specified performance criteria, but in no event will Executive’s cash
bonus for any year exceed two times the Target Bonus. Executive’s bonuses
will be earned as of December 31 of each year, if and to the extent
that
performance criteria applicable to that year’s bonus plan are met, and
paid thereafter consistent with the timing of payment of bonuses
to other
executives. All
bonus payments shall be subject to all applicable federal, state
and local
withholding and reporting requirements.
|
Section
4
- Employee
Benefits.
| (a) |
Employee
Retirement Benefit Programs, Welfare Benefit Programs, Plans and
Practices.
The Company shall provide Executive with coverage during the Term
of
Employment under any retirement benefit programs, welfare benefit
programs, and other compensatory and benefit programs, plans and
practices, that the Company makes generally available to its senior
executives, including, but not limited to, its life and short- and
long-term disability insurance, hospitalization and major medical
insurance, the Company’s 401(k) Plan, Employee Stock Purchase Plan, dental
insurance, directors and officers liability insurance, and any other
nonqualified compensation program (including deferred compensation
or
supplemental retirement programs) as in effect from time to
time.
|
| (b) |
Vacation.
Executive shall be entitled to five
weeks of paid vacation each calendar year, which shall be taken at
such
times as are consistent with the Executive’s responsibilities hereunder;
provided, however, subject to applicable law, that the Executive
shall not
be entitled to carry over unused vacation from year to year in an
amount
exceeding that which the Executive would be entitled to carry over
in
accordance with the Company’s standard vacation policy as applied to
employees of the Executive’s longevity with the Company.
|
| (c) |
Stock
Options and Restricted Stock Grants.
As a material inducement to Executive’s entering into employment with the
Company, the Company is granting to Executive as inducement grants
under
NASD Rule 4350(i)(1)(A)(iv), effective as of the Effective Date,
(1) a
non-qualified stock option to purchase 400,000 shares of the Company’s
common stock at an exercise price equal to the closing price of the
common
stock on Nasdaq on the trading day immediately preceding the Effective
Date, and (2) a restricted stock grant of 100,000 shares of the Company’s
common stock, for which the Executive must pay an initial price of
$.01
per share (together, the “Initial
Grants”).
The terms of these stock options are specified in a Notice of Grant
being
issued to Executive and the Company’s 2005 Inducement Grant Stock
Incentive Plan, and the terms of these shares of restricted stock
are
specified a Restricted Stock Agreement between the Company and Executive,
a Notice of Grant being issued to Executive, and in the Company’s 2005
Inducement Grant Stock Incentive Plan (collectively, the “Equity
Documents”).
The forms of the Equity Documents are attached as Exhibits
A-1
through A-4
to
this Agreement. The Initial Grants are also subject to certain provisions
of this Agreement, and the Agreement re Specified Acts being entered
into
between the Company and Executive concurrently with this Agreement
in the
form of Exhibit
B
to
this Agreement (the “Agreement
re Specified Acts”).
The Initial Grants are considered to be multiple-year awards and
thus
regular additional annual equity awards should not be anticipated
even if
other executives receive annual equity
awards.
|
| (d) |
Other
Benefits.
Executive will be entitled to reimbursement of reasonable expenses
incurred by him for an annual physical examination, to the extent
such an
examination is not otherwise covered or provided by the health insurance
or health benefits provided by the Company to Executive pursuant
to
Section
4(a)
above; and reimbursement of up to $25,000 in legal expenses incurred
by
Executive in negotiation and preparation of his initial employment
documents, together with a gross-up if necessary so that net of any
income
taxes payable on reimbursement of such legal fees, Executive’s expense for
these legal expenses is effectively
covered.
|
Section
5
- Expenses.
Subject
to prevailing Company policy or such guidelines as may be established by the
CEO
or the Board or Compensation Committee from time to time, the Company shall
reimburse the Executive for all reasonable expenses incurred by the Executive
in
carrying out his duties.
Section
6
- Termination
of Employment.
| (a) |
Termination
Without Cause or Termination for Good Reason.
Subject
to Section
6(i),
if Executive’s employment is terminated by the Company for any reason
other than Cause (as defined in Section
6(c)),
Executive’s Disability (as defined in Section
6(e)),
or Executive’s death, or if Executive’s employment is terminated by
Executive for Good Reason (as defined in Section
6(a)(2)),
then the Company shall pay Executive (x) the Accrued Amounts (as
defined
below) and (y) subject to the limitations described in this Agreement,
the
Severance Package.
The payment of the Severance Package to Executive under this Section
6(a)
shall (i) be contingent upon the execution by Executive of a general
release in favor of the Company in substantially the form attached
hereto
as Exhibit
C,
provided that if changes or expansions of relevant laws and regulations
would result in Exhibit
C
in
the form thereof as of the date of this Agreement failing to achieve
the
intent thereof as reflected by the form thereof as of the date of
this
Agreement (the “Initial
Intent”),
and if it is possible to modify Exhibit
C
so
as to effect the Initial Intent notwithstanding such changes or expansions
of relevant laws or regulations, then Exhibit
C
will be modified to the extent necessary to preserve the Initial
Intent
(the “Release”);
(ii) constitute the sole remedy of Executive in the event of a termination
of Executive’s employment in the circumstances set forth in this
Section 6(a);
and (iii) be subject to the Agreement re Specified Acts. Except as
expressly provided herein or in the Agreement re Specified Acts or
in
another agreement between the Company and Executive, the Severance
Package
shall not be subject to any duty to mitigate damages by Executive,
nor any
set off or reduction due to Executive’s post-termination employment,
provided such post-termination employment does not contravene any
agreement between the Company and Executive. The Accrued Amounts
shall be
payable in a lump sum within ten (10) days of termination of employment,
or earlier if required by applicable
law.
|
|
(1)
|
For
purposes of this Agreement, the “Accrued
Amounts”
shall mean Executive’s earned but unpaid Base Salary, any declared but
unpaid bonus, any accrued but unused vacation and any other earned
but
unpaid amounts payable to him hereunder, in each case as accrued
through
the last day of his actual employment by the
Company.
|
|
(2)
|
For
purposes of this Agreement, a termination of employment by Executive
for
“Good
Reason”
shall be a termination by Executive following the occurrence of any
of the
following events unless the Company has cured as provided
below:
|
| (A) |
Subject
to Section
6(d)(2),
removal from the position of Executive Vice President of the Company
or
any material diminution in Executive’s duties, responsibilities,
authority, or participation in management, except for Cause or following
Executive’s death or Disability, provided that a change in Executive’s
duties that is approved by the Board or Compensation Committee and
that is
commensurate with his role as an Executive Vice President of the
Company
will not constitute Good Reason;
|
| (B) |
A
reduction in the Base Salary or Target Bonus then in effect or a
material
reduction in the other benefits provided to Executive by the Company;
|
| (C) |
Any
material breach by the Company of this Agreement or any other legal
obligation owed by the Company to
Executive;
|
| (D) |
Failure
of any successor of the Company to assume this Agreement as required
by
Section
11;
or
|
| (E) |
A
required relocation of Executive’s primary residence other than as
described in Section
8(c).
|
|
Executive
must notify the Company in writing specifically identifying any event
constituting Good Reason within thirty (30) days after Executive
becomes
aware of such event or such event shall not constitute Good Reason
for
purposes of this Agreement; provided that the Company shall have
thirty
(30) days from the date of such notice to cure the Good Reason event.
A
termination by Executive following cure shall not be a termination
for
Good Reason. A failure of Executive to notify the Company after the
first
occurrence of an event constituting Good Reason shall not preclude
any
subsequent occurrences of such event (or similar event) from constituting
Good Reason.
|
|
(3)
|
For
purposes of this Agreement, “Severance
Package”
shall mean:
|
| (A) |
Base
Salary continuation for eighteen (18) months following the date of
termination at Executive’s annual Base Salary rate in effect on the date
of termination, subject to all applicable federal, state and local
withholding and reporting requirements. These salary continuation
payments
shall be paid in accordance with usual Company payroll
practices.
|
| (B) |
A
bonus equal to one hundred fifty percent (150%) of Executive’s Target
Bonus in effect on the date of termination (but not less than $200,000),
payable in equal installments over the eighteen (18) month period
described in Section
6(a)(3)(A),
subject to the same withholding and reporting requirements. In addition,
to the extent not included in the Accrued Amounts, Executive shall
receive
a pro rata bonus for the bonus period during which the date of termination
occurs calculated at one hundred percent (100%) of the Target Bonus
then
in effect, multiplied by a fraction the numerator of which is the
number
of days that Executive was employed during such bonus term and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of executive
bonuses but with no additional performance requirements or contingencies.
|
| (C) |
For
the avoidance of confusion, the parties acknowledge that in the event
Executive terminates his employment for Good Reason as a result of
a
decrease in his Base Salary or Target Bonus as contemplated in clause
(B)
of Section
6(a)(2),
then the Base Salary and Target Bonus used for purposes of the calculation
of the Severance Package shall be the Base Salary and Target Bonus
in
effect immediately prior to such
reduction.
|
| (D) |
Executive
shall be entitled to twelve (12) months of vesting of all stock,
stock
options and other equity-based awards granted to him, including the
Initial Grants, in addition to vesting that had occurred at the date
of
termination (i.e.,
vesting as would have occurred if Executive had remained employed
until
the first anniversary of the date of termination of his employment),
provided (i) that if the Severance Package becomes payable as a result
of
a termination of employment occurring before June 1, 2006, then in
lieu of
the 12 months of vesting of restricted stock included in the Initial
Grants as described above, Executive shall be entitled to vesting
of 20%
of the restricted stock included in the Initial Grants, plus an additional
1.667% of the restricted stock included in the Initial Grants for
each
complete calendar month, if any, that elapses from the date of this
Agreement until the date of termination of employment, and (ii) provided
further that if the Severance Package becomes payable as a result
of a
termination of employment occurring before February 1, 2006, then
in lieu
of the 12 months of vesting of the stock options included in the
Initial
Grants as described above, Executive shall be entitled to vesting
of 20.0%
of the stock options included
in the Initial Grants.
|
| (E) |
Continuation
of benefits under any life, group health, and dental insurance benefits
substantially similar to those which Executive (and, if applicable,
his
family) was receiving immediately prior to termination of employment
until
the earlier of:
|
(i)the
end
of the eighteen (18) month period following the date of termination, or
|
(ii)
|
the
date on which Executive becomes eligible to receive substantially
similar
benefits under any plan or program of any other
employer.
|
The
continuing coverage provided under this Section
6(a)(3)(E)
is
subject to the availability of such continuation under the terms of the
applicable plan documents and all provisions of applicable law, including the
requirements of the federal “COBRA” law, 29 U.S.C. § 1161 et seq. with respect
to group health and dental insurance. If Executive is not eligible for such
continued coverage under one of the Company-provided benefit plans noted in
this
paragraph (E) that he was participating in during his employment, the Company
shall pay the Executive the cash equivalent of the cost of replacement insurance
for the duration of the applicable period, up to a maximum of the Company’s cost
of providing the coverage before the termination of employment, which payments
shall be made pro-rata in accordance with the Company’s customary payroll
practices.
|
(4)
|
To
the extent that this Employment Agreement is treated as a nonqualified
deferred compensation arrangement within the meaning of Section 409A
of
the Internal Revenue Code (“Section
409A”),
neither the Company nor Executive may accelerate the timing of the
payments under this Section
6(a)
(for example, no part of the Severance Package may be paid in a lump
sum
at the time of termination) unless such acceleration does not trigger
the
application of interest and penalty taxes under Section 409A. In
addition,
to the extent that this Employment Agreement is treated as a nonqualified
deferred compensation arrangement within the meaning of Section 409A
and
the Treasury Regulations under Section 409A require a delay in the
commencement of any payments under the Severance Package due to
Executive’s status as a “specified employee”, the Severance Package
payments shall be delayed to the minimum extent and in the minimum
amount
necessary so as to comply with the Code and any regulations thereunder
and
avoid interest and penalties, and otherwise paid on the schedule
set forth
in this Section
6(a).
|
| (b) |
Voluntary
Termination by Executive Without Good Reason.
If Executive terminates his employment with the Company without Good
Reason, then the Company shall pay Executive only the Accrued Amounts
in a
lump sum within ten (10) days of termination of employment, or earlier
if
required by applicable law. Retirement shall be considered a termination
of employment by Executive without Good
Reason.
|
| (c) |
Termination
for Cause.
If Executive’s employment is terminated for Cause, the Company shall pay
Executive only the Accrued Amounts in a lump sum within ten (10)
days of
termination of employment, or earlier if required by applicable law.
As
used herein, the term “Cause”
shall be limited to the following, and to the causes described in
Section
8(b):
|
|
(1)
|
Executive’s
conviction of or plea of guilty or nolo
contendere
to
a felony under the laws of the United States or any state thereof
or any
other jurisdiction in which the Company conducts
business;
|
|
(2)
|
Executive’s
willful misconduct or gross negligence in the performance of his
duties
that causes material harm to the
Company;
|
|
(3)
|
Executive’s
willful and continued failure to follow the reasonable and lawful
instructions of the Board;
|
|
(4)
|
Executive’s
willful and continued neglect of duties (other than any such neglect
resulting from incapacity of Executive due to physical or mental
illness);
or
|
|
(5)
|
a
material breach of this Agreement by
Executive;
|
provided,
however, that Cause shall arise under items (2), (3), (4) or (5) only following
thirty (30) days written notice thereof from the Company which specifically
identifies such misconduct, failure, neglect or breach and only if Executive
continues to engage in or fails to cure (if the misconduct, failure, neglect
or
breach can be cured) such misconduct, failure, neglect or breach during such
notice period. During any such notice period, Executive shall have the right
to
be heard by the Board and Cause shall not be deemed to exist without a finding
by a majority of the Board that Cause exists and, if the misconduct, failure,
neglect or breach can be cured, has not been cured during the thirty (30) day
cure period. A termination by the Company after cure shall not be a termination
for Cause. A failure of the Company to notify Executive after the first
occurrence of an event constituting Cause shall not preclude any subsequent
occurrences of such event (or similar event) from constituting
Cause.
| (d) |
Certain
Terminations Following a Change in Control.
Subject to Section
6(i),
in the event Executive’s employment with the Company or its successor
terminates by reason of a Qualifying Termination (as defined below)
within
two (2) years after a Change in Control of the Company (as defined
below)
that occurs during the Term of Employment, then the
Company shall pay to the Executive (x) the Accrued Amounts in a lump
sum within ten (10) days of termination of employment, or earlier if
required by applicable law, and (y) in lieu of the Severance Package,
and
subject to the limitations described in this Agreement, the Company
shall
provide the Executive the Change in Control Benefits (as defined
below).
The
provision of the Change in Control Benefits to Executive under this
Section
6(d)
shall (i) be contingent upon the execution by Executive of the Release
or
a release in another form reasonably acceptable to the Company and
Executive; (ii) constitute the sole remedy of Executive in the event
of a
termination of Executive’s employment in the circumstances set forth in
this Section 6(d);
and (iii) be subject to the Agreement re Specified Acts. In
addition, all payments under this Section
6(d)
are subject to the timing rules, calculations and adjustments described
in
Section 7.
Anything
in this Agreement to the contrary notwithstanding, if (q) a Change in
Control occurs, (r) Executive's employment with the Company is
terminated by the Company without Cause or by Executive for Good
Reason
within 180 days prior to the date on which the Change in Control
occurs,
and (s) it is reasonably demonstrated by Executive that such
termination of employment or events constituting Good Reason (u)
was at
the request of a third party who has taken steps reasonably calculated
to
effect a Change in Control or (v) otherwise arose in connection with
or in
anticipation of a Change in Control, then for all purposes of this
Agreement such Change in Control shall be deemed to have occurred
during
the Term of Employment and the termination shall be deemed to have
occurred after the Change in Control, so that Executive is entitled
to the
Change in Control Benefits. It is recognized that options and restricted
stock not vested at the time of or as a result of termination of
employment may be cancelled, and further that following such cancellation
Executive may become entitled to vesting of those cancelled stock
options
or shares of restricted stock in connection with a subsequent Change
in
Control pursuant to this section. In that case, the Company or its
successor shall deliver to Executive the consideration Executive
would
have received in the Change in Control for (i) the shares of restricted
stock that were cancelled as if those shares had been owned by and
fully
vested in Executive at the time of the Change in Control, less an
amount
equal to the product of $.01 per share and the number of such shares
to
represent the par value thereof; and (ii) the stock options that
were
cancelled as though such options had been vested at the time of the
Change
in Control, to the extent that unexercised vested stock options were
cashed out in the Change in Control, and otherwise for a number of
shares
of the Company’s common stock having a value at the time of the Change in
Control equal to the aggregate amount by which those stock options
were
in-the-money at the time of the Change in Control, using for purposes
of
this calculation the value of a share of the Company’s common stock in the
Change in Control transaction.
|
|
(1)
|
“Change
of Control Benefits”
shall mean:
|
|
(A)
|
Base
Salary continuation for twenty four (24) months following the date
of
termination at Executive’s annual Base Salary rate in effect on the date
of termination, subject to all applicable federal, state and local
withholding and reporting requirements. These salary continuation
payments
shall be paid in accordance with usual Company payroll
practices;
|
|
(B)
|
A
bonus equal to two hundred percent (200%) of Executive’s Target Bonus in
effect on the date of termination, payable in equal installments
over the
twenty four (24) month period described in Section 6(d)(1)(A),
subject to the same withholding and reporting requirements. In addition,
to the extent not included in the Accrued Amounts, Executive shall
receive
a pro rata bonus for the bonus period during which the date of termination
occurs calculated at one hundred percent (100%) of the Target Bonus
then
in effect, multiplied by a fraction the numerator of which is the
number
of days that Executive was employed during such bonus term and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of executive
bonuses but with no additional performance requirements or
contingencies;
|
|
(C)
|
Acceleration
in full of the vesting of all stock, stock
options and other equity-based awards granted to him, including the
Initial Grants;
and
|
|
(D)
|
Continuation
of life, group health and dental insurance benefits substantially
similar
to those which Executive (and, if applicable, his family) was receiving
immediately prior to the Qualifying Termination until the earlier
of:
|
|
(i)
|
the
end of the twenty four (24) month period following Executive’s termination
of employment, or
|
|
(ii)
|
the
date on which Executive becomes eligible to receive substantially
similar
benefits under any plan or program of any other
employer.
|
The
continuing coverage provided under this Section 6(d)(1)(D)
is
subject to the availability of such continuation under the terms of the
applicable plan documents and all provisions of applicable law. If Executive
is
not eligible for such continued coverage under one of the Company-provided
benefit plans noted in this paragraph (D) that he was participating in during
his employment, the Company shall pay Executive the cash equivalent of the
cost
of replacement insurance for the duration of the applicable period, up
to a
maximum of the Company’s cost of providing the coverage before the termination
of employment, which
payments shall be made pro-rata in accordance with the Company’s customary
payroll practices.
|
(2)
|
Qualifying
Termination.
For purposes of this Agreement, the term “Qualifying
Termination”
means a termination by the Company or its successor of Executive’s
employment with the Company or its successor for any reason other
than
Cause, Disability or death, or a termination by
|
Executive
of Executive’s employment with Good Reason. However, if following a Change in
Control the Company or its successor in the Change in Control offers to retain
Executive in a Comparable Position, then Executive shall not be entitled to
resign his employment for Good Reason pursuant to Section
6(a)(2)(A).
For
these
purposes, “Comparable
Position”
means
(i) Executive Vice President of the successor organization or the portion of
the
successor organization that succeeds to the business of the Company (whether
organized as a subsidiary, division, or otherwise) (in either case, the
“Successor
Business”),
or if
the Successor Business does not use that title, then a title within the
Successor Business’s organizational structure that is comparable to Executive
Vice President in the Company’s organizational structure, with duties,
responsibilities, authority and participation in management commensurate with
that role, if (A) the Successor Business is the natural successor to the
business of the Company following the Change in Control and continues in the
same basic business as the Company; and (B) Executive’s role with the Successor
Business would not result in a material diminution of the substantive
operational scope of Executive’s role from the substantive operational scope of
his role with the Company. In each case, it is recognized that following a
Change in Control, the evolution of the Company to the Successor Business can
result in various changes resulting from integration, efforts to capture synergy
opportunities or address new markets, and changes in business strategy, and
as a
result Executive’s duties, responsibilities, authority or participation in
management in a Comparable Position may not be exactly the same as his duties,
responsibilities, authority or participation in management with the Company
prior to the Change in Control. However, whether a role with the successor
offered to Executive qualifies as a Comparable Position will be judged with
a
view to the overall quality of the opportunity represented by that role from
a
professional point of view, with the understanding that the intention of this
Agreement is that a Comparable Position, in light of all relevant factors
including the size and complexity of the successor organization, would not
represent a material diminution to Executive in the overall quality of his
professional stature, experience and opportunity compared to the professional
stature, experience and opportunity represented by Executive’s role with the
Company.
|
(3)
|
Change
of Control Defined.
For purposes of this Agreement, a “Change
of Control”
shall have the meaning set forth in Exhibit D.
|
|
(4)
|
To
the extent that this Employment Agreement is treated as a nonqualified
deferred compensation arrangement within the meaning of Section 409A,
neither the Company nor Executive may accelerate the timing of the
payments under this Section
6(d)
(for example, no part of the Change in Control Benefits may be paid
in a
lump sum at the time of termination) unless such acceleration does
not
trigger the application of interest and penalties under Section 409A.
In
addition, to the extent that this Agreement is treated as a nonqualified
deferred compensation arrangement within the meaning of Section 409A
and the Treasury Regulations issued under Section 409A require a
delay in the commencement of any payments under the Change in Control
Benefits due to Executive’s status as a “specified employee”, the Change
in Control Benefit payments shall be delayed to the minimum extent
necessary so as to comply with the code and any regulations thereunder
and
to avoid interest and penalties, and otherwise paid on the schedule
set
forth in this Section
6(d).
|
| (e) |
Disability.
In the event that Executive suffers a Disability, the Company may,
in its
discretion, terminate Executive’s employment hereunder. For purposes of
this Agreement, “Disability”
shall be defined to occur at such time as Executive becomes eligible
to
receive benefits under the terms of the Company’s then applicable
long-term disability policy, or, in the absence of such policy, shall
be
defined as a physical or mental disability that prevents Executive
from
performing his duties under this Agreement for ninety (90) consecutive
days or more, or for an aggregate of one hundred twenty (120) days
in any
period of twelve (12) months. The Company may only terminate Executive
on
account of Disability after giving due consideration to whether reasonable
accommodations can be made under which Executive is able to fulfill
his
duties under this Agreement. The commencement date and expected duration
of any physical or mental condition that prevents Executive from
performing his duties hereunder shall be determined by a medical
doctor
mutually acceptable to Executive and the Company. In the event Executive’s
employment is terminated by the Company pursuant to this Section
6(e),
then the Company shall pay Executive only the Accrued Amounts in
a lump
sum within ten (10) days of termination of employment, or earlier
if
required by applicable law.
|
| (f) |
Death.
In the event of Executive’s death during the Term of Employment, all
obligations of the Company to make any further payments, including
the
obligation to pay the Accrued Amounts, shall be paid to Executive’s
estate, and in any event all Accrued Amounts shall be paid in a lump
sum
within ten (10) days of the Executive’s death, or earlier if required by
applicable law. In addition, to the extent not included in the Accrued
Amounts, Executive’s estate shall receive a payment or payments reflecting
a pro rata bonus for Executive for the bonus period during which
the date
of termination pursuant to this Section
6(f)
occurs calculated at one hundred percent (100%) of the Target Bonus
then
in effect, multiplied by a fraction the numerator of which is the
number
of days that Executive was employed during such bonus term and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of executive
bonuses but with no additional performance requirements or contingencies,
provided, however, that to the extent that this Agreement is treated
as a
nonqualified deferred compensation arrangement within the meaning
of
Section 409A, the payment of such bonus may not be accelerated by
either
the Company or Executive unless such acceleration does not trigger
the
application of interest and penalty taxes under Section 409A.
|
| (g) |
Payments
as Compensable Compensation.
Any participation by Executive in, and any terminating distributions
and
vested rights under, Company-sponsored retirement or deferred compensation
plans, regardless of whether such plans are qualified or nonqualified
for
tax purposes, shall be governed by the terms of those respective
plans.
|
| (h) |
Executive’s
Duty to Provide Materials.
Upon the termination of the Term of Employment for any reason, Executive
or his estate shall surrender to the Company all computer files and
electronic data and records, correspondence, letters, files, contracts,
mailing lists, customer lists, advertising material, ledgers, supplies,
equipment, checks, and all other materials and records of any kind
that
are the property of the Company or any of its subsidiaries or affiliates,
that may be in Executive’s possession or under his control, including all
copies of any of the foregoing.
|
| (i) |
Certain
Contingencies and Limitations.
|
|
(1)
|
Notwithstanding
anything herein to the contrary, Executive may lose his rights to
the
Severance Package or the Change in Control Benefits pursuant to the
Agreement re Specified Acts.
|
|
(2)
|
As
of the date of any termination of employment as a result of which
Executive would be entitled to either (i) the Severance Package or
(ii)
the Change in Control Benefits, the Company shall calculate the Total
Equity Value, and for each Dollar by which the Total Equity Value
exceeds
$4.0 million, the amount of cash severance otherwise payable to Executive
as part of the Severance Package or Change in Control Benefits will
be
reduced by one Dollar, with the total amount of such reductions spread
evenly over the term that such cash severance would otherwise be
payable.
In addition, as of the date of any termination of employment as a
result
of which Executive would be entitled to the Severance Package (but
not as
a result of which Executive would be entitled to Change in Control
Benefits), the Company shall calculate the Vested Equity Value, and
for
each Dollar by which the Vested Equity Value exceeds $4.0 million,
the
accelerated vesting of the Initial Grants or other stock options,
restricted stock or other equity-based awards that would otherwise
occur
as a part of the Severance Package or pursuant to any plan or agreement
governing such awards will be reduced by one Dollar in value, with
such
reductions coming first from stock options and then from restricted
stock
and then from other awards, and with such reductions measured by
the gross
spread on options that would otherwise accelerate and the gross value
of
shares of restricted stock or other awards that would otherwise
accelerate. For these purposes, “Vested
Equity Value”
means (i) the value of vested restricted stock and other vested awards
(other than stock options) owned beneficially by Executive, plus
(ii) the
spread on vested stock options owned beneficially by Executive, plus
(iii)
the gross proceeds received by Executive or his transferee from sales
of
restricted stock and payment of other awards (other than stock options)
in
the four-year period ending on the date of termination of employment,
plus
(iv) the amount by which gross proceeds from sales by Executive or
his
transferee, in the four-year period ending on the date of termination
of
employment, of shares obtained upon exercise of stock options exceeded
the
exercise price thereof, plus (v) the amount by which the value of
shares
obtained upon exercise of stock options and still beneficially owned
by
Executive or his transferee exceeds the exercise price paid for those
shares. “Total
Equity Value”
means Vested Equity Value plus (i) the value of restricted stock
and other
awards (other than stock options) that would vest as a part of Severance
Package or Change in Control Benefits, plus (ii) the spread on stock
options that would vest as a part of Severance Package or Change
in
Control Benefits, calculated as the aggregate of the amount by which
the
value of a share of stock issuable upon exercise of each stock option
vesting as part of the Severance Package or Change in Control Benefits
exceeds the exercise price payable therefor. Measures of value of
stock
options, restricted stock and other awards will be taken at fair
market
value on the date of termination of
employment.
|
|
(3)
|
If
any Change in Control occurs within 365 days following the date of
this
Agreement, or a definitive agreement for a Change in Control is
signed
within 365 days following the date of this Agreement and pursuant
to that
definitive agreement a Change in Control is subsequently consummated
within 180 days following the execution thereof, and in connection
with
that Change in Control a Qualifying Termination occurs so that Executive
would be entitled to the Change in Control Benefits, then notwithstanding
any other provision of this Agreement or any other agreement between
Executive and the Company or any plan pursuant to which equity awards
are
made to Executive, the Total Realization shall not exceed the Special
Limit. If the Total Realization would otherwise exceed the Special
Limit,
then the Change in Control Benefits other than continuation of insurance
benefits shall be reduced to the extent necessary to limit the Total
Realization to the Special Limit, first by reduction of the continuation
of salary, then if necessary by reduction of the continuation of
bonus,
then if necessary by reduction of acceleration of vesting of stock
options, then if necessary by reduction of acceleration of vesting
of
restricted stock, and finally if necessary by reduction of vesting
of any
other awards. However, if the Total Realization exceeds the Special
limit
without any Change in Control Benefits, the Executive will not be
required
to make any payment to the Company in respect of that excess. For
these
purposes,
(i) “Total
Realization”
means the
sum of the Total Equity Value plus all cash payable as part of the
Change
in Control Benefits (but excluding the value of continuation of insurance
benefits);
(ii) “Special
Limit”
means $5.0 million; and (iii)
the value of the Change in Control Benefits shall be the gross amount
of
salary continuation and bonus continuation, the
gross spread on stock options that would vest as a part of the Change
in
Control Benefits, and the gross value of restricted stock and other
awards
(other than stock options) that would vest as a part of the Change
in
Control Benefits. Measures of value of stock options, restricted
stock and
other awards will be taken at fair market value on the date of termination
of employment.
|
Section
7 - Gross-up
Payments.
|
(a)
|
If
Executive becomes obligated to pay any excise tax on excess parachute
payments under Section 4999 of the Internal Revenue Code of 1986,
as
amended (the "Code") or any similar or successor law or
regulation, whether as a result of benefits provided to Executive
under
this Agreement or another agreement by or plan of the Company,
the Company
shall pay an additional amount (the "Gross-Up Payment")
to Executive at the time specified in the following paragraph.
The
Gross-Up Payment shall be equal to the amount necessary so that
the net
amount retained by Executive, after subtracting the parachute excise
tax
imposed by Section 4999 of the Code or any successor statute then in
effect (the "Excise Tax"), and after also subtracting all
federal, state or local income tax, FICA tax and Excise Tax on
the
Gross-Up Payment, shall be equal to the net amount Executive would
have
retained if no Excise Tax had been imposed and no Gross-Up Payment
had
been paid. The amount of the Gross-Up Payment shall be determined
in good
faith by independent accountants or tax counsel selected by the
Company
and acceptable to Executive, who shall apply the following assumptions:
(i) Executive shall be treated as paying federal income taxes at
the
highest marginal rate in the calendar year in which the Gross-Up
Payment
is made, and (ii) Executive shall be treated as paying state and
local
income taxes at the highest marginal rate(s) in the calendar year
in which
the Gross-Up Payment is made in the locality of Executive's residence
as
of the effective date of Executive's termination or resignation,
net of
the maximum reduction in federal income taxes that could be obtained
from
deducting those state and local taxes.
|
|
(b)
|
The
Gross-Up Payment shall be made within thirty days after the event
that
triggered the Company’s obligation to provide the benefits upon which
taxes as described in this Section
7
are payable (the “Triggering
Event”),
provided that if the Gross-Up Payment cannot be determined within
that
time, the Company shall pay Executive within that time an estimate,
determined in good faith by the Company, of the minimum amount
of the
Gross-Up Payment and shall pay the remainder
(plus interest at the rate provided in Section 1274(b)(2)(B) of
the Code)
as soon as the amount can be determined but in no event later than
the
60th day after the Triggering Event. If the estimated payment is
more than
the amount later determined to have been due, the excess (plus
interest at
the rate provided in Section 1274(b)(2)(B) of the Code) shall be
repaid by
Executive within five business days after written
demand.
|
|
(c)
|
If
the actual Excise Tax imposed is less than the amount that was
taken into
account in determining the amount of the Gross-Up Payment, Executive
shall
repay at the time that the amount of the reduced Excise Tax is
finally
determined the portion of the Gross-Up Payment attributable to
that
reduction (plus the portion of the Gross-Up Payment attributable
to the
Excise Tax, FICA tax and federal, state and local income tax imposed
on
the portion of the Gross-Up Payment being repaid by Executive,
to the
extent the repayment results in a reduction in or refund of the
Excise
Tax, FICA tax or federal, state or local income tax), plus interest
on the
amount of the repayment at the rate provided in Section 1274(b)(2)(B)
of
the Code. If the actual Excise Tax imposed is more than the amount
that
was taken into account in determining the amount of the Gross-Up
Payment,
the Company shall make an additional gross-up payment in respect
of such
excess (plus interest at the rate provided in Section 1274(b)(2)(B)
of the
Code) at the time that the amount of the excess is finally
determined.
|
|
(d)
|
Notwithstanding
anything to the contrary herein, the parties agree that if the payments
under this Section
7
are treated as nonqualified deferred compensation under Section 409A
of
the Code, the parties will negotiate
this section in good faith to avoid adverse tax consequences to
Executive
|
Section
8
- Other
Agreements.
|
(a)
|
Non-Solicitation;
Non-Disclosure, etc.
In consideration for the provisions of this Agreement, among other
things,
Executive is separately entering into a Confidentiality, Non-Disclosure
and Developments Agreements in the form of Exhibit
E
(the “Confidentiality
Agreement”).
|
|
(b)
|
No
Violation of Other Agreements.
Executive hereby represents that he is not bound by the terms of
any
agreement with any previous employer or other party to refrain from
using
or disclosing any trade secret or confidential or proprietary information
in the course of his employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous
employer or any other party, except for any such agreement that could
not
reasonably be expected to compromise Executive’s ability to perform his
duties to the Company as contemplated by this Agreement. Executive
further
represents that, to his knowledge and belief, he has not breached
any
agreement not to compete or any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence
or in trust prior to his employment with the Company, and Executive
acknowledges the Company’s desire and direction that he not breach any
such agreement in the performance of his services hereunder. Accordingly,
the Company agrees that any failure or refusal of the Executive to
perform
his duties to the Company as contemplated by this Agreement shall
not
constitute “Cause” to the extent such failure or refusal is attributable
to the Executive’s compliance with any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence
or in trust prior to his employment with the Company. Without limiting
the
foregoing, Executive has provided to Eclipsys an executed copy of
an
Agreement Respecting Non-disclosure, Non-competition and Non-solicitation
with his immediately preceding employer. Executive represents that
this
agreement is the only agreement he has entered into with his immediately
preceding employer and the only such restrictive agreement in effect
with
any prior employer. Executive acknowledges that under the terms of
that
agreement, he is required to maintain certain confidential information,
which covenant he shall honor in his employment with the Company.
In
connection with any new duties he undertakes for Eclipsys, Executive
will
use his best efforts to maintain such confidentiality and notify
Eclipsys
when, in his judgment, he believes that any assigned task might cause
a
breach of such covenants. [ * ]
|
| (c) |
Headquarters
and Location and Travel.
Executive
currently resides in Atlanta, Georgia. The
Company does not have a conventional headquarters due to distribution
of
its executive management. The Board and CEO will consider establishing
a
conventional headquarters, and if
the Company establishes a conventional headquarters and the CEO or
the
Board determines that Executive’s relocation to that headquarters would be
in the Company’s best interests, then Executive may be required to
relocate his residence to the area in which the headquarters is located.
If Executive is required to relocate, the Company shall provide him
with
executive-level relocation benefits, consistent with Company policies,
designed to defray all reasonable out-of-pocket costs of the relocation
incurred by Executive, provided that Executive will not be entitled
to any
adjustment to his compensation to defray any increase in his cost
of
living resulting from relocation. If Executive does not wish to relocate,
and consequently he resigns or the Company terminates his employment,
he
will not be entitled to any severance benefits (including without
limitation the Severance Package or the Change in Control Benefit,
each as
defined in Article
6),
except that if this occurs before his first-year guaranteed bonus
is paid
in full then he will be entitled to any portions of his guaranteed
first
year bonus that have not been paid. Whether or not Executive relocates
his
residence, Executive must spend significant time traveling, as is
consistent with his role and necessary or appropriate to execute
fully his
responsibilities.
|
| (d) |
Registration.
Executive will use reasonable efforts to utilize the safe harbor
provided
by Rule 144 under the Securities Act of 1933 to exempt from registration
sales by Executive of shares derived from the Initial Grants. If
and to
the extent that Executive cannot implement and execute a plan to
achieve
reasonable liquidity from sales of shares derived from the Initial
Grants
pursuant to Rule 144, the Company will use reasonable efforts to
provide
an effective registration statement to cover sales by Executive of
such
shares, provided that Executive and the Company will cooperate to
determine timing and duration for such registration that is not adverse
to
the Company’s interests.
|
| (e) |
Conduct.
Executive will observe the Company’s policies, conduct himself in a manner
befitting an executive officer of a public company, and provide reasonable
cooperation with legal authorities in any investigation or proceeding
involving the Company or his service to the Company, to the extent
legally
required or reasonably directed by the
Board.
|
*
Confidential Treatment Requested
Section
9
- Notices.
All
notices or communications hereunder shall be in writing, addressed as
follows,
or
otherwise as directed in a written notice from the party wishing to make changes
hereto:
To
the
Company: Eclipsys
Corporation
ATTN:
CEO
Address,
Telephone and Facsimile numbers then listed in the Company’s directory
with
a
copy to: the
Company’s General Counsel
Address,
Telephone and Facsimile numbers then listed in the Company’s directory
To
the
Executive: To
the
address, telephone number and facsimile number then reflected in the Company’s
payroll records
With
a
copy to: [
*
]
Any
such
notice or communication shall be delivered by hand or sent certified or
registered mail, return receipt requested, postage prepaid, or by reputable
overnight courier addressed as above (or to such other address as such party
may
designate in a notice duly delivered as described above), and the time of actual
delivery, if delivered by hand, the next business day, if sent by overnight
courier, or the third (3rd)
business day after the actual date of mailing, if sent by mail, shall constitute
the time at which notice was given.
*Confidential
Treatment Requested
Section
10
- Severability.
If any
part of this Agreement as applied to any party or to any circumstance is
adjudged by a court of competent jurisdiction to be invalid, illegal, void
or
unenforceable for any reason, then (i) the invalidity of that part shall in
no
way affect (to the maximum extent permissible by law) the application of such
part under circumstances different from those adjudicated by the court, the
application of any other part of this Agreement, or the enforceability or
invalidity of this Agreement as a whole; and (ii) such part shall be deemed
amended to the extent necessary to conform to applicable law so as to be valid,
legal, effective and enforceable or, if such part cannot be so amended without
materially altering the intention of the parties, then such part will be
stricken and the remainder of this Agreement shall continue in full force and
effect.
Section
11
- Assignment
and Assumption.
This
Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of Executive and the assigns and successors of the Company,
but
neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive (except by will
or
by operation of the laws of intestate succession) or by the Company, except
that
the Company may assign this Agreement to any successor (whether by merger,
purchase or otherwise) to all or substantially all of the stock, assets or
business of the Company and shall cause such successor to assume this Agreement,
which assumption shall not relieve the Company of its obligations to Executive
hereunder unless so agreed in writing by Executive. The Company’s successor, or
the Company’s assignee following such an assignment, shall have all the rights
of the Company hereunder, and Executive’s obligations hereunder will be to the
successor or assignee thereafter.
Section
12
- Amendment.
This
Agreement may only be amended by written agreement of the parties
hereto.
Section
13
-
Survivorship.
The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of this Section
13
are in
addition to the survivorship provisions of any other section of this
Agreement.
Section
14
- Governing
Law; Venue and Jurisdiction.
This
Agreement shall be governed by and construed under and in accordance with the
laws of the State of Florida (without reference to the conflicts of law
provisions thereof). Subject to the following sentence, if any judicial or
administrative proceeding or claim relating to or pertaining to this Agreement
is initiated by either party hereto, such proceeding or claim shall and must
be
filed in a state or federal court located in Palm
Beach County or Miami-Dade County,
Florida,
and the Company and Executive each consents to the jurisdiction of such a court.
If Executive brings any judicial or administrative proceeding or claim relating
to or pertaining to his right to receive payment or provision of compensation
(including without limitation salary, bonuses or equity-based awards) or
benefits from the Company, other than a claim arising in connection with the
Company’s enforcement of its rights under the Agreement re Specified Acts, such
proceeding or claim may, in Executive’s discretion, be filed in a state or
federal court located in district in which Executive then resides, and if so
filed the Company and the Executive each consents to the jurisdiction of such
a
court, which shall be the exclusive jurisdiction therefor, and the Company
shall
not contest such jurisdiction or seek to remove the matter to any other
jurisdiction.
Section
15
- Prior
Agreement; Coordination of Benefits.
This
Agreement including the exhibits hereto, and the indemnity provisions of the
Company’s charter to the extent applicable, contain the entire understanding
between the parties hereto regarding terms of Executive’s employment (other than
any agreements that may be entered into after the date hereof between the
Company and Executive) and supersedes in all respects any prior or other
employment agreement or understanding, both written and oral. In the event
of a
conflict between this Agreement and any policy or plan that applies generally
to
employees or executives of the Company regarding compensation, employee
benefits, performance bonuses, healthcare, retirement, severance, change in
control, relocation, or equity programs such as Restricted Stock or Option
awards, this Agreement shall control unless the generally applicable plan or
program would provide a greater benefit or award to Executive, in which case
the
terms of such plan or program shall control over this Agreement.
Section
16
- Withholding.
The
Company shall be entitled to withhold from payment any amount of withholding
required by law.
Section
17
- Section
Headings and Construction.
The
headings of sections in this Agreement are provided for convenience only and
will not effect its construction or interpretation. All references to “Sections”
or “Exhibits” refer to the corresponding section or exhibit of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as circumstances require.
Section
18
- Counterparts.
This
Agreement may be executed in one (1) or more counterparts, each of which will
be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same Agreement.
Section
19
- Acknowledgement.
Executive states and represents that he has had an opportunity to fully discuss
and review the terms of this Agreement including its exhibits with an attorney.
Executive further states and represents that he has carefully read this
Agreement including its exhibits, understands the contents herein, freely and
voluntarily assents to all of the terms and conditions hereof, and signs his
name of his own free act.
Section
20
- Attorneys’
Fees.
In
the
event that either party brings a legal action against
the other in connection with the employment relationship between them, including
without limitation an action to
enforce this Agreement or any of the exhibits hereto, the party, if either,
that
is judicially determined to be the prevailing party in such action shall be
entitled to recover his or its reasonable attorney’s fees and legal costs
incurred in connection with such action.
Intending
to be immediately legally bound hereby, the parties have executed this Agreement
on the date beside their respective signatures.
|
Date:
December 22, 2005
ECLIPSYS
CORPORATION
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Secretary
|
Date:
December 22, 2005
/s/
Xxxx X. Xxxxx
Xxxx
X. Xxxxx
|
EXHIBIT
A-1 TO EMPLOYMENT AGREEMENT
Notice
of
Grant of Stock Option
|
Notice
of Grant of Stock Option
Employee
|
Eclipsys
Corporation
ID:
00-0000000
|
|
Xxxx
X. Xxxxx
«StreetAddress»
«CityStateZip»
|
Option
Number: «OptionNumber»
Plan: 2005
Inducement Grant
Stock
Incentive Plan
Employee
ID: «IDNumber»
|
|
Effective
January __, 2006 (the “Grant
Date”),
you have been granted a non-statutory option to buy 400,000 shares
of
common stock of Eclipsys Corporation (the "Company")
at an exercise price of $_________ per share. This option will vest
and
become exercisable with respect to 20% of the underlying shares on
February 1, 2007 (the “First
Vesting Date”);
and (ii) with respect to the remaining 80% of the underlying shares
in 48
equal consecutive monthly installments on the first day of each calendar
month following the First Vesting Date, provided that vesting will
not
occur if you are not employed with the Company (as defined in the
Plan)
(or serving as a member of the Company’s Board of Directors) on the
scheduled vesting date.
The
option is granted under and governed by the terms and conditions
of this
Notice, the Company's 2005 Inducement Grant Stock Incentive Plan
(the
“Plan”),
the Employment Agreement between you and the Company dated January
__,
2006 (the “Employment
Agreement”),
the Agreement re Specified Acts between you and the Company dated
January
__, , 2006 (the “Agreement
re Specified Acts”),
and any other applicable written agreement between you and the Company.
The agreements referenced in this paragraph are referred to in this
Notice
as the “Applicable
Agreements.”
By your acceptance of this option, and also by its exercise, you
agree to
such terms and conditions and confirm that your receipt and exercise
of
this option is voluntary.
Unless
otherwise provided in the Plan or the Applicable Agreements,
(i) no
vesting will occur before the First Vesting Date; (ii) vesting will
occur
only on scheduled vesting dates, without any ratable vesting for
periods
of time between vesting dates; (iii)
notwithstanding
the foregoing, vesting will be suspended during the portion of any
leave
of absence (LOA) you have in excess of 60 days, and if you return
to work
following such a LOA, any scheduled vesting dates that passed during
the
suspension of vesting will be added to the end of the original vesting
schedule, with vesting on each such additional vesting date in the
amount
of shares not vested on the corresponding vesting date during the
period
of the suspension;
(iv) the Company may in its discretion cancel this option in whole
or
part, whether or not vested, and whether or not your employment is
continuing, if you breach in any material respect any material contractual
obligation or legal duty to the Company and fail to cure that breach
within 30 days of receipt of written notice thereof from the Company,
provided that a final determination that such a breach has occurred
and
not been cured within the 30 day notice period must be made by the
Company’s Board of Directors after giving you an opportunity to be heard
by the Board, and provided further than a failure of the Company
to assert
any breach shall not waive any subsequent breach; and (v) this option
and
the underlying shares are subject to the Agreement re Specified Acts,
which may result in loss of some of all of the benefit of this
grant.
Except
as otherwise provided in the Plan or the Applicable Agreements, any
termination of your employment for any reason or no reason will result
in
cessation of vesting and lapse of the option to the extent not yet
vested
at the time of termination (unless you are then or are becoming a
member
of the Board of Directors of the Company), and vested options may
be
exercised only for a period of 90 days following termination of your
employment (or Board service if you are a member of the Company’s Board of
Directors at the time of termination of your employment) (or 365
days
following termination if your employment ends as a result of
death).
Unless
otherwise permitted by the Company’s Board of Directors, you must pay the
exercise price and meet any tax obligations in cash. The option expires
on
the tenth anniversary of the Grant Date or such earlier date as the
Plan
provides.
For
purposes of this option, the definition of “Good Reason” under the Plan
shall be the same as the definition of Good Reason in the Employment
Agreement, notwithstanding any Plan provision to the
contrary.
|
|
|
The
Plan, the Company’s Annual Report on Form 10-K, and other filings made by
the Company with the Securities and Exchange Commission are available
for
your review on the Company’s internal employee web site. You may also
obtain paper copies of these documents upon request to the Company’s HR
department.
No
representations or promises are made regarding the duration of your
employment or service, vesting of the option, the value of the Company's
stock or this option, or the Company's prospects. The Company provides
no
advice regarding tax consequences or your handling of this option;
you
agree to rely only upon your own personal advisors.
|
|
|
ECLIPSYS
CORPORATION
By:
Name
Title
|
|
EXHIBIT
A-2 TO EMPLOYMENT AGREEMENT
Notice
of
Grant of Restricted Stock
|
Notice
of Grant of Restricted Stock
Employee
|
Eclipsys
Corporation
ID:
00-0000000
|
|
Xxxx
X. Xxxxx
[address
of recipient]
|
Grant
Number: ______________________
Plan: 2005
Inducement Grant
Stock
Incentive Plan
Employee
ID: ______________________
|
|
Effective
January __, 2006 (the “Grant
Date”),
you have been granted the right to purchase, at a price of $0.01
per
share, 100,000 shares (the “Shares”)
of common stock of Eclipsys Corporation (the "Company").
You must pay the aggregate purchase price for the Shares to the Company
by
cash, check or other method acceptable to the Company within 30 days
of
the date of this Notice or the Company may cancel the grant.
This
notice is a “Grant
Notice”
as described in the Restricted Stock Agreement between you and the
Company
dated January __, 2006 (the “Restricted
Stock Agreement”).
This grant is made under, and this grant and the Shares are subject
to and
governed by the terms and conditions of, this Notice, the Restricted
Stock
Agreement including the restrictions on transfer set forth therein,
the
Company's 2005 Inducement Grant Stock Incentive Plan (the “Plan”),
the Employment Agreement between you and the Company dated January
__,
2006 (the “Employment
Agreement”),
the Agreement re Specified Acts between you and the Company dated
January
__, 2006 (the “Agreement
re Specified Acts”),
and any other applicable written agreement between you and the Company.
The agreements referenced in this paragraph are referred to in this
Notice
as the “Applicable
Agreements.”
By your acceptance and payment for the Shares, you agree to such
terms and
conditions and confirm that your receipt of and payment for the Shares
is
voluntary.
For
purposes of this Notice, “Vesting
Date”
means each June 1 and December 1. Subject to the Applicable Agreements,
26.666% of the total number of Shares shall vest on June 1, 2007
(the
“First
Vesting Date”),
and an additional 10% of the total number of Shares shall vest on
each of
the seven Vesting Dates next succeeding the First Vesting Date, and
the
final 3.334% of the total number of Shares shall vest on June 1,
2011.
Unless
otherwise provided in the Plan or the Applicable Agreements, (i)
no Shares
will vest before the First Vesting Date; (ii) vesting of Shares will
occur
only on Vesting Dates, without any ratable vesting for periods of
time
between Vesting Dates; (iii) notwithstanding the foregoing, vesting
will
be suspended during the portion of any leave of absence (LOA) you
have in
excess of 60 days, and if you return to work following such a LOA,
any
Vesting Dates that passed during the suspension of vesting will be
added
to the end of the original vesting schedule, with vesting on each
such
additional Vesting Date in the amount of shares not vested on the
corresponding Vesting Date during the period of the suspension, contingent
upon your continued employment; (iv)
the Company may in its discretion cancel this grant in whole or part,
whether or not vested, and whether or not your employment is continuing,
and repurchase the cancelled Shares you own on the date of the breach
(whether or not vested) at the purchase price you paid, if you breach
in
any material respect any material contractual obligation or legal
duty to
the Company and fail to cure that breach within 30 days of receipt
of
written notice thereof from the Company, provided that a final
determination that such a breach has occurred and not been cured
within
the 30 day notice period must be made by the Company’s Board of Directors
after giving you an opportunity to be heard by the Board, and provided
further that a failure of the Company to assert any breach shall
not waive
any subsequent breach; and (v) the Shares are subject to the Agreement
re
Specified Acts, which may result in loss of some of all of the benefit
of
this grant.
Except
as otherwise provided in the Plan or the Applicable Agreements, any
termination of your employment for any reason or no reason will result
in
cessation of vesting, cancellation of this grant, and forfeiture
to the
Company of any Shares not vested at the time your employment terminates
(unless you are then or are becoming a member of the Board of Directors
of
the Company).
For
purposes of this grant and the Shares, the definition of Good Reason
under
the Plan shall be the same as the definition of Good Reason in the
Employment Agreement, notwithstanding any Plan provision to the
contrary.
|
|
|
The
Plan, the Company’s Annual Report on Form 10-K, and other filings made by
the Company with the Securities and Exchange Commission are available
for
your review on the Company’s internal employee web site. You may also
obtain paper copies of these documents upon request to the Company’s HR
department.
No
representations or promises are made regarding the duration of your
employment or service, vesting of the Shares, the value of the Company's
stock or this grant, or the Company's prospects. The Company provides
no
advice regarding tax consequences or your handling of the Shares;
you
agree to rely only upon your own personal advisors.
|
|
|
ECLIPSYS
CORPORATION
By:
Name
& Title
|
|
EXHIBIT
A-3 TO EMPLOYMENT AGREEMENT
Restricted
Stock Agreement
RESTRICTED
STOCK AGREEMENT
This
Restricted Stock Agreement (this “Agreement”)
is made
as of January __, 2006 by Eclipsys Corporation, a Delaware corporation
("Eclipsys")
and
Xxxx X. Xxxxx ("Recipient")
to
govern awards of restricted stock by Eclipsys to Recipient made from time to
time pursuant to Grant Notices (as defined below) that reference this Agreement
as governing the awards reflected therein.
1. Grants
of Restricted Stock. From
time
to time in its discretion, Eclipsys may grant and issue to Recipient shares
of
Eclipsys's common stock that are subject to the restrictions described in,
and
other provisions of, this Agreement (the "Restricted
Stock").
No
grants of Restricted Stock are promised by this Agreement. Each grant of
Restricted Stock will be documented by a written notice delivered by Eclipsys
to
Recipient (a “Grant
Notice”)
stating: (i) that the Restricted Stock described therein is subject to this
Agreement, (ii) the number of shares of Restricted Stock subject to the grant,
(iii) the schedule and any other conditions for vesting of the Restricted Stock,
and (iv) such other terms and conditions applicable to the Restricted Stock
as
Eclipsys may determine. As a condition to each grant of Restricted Stock,
Recipient is required to pay to Eclipsys $.01 by cash or check for each share
of
Restricted Stock (the "Acquisition
Consideration").
2. Governing
Plan.
The
Restricted Stock shall be granted pursuant to and (except as specifically set
forth herein or in another written agreement between Eclipsys and Recipient)
subject in all respects to the applicable provisions of the Eclipsys Corporation
2005 Stock Incentive Plan (or, for inducement grants made in connection with
commencement of Recipient’s employment, the Eclipsys Corporation 2005 Inducement
Grant Stock Incentive Plan) or its successor plan (the "Plan"),
which
are incorporated herein by reference. Terms not otherwise defined in this
Agreement have the meanings ascribed to them in the Plan.
3. Restrictions
on the Restricted Stock.
(a) Limitation
on Transfer.
No
share of Restricted Stock (including any shares received by Recipient with
respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization or a similar transaction affecting
Eclipsys's securities without receipt of consideration) may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, alienated or
encumbered unless and until the conditions to vesting of that share set forth
in
the Grant Notice are met and any additional requirements or restrictions
contained in this Agreement, the Grant Notice or the Plan have been satisfied,
terminated or expressly waived by Eclipsys in writing. However, this will not
prohibit nominal transfers of Restricted Stock for estate planning purposes
that
do not effect a change in beneficial ownership, if the transferee agrees in
writing to the terms of this Agreement. Satisfaction of the conditions to
vesting set forth in the Grant Notice and any additional requirements or
restrictions contained in this Agreement, and the resulting removal of the
restrictions imposed hereunder from particular shares of Restricted Stock,
is
also referred to as “vesting” of those shares and shares from which the
restrictions have been removed are referred to as “vested.”
US1DOCS
5198605v2
(b) Cancellation
of Restricted Stock.
Notwithstanding Section
3(a),
but
subject to the Plan, any applicable Grant Notice, and any other separate written
agreement between Eclipsys and Recipient, if any Cancellation Event occurs,
then
(i) vesting of any shares of Restricted Stock originally scheduled to vest
after
the time that Cancellation Event occurred will cease; (ii) any grant insofar
as
it relates to Restricted Stock that has not yet vested will be cancelled; (iii)
unvested Restricted Stock will be forfeited to Eclipsys and all rights of
Recipient as a stockholder of such shares will cease; (iv) Eclipsys shall be
obligated to pay to Recipient, by cash or equivalent or by cancellation of
amounts owed by Recipient to Eclipsys or any Affiliate, the Acquisition
Consideration per share previously received from Recipient in respect of all
shares of Restricted Stock that are forfeited to Eclipsys; and (v) Recipient
shall have no rights to or in respect of shares of Restricted Stock that are
forfeited to Eclipsys except the right to receive the Acquisition Consideration
in respect thereof. In case of a Cancellation Event, any partially vested share
will be rounded up to the nearest whole share for purposes of determining the
number of shares that are forfeited to Eclipsys. For these purposes, if
Recipient is an employee of Eclipsys or any of its present or future parent
or
subsidiary corporations (each an “Affiliate”)
as
defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”),
a
“Cancellation
Event”
means,
and shall be deemed to occur upon, the cessation of Recipient’s employment with
Eclipsys or any of its Affiliates or its successor (other than in situations
in
which the Recipient is or is becoming a member of the Board of Directors of
Eclipsys) for any reason, including without limitation resignation by Recipient
with or without good reason, or termination of employment by Eclipsys or any
Affiliate or its successor with or without cause. If Recipient is a member
of
the Board of Directors of Eclipsys, a Cancellation Event means, and shall be
deemed to occur upon, cessation of Recipient’s service as a director of
Eclipsys, unless at the time of such cessation Recipient is then an employee
of
Eclipsys or any of its Affiliates, in which case Recipient shall thereafter
be
treated as an employee for these purposes. 4. Voting
and Other Rights.
During
the period prior to vesting, except as otherwise provided herein, Recipient
will
have all of the rights of a stockholder with respect to all of the Restricted
Stock, including without limitation the right to vote such Restricted Stock
and
the right to receive all dividends or other distributions with respect to such
Restricted Stock. In connection with the payment of such dividends or other
distributions, Eclipsys will be entitled to deduct from any amounts otherwise
payable by Eclipsys to Recipient (including without limitation salary or other
compensation), except to the extent prohibited by applicable law or regulation,
any taxes or other amounts required by any governmental authority to be withheld
and paid over or deposited to such authority for Recipient's
account.
5. Handling
of Shares.
(a) Certificates
or Book Entries.
Eclipsys may in its discretion issue physical certificates representing
Restricted Stock, or cause the Restricted Stock to be recorded in book entry
form and reflected in records maintained by or for Eclipsys. Each certificate
or
data base entry representing any unvested portion of any Restricted Stock may
be
endorsed with a legend substantially as set forth below, as well as such other
legends as Eclipsys may deem appropriate to comply with applicable laws and
regulations:
The
securities evidenced by this certificate are subject to certain limitations
on
transfer and other restrictions as set forth in that certain Restricted Stock
Agreement, dated as of January __, 2006, between Eclipsys and the holder of
such
securities, the Eclipsys Corporation 2005 Stock Incentive Plan or 2005
Inducement Grant Stock Incentive Plan (copies of which are available for
inspection at the offices of Eclipsys), and the notice of grant applicable
to
the securities.
(b) Escrow.
With
respect to each unvested share of Restricted Stock (including any shares
received by Recipient with respect to shares of Restricted Stock that have
not
yet vested as a result of stock dividends, stock splits or any other form of
recapitalization or a similar transaction affecting Eclipsys's securities
without receipt of consideration), the Secretary of Eclipsys, or such other
escrow holder as the Secretary may appoint, will retain physical custody of
any
certificate representing such share until such share vests.
(c)
Delivery
of Certificates.
As soon
as practicable after the vesting of any Restricted Stock and upon request by
Recipient, but subject to Section
5(d),
Eclipsys will deliver to Recipient or Recipient’s designee a certificate(s) free
of restrictive legends representing such vested Restricted Stock, or cause
appropriate book entry or other electronic changes to be made to reflect
Recipient’s ownership of such vested Restricted Stock free of restrictions, in
any case net of the number of shares withheld by Eclipsys in payment of tax
pursuant to Section
6(a).
(d) Conditions
to Vesting.
At the
time for vesting of any shares of Restricted Stock, and as a condition to
vesting, Recipient must, if requested by Eclipsys, make appropriate
representations in a form satisfactory to Eclipsys that such Restricted Stock
will not be sold other than (A) pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or an applicable
exemption from the registration requirements of such Act; (B) in compliance
with all applicable state securities laws and regulations; and (C) in
compliance with all terms and conditions of the Plan, the applicable Grant
Notice, any applicable policy of Eclipsys or any of its Affiliates, and any
other written agreement between Recipient and Eclipsys or any of its
Affiliates.
6. Tax
Matters.
(a) Recipient’s
Tax Obligations.
The
vesting of Restricted Stock generally results in taxable income for employees
and is subject to appropriate income tax withholding, deposits, or other
deductions required by applicable laws or regulations. Subject to any separate
written agreement between Recipient and Eclipsys, Recipient and Recipient’s
successors will be responsible for all income and other taxes payable as a
result of grant or vesting of Restricted Stock or otherwise in connection with
this Agreement. All obligations of Eclipsys or its Affiliates to pay tax
deposits to any federal, state or other taxing authority as a result of grant
or
vesting of Restricted Stock will result in a commensurate obligation of
Recipient to reimburse Eclipsys or its Affiliate the amount of such tax
deposits. Such obligation of Recipient shall, unless otherwise specified in
the
applicable Grant Notice or in a separate written agreement between Eclipsys
and
Recipient, be satisfied by the Recipient forfeiting and Eclipsys deducting
and
retaining from the shares vesting at any particular time that number of shares
with a value equal to the amount of the required minimum tax withholdings that
Eclipsys or its Affiliate is required to pay as a result of such vesting, with
such value measured by the same value per share used by Eclipsys or its
Affiliate to determine its tax deposit obligation and based on the minimum
statutory withholding rates for federal and state income and payroll tax
purposes that are applicable to supplemental wages. If Eclipsys or its Affiliate
is required to pay additional tax deposits after the initial issuance to
Recipient of the net number of vested shares, Eclipsys or its Affiliate may
require Recipient to make up the difference in cash. If the tax deposits paid
are less than Recipient’s tax obligations, Recipient is solely responsible for
any additional taxes due. If Eclipsys or its Affiliate pays tax deposits in
excess of Recipient’s tax obligations, Recipient’s sole recourse will be against
the relevant taxing authorities, and Eclipsys and its Affiliates will have
no
obligation to issue additional shares or pay cash to Recipient in respect
thereof. Recipient is responsible for determining Recipient’s actual income tax
liabilities and making appropriate payments to the relevant taxing authorities
to fulfill Recipient’s tax obligations and avoid interest and penalties.
(b) Section
83(b) Election.
Recipient understands that Recipient may make an election pursuant to Section
83(b) of the Code (by filing an election with the Internal Revenue Service
within thirty (30) days after the date Recipient acquired the Restricted Stock)
to include in Recipient's gross income the fair market value (as of the date
of
acquisition) of the Restricted Stock. Recipient may make such an election under
Section 83(b), or comparable provisions of any state tax law, only
if,
prior to
making any such election, Recipient (a) notifies Eclipsys of Recipient's
intention to make such election, by delivering to Eclipsys a copy of the
fully-executed Section 83(b) Election Form attached hereto as Exhibit
A,
and
(b) pays to Eclipsys an amount sufficient to satisfy any taxes or other
amounts required by any governmental authority to be withheld or paid over
to
such authority for Recipient's account, or otherwise makes arrangements
satisfactory to Eclipsys for the payment of such amounts through withholding
or
otherwise. Recipient understands that if Recipient has not made a proper and
timely Section 83(b) election, at the time the forfeiture restrictions
applicable to the Restricted Stock lapse, Section 83 will generally provide
that
Recipient will recognize ordinary income and be taxed in an amount equal to
the
fair market value (as of the date the forfeiture restrictions lapse) of the
Restricted Stock less the Acquisition Consideration paid for the Restricted
Stock. For this purpose, the term "forfeiture restrictions" includes the right
of Eclipsys to cancel the Restricted Stock pursuant to Section
3
of this
Agreement. Recipient
acknowledges that it is Recipient's sole responsibility, and not the
responsibility of Eclipsys or any of its Affiliates, to file a timely election
under Section 83(b), even if Recipient requests Eclipsys or its representative
to make this filing on Recipient's behalf. Recipient is relying solely on
Recipient's advisors with respect to the decision as to whether or not to file
a
Section 83(b) election.
7. Additional
Agreements
(a) Independent
Advice; No Representations.
Recipient acknowledges that (i) Recipient was and is free to use professional
advisors of Recipient’s choice in connection with this Agreement and any grant
of Restricted Stock, that Recipient understands this Agreement and the meaning
and consequences of receiving grants of Restricted Stock, and is entering into
this Agreement freely and without coercion or duress; and (ii) Recipient has
not
received and is not relying, and will not rely, upon any advice, representations
or assurances made by or on behalf of Eclipsys or any Affiliate or any employee
of or counsel to Eclipsys or any Affiliate regarding any tax or other effects
or
implications of the Restricted Stock or other matters contemplated by this
Agreement or any Grant Notice.
(b) Value
of Restricted Stock.
No
representations or promises are made to Recipient regarding the value of the
Restricted Stock or the business prospects of Eclipsys or any Affiliate.
Recipient acknowledges that information about investment in Eclipsys stock,
including financial information and related risks, is contained in Eclipsys’s
SEC reports on Form 10-Q and Form 10-K, which have been made available from
Eclipsys’s Human Resources department and/or on Eclipsys’s internal web site for
Recipient’s review at any time before Recipient’s acceptance of this Agreement
or at any time during Recipient’s employment or service. Further, Recipient
understands that Eclipsys and its Affiliates and their respective employees,
counsel and other representatives do not provide tax or investment advice and
acknowledges Eclipsys’s recommendation that Recipient consult with independent
specialists regarding such matters. Sale or other transfer of Eclipsys stock
may
be limited by and subject to policies of Eclipsys or its Affiliates as well
as
applicable securities laws and regulations.
(c) Merger,
Consolidation or Reorganization.
In the
event of a Reorganization of Eclipsys in which holders of shares of Common
Stock
of Eclipsys are entitled to receive in respect of such shares any additional
shares or new or different shares or securities, cash or other consideration
(including, without limitation, a different number of shares of Common Stock)
("Exchange
Consideration"),
then
Recipient will be entitled to receive a proportionate share of the Exchange
Consideration in exchange for any Restricted Stock that is then still owned
by
Recipient and not cancelled; provided that, subject to any Grant Notice or
other
separate written agreement between Eclipsys and Recipient, any Exchange
Consideration issued to Recipient in respect of unvested Restricted Stock will
be subject to the same restrictions and vesting provisions that were applicable
to the Restricted Stock in exchange for which the Exchange Consideration was
issued.
(d) No
Right to Continued Employment or Service; No Positive Inference.
Neither
this Agreement nor any grant of Restricted Stock confers upon Recipient any
right to continue as an employee, director or consultant of, or in any other
relationship with, Eclipsys or its Affiliates, or to any particular employment
or service tenure or minimum vesting of Restricted Stock, or limits in any
way
the right of Eclipsys or its Affiliates to terminate Recipient's services to
Eclipsys or any of its Affiliates at any time, with or without cause. Restricted
Stock is to motivate and reward future performance, and no grant of Restricted
Stock will be interpreted as a reward for past performance that dictates vesting
in advance of the vesting schedule specified in the applicable Grant Notice,
or
an indication that the Recipient has performed well or is entitled to any
particular employment or service tenure.
8. General.
(a) Successors
and Assigns.
This
Agreement is personal in its nature and Recipient may not assign or transfer
Recipient’s rights under this Agreement, except as specifically provided herein
or permitted by Eclipsys in writing.
(b) Notices.
Any
notices, demands or other communications required or desired to be given by
any
party shall be in writing and shall be validly given to another party if served
personally or if deposited in the United States mail, certified or registered,
postage prepaid, return receipt requested. If such notice, demand or other
communication shall be served personally, service shall be conclusively deemed
made at the time of such personal service. If such notice, demand or other
communication is given by mail, such notice shall be conclusively deemed given
forty-eight (48) hours after the deposit thereof in the United States mail
addressed to the party to whom such notice, demand or other communication is
to
be given as hereinafter set forth:
To
Eclipsys: Eclipsys,
Inc.
0000
Xxxxx Xxxxx Xxxx
Xxxx
Xxxxx, Xxxxxxx 00000
Attention:
General Counsel
To
Recipient: At
Recipient’s address of record as maintained in Eclipsys’s employment
files
Any
party
may change its address for the purpose of receiving notices, demands and other
communications by providing written notice to the other party in the manner
described in this paragraph.
(c) Entire
Agreement.
Except
as this Agreement and/or another written agreement between Eclipsys and
Recipient may expressly provide otherwise, this Agreement, the Plan, and any
Grant Notices constitute the entire agreement and understanding of Eclipsys
(together with its Affiliates) and Recipient with respect to Restricted Stock,
and supersede all prior written or verbal agreements and understandings between
Recipient and Eclipsys (together with its Affiliates) relating to such subject
matter. Recipient has not received and is not relying upon, and will not rely
upon, any representations by any employee of or counsel to or other
representative of Eclipsys or any of its Affiliates in connection with this
Agreement or any grant of Restricted Stock hereunder. This Agreement may only
be
amended by written instrument signed by Recipient and an authorized officer
of
Eclipsys.
(d) Governing
Law; Severability. This
Agreement will be construed and interpreted under the laws of the State of
Delaware applicable to agreements executed and to be wholly performed within
the
State of Delaware. If any part of this Agreement as applied to any party or
to
any circumstance is adjudged by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable for any reason, then (i) the invalidity of that
part shall in no way affect (to the maximum extent permissible by law) the
application of such part under circumstances different from those adjudicated
by
the court, the application of any other part of this Agreement, or the
enforceability or invalidity of this Agreement as a whole; and (ii) such part
shall be deemed amended to the extent necessary to conform to applicable law
so
as to be valid, legal, effective and enforceable or, if such part cannot be
so
amended without materially altering the intention of the parties, then such
part
will be stricken and the remainder of this Agreement shall continue in full
force and effect.
(e) Remedies.
All
rights and remedies provided pursuant to this Agreement or by law shall be
cumulative, and no such right or remedy shall be exclusive of any other. A
party
may pursue any one or more rights or remedies hereunder or may seek damages
or
specific performance in the event of another party’s breach hereunder or may
pursue any other remedy by law or equity, whether or not stated in this
Agreement.
(f) Interpretation. Headings
herein are for convenience of reference only, do not constitute a part of this
Agreement, and will not affect the meaning or interpretation of this Agreement.
References herein to Sections are references to the referenced Section hereof,
unless otherwise specified.
(g) Waivers;
Amendments.
The
waiver by either party of a breach of any provision of this Agreement shall
not
operate or be construed as a waiver of any later breach of that provision.
This
Agreement may be modified only by written agreement signed by Recipient and
Eclipsys.
(h) Counterparts. This
Agreement may be executed in more than one counterpart, each of which shall
be
deemed an original, but all of which together shall constitute but one and
the
same instrument. Facsimile or photographic copies of originally signed copies
of
this Agreement will be deemed to be originals.
|
ECLIPSYS
CORPORATION
By:
Name:
Title:
|
Xxxx
X. Xxxxx
|
EXHIBIT
A
to
Restricted Stock Agreement
ELECTION
TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN
GROSS INCOME IN YEAR OF TRANSFER
INTERNAL
REVENUE CODE § 83(b)
The
undersigned hereby elects pursuant to Section 83(b) of the Internal Revenue
Code
with respect to the property described below, and supplies the following
information in accordance with the regulations promulgated
thereunder:
1. Name,
address and taxpayer identification number of the
undersigned:
Taxpayer
I.D. No.:
2. Description
of property with respect to which the election is being
made:
____________
shares of Common Stock of Eclipsys Corporation, a Delaware corporation (the
"Company")
3. Date
on which property was transferred: __________
4. Taxable
year to which this election relates: ________
5. Nature
of the restrictions to which the property is subject:
If
the
taxpayer's service to the Company terminates for any reason before the Common
Stock vests, the Company will repurchase the Common Stock from the taxpayer
at
$.01 per share. The Common Stock vests according to the following schedule:
_____________________
The
Common Stock is non-transferable in the taxpayer's hands, by virtue of language
to that effect stamped on the stock certificate.
6. Fair
market value of the property:
The
fair
market value at the time of transfer (determined without regard to any
restrictions other than restrictions that by their terms will never lapse)
of
the property with respect to which this election is being made is $_________
per
share.
7. Amount
paid for the property:
The
amount paid by the taxpayer for said property is $.01 per share.
8. Furnishing
statement to employer:
A
copy of
this statement has been furnished to _______________
Date: ________________________________
Signature
Printed
Name
This
election must be filed with the Internal Revenue Service Center with which
taxpayer files his or her Federal income tax returns and must be made within
thirty (30) days after receipt of the Restricted Stock. This filing should
be
made by registered or certified mail, return receipt requested. The taxpayer
must retain two (2) copies of the completed form, one for filing with his or
her
Federal and state tax returns for the current tax year and an additional copy
for his or her records.
EXHIBIT
A-4 TO EMPLOYMENT AGREEMENT
2005
Inducement Grant Stock Incentive Plan
ECLIPSYS
CORPORATION
2005
INDUCEMENT GRANT STOCK INCENTIVE PLAN
1. Purpose
The
purpose of this 2005 Inducement Grant Stock Incentive Plan (the “Plan”) of
Eclipsys Corporation, a Delaware corporation (the “Company”), is to provide
terms and conditions to govern inducement grants made by the Company under
Section 4350(i)(1)(A)(iv) of the NASD Marketplace Rules (“Inducement Grants”).
Such grants are intended to advance the interests of the Company’s stockholders
by enhancing the Company’s ability to recruit, retain and motivate persons who
are expected to make important contributions to the Company and by providing
such persons with equity ownership opportunities and performance-based
incentives that are intended to align their interests with those of the
Company’s stockholders. Except where the context otherwise requires, the term
“Company” shall include any of the Company’s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”) and any other business venture (including, without
limitation, joint venture or limited liability company) in which the Company
has
a controlling interest, as determined by the Board of Directors of the Company
(the “Board”).
2. Eligibility
Prospective
and newly hired employees of the Company are eligible to receive Inducement
Grants in the form of options, stock appreciation rights, restricted stock,
restricted stock units and other stock-based awards and commitments therefore
(each an “Award”) under the Plan. Each person who receives an Award under the
Plan is deemed a “Participant”.
3. Administration
and Delegation
(a) Administration
by Board of Directors.
The
Plan will be administered by the Board. The Board shall have authority to grant
Awards and to adopt, amend and repeal such administrative rules, guidelines
and
practices relating to the Plan as it shall deem advisable. The Board may correct
any defect, supply any omission or reconcile any inconsistency in the Plan
or
any Award in the manner and to the extent it shall deem expedient to carry
the
Plan into effect and it shall be the sole and final judge of such expediency.
All decisions by the Board shall be made in the Board’s sole discretion and
shall be final and binding on all persons having or claiming any interest in
the
Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating
to or under the Plan made in good faith.
(b) Appointment
of Committees.
To the
extent permitted by applicable law, the Board may delegate any or all of its
powers under the Plan to one or more committees or subcommittees of the Board
(a
“Committee”). All references in the Plan to the “Board” shall mean the Board or
a Committee of the Board or the officers referred to in Section 3(c) to the
extent that the Board’s powers or authority under the Plan have been delegated
to such Committee or officers.
(c) Delegation
to Officers.
To the
extent permitted by applicable law, the Board may delegate to one or more
officers of the Company the power to grant Awards to employees or officers
of
the Company or any of its present or future subsidiary corporations and to
exercise such other powers under the Plan as the Board may determine, provided
that the Board shall fix the terms of the Awards to be granted by such officers
(including the exercise price of such Awards, which may include a formula by
which the exercise price will be determined) and the maximum number of shares
subject to Awards that the officers may grant; provided further, however, that
no officer shall be authorized to grant Awards to any “executive officer” of the
Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934,
as
amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by
Rule 16a-1 under the Exchange Act).
4. Stock
Available for Awards
(a) Number
of Shares.
Subject
to adjustment under Section 9, Awards may be made under the Plan for 1,200,000
shares of common stock, $.01 par value per share, of the Company (the “Common
Stock”). The Board may in its discretion increase the number of shares of Common
Stock available for Awards under the Plan from time to time. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares
of Common Stock subject to such Award being repurchased by the Company at the
original issuance price pursuant to a contractual repurchase right) or results
in any Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan. However,
in the case of Incentive Stock Options (as hereinafter defined), the foregoing
provisions shall be subject to any limitations under the Code. SARs (as
hereinafter defined) to be settled in shares of Common Stock shall be counted
in
full against the number of shares available for award under the Plan, regardless
of the number of shares of Common Stock issued on settlement of the SAR;
provided, however, that SARs to be settled only in cash shall not be so counted.
Shares issued under the Plan may consist in whole or in part of authorized
but
unissued shares or treasury shares.
(b) Section
162(m) Sub-limit.
Subject
to adjustment under Section 9, the maximum number of shares of Common Stock
with
respect to which Awards may be granted to any Participant under the Plan shall
be 1,000,000 per calendar year. For purposes of the foregoing limit, the
combination of an Option (as hereafter defined) in tandem with an SAR shall
be
treated as a single Award. The per-Participant limit described in this Section
4(b)(1) shall be construed and applied consistently with Section 162(m) of
the
Code or any successor provision thereto, and the regulations thereunder
(“Section 162(m)”).
5. Stock
Options
(a) General.
The
Board may grant options to purchase Common Stock (each, an “Option”) and
determine the number of shares of Common Stock to be covered by each Option,
the
exercise price of each Option and the conditions and limitations applicable
to
the exercise of each Option, including conditions relating to applicable federal
or state securities laws, as it considers necessary or advisable. An Option
which is not intended to be an Incentive Stock Option (as hereinafter defined)
shall be designated a “Nonstatutory Stock Option”.
(b) Incentive
Stock Options.
An
Option that the Board intends to be an “incentive stock option” as defined in
Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to
employees of Eclipsys Corporation, any of Eclipsys Corporation's present or
future parent or subsidiary corporations as defined in Sections 424(e) or (f)
of
the Code, and any other entities the employees of which are eligible to receive
Incentive Stock Options under the Code, and shall be subject to and shall be
construed consistently with the requirements of Section 422 of the Code. The
Company shall have no liability to a Participant, or any other party, if an
Option (or any part thereof) that is intended to be an Incentive Stock Option
is
not an Incentive Stock Option or for any action taken by the Board pursuant
to
Section 10(f), including without limitation the conversion of an Incentive
Stock
Option to a Nonstatutory Stock Option.
(c) Exercise
Price.
The
Board shall establish the exercise price of each Option and specify such
exercise price in the applicable option agreement; provided, however, that
the
exercise price shall not be less than 100% of the Fair Market Value (as defined
below) at the time the Option is granted.
(d) Duration
of Options.
Each
Option shall be exercisable at such times and subject to such terms and
conditions as the Board may specify in the applicable option agreement,
provided, however, that no Option will be granted for a term in excess of 10
years.
(e) Exercise
of Option.
Options
may be exercised by delivery to the Company of a written notice of exercise
signed by the proper person or by any other form of notice (including electronic
notice) approved by the Board together with payment in full as specified in
Section 5(f) for the number of shares for which the Option is exercised. Shares
of Common Stock subject to the Option will be delivered by the Company following
exercise either as soon as practicable or, subject to such conditions as the
Board shall specify, on a deferred basis (with the Company’s obligation to be
evidenced by an instrument providing for future delivery of the deferred shares
at the time or times specified by the Board).
(f) Payment
Upon Exercise.
Common
Stock purchased upon the exercise of an Option granted under the Plan shall
be
paid for as follows:
(1) in
cash
or by check, payable to the order of the Company;
(2) except
as
the Board may otherwise provide in an option agreement, by (i) delivery of
an
irrevocable and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price and any
required tax withholding or (ii) delivery by the Participant to the Company
of a
copy of irrevocable and unconditional instructions to a creditworthy broker
to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price and any required tax withholding;
(3) when
the
Common Stock is registered under the Securities Exchange Act of 1934 (the
“Exchange Act”), by delivery of shares of Common Stock owned by the Participant
valued at their fair market value as determined by (or in a manner approved
by)
the Board (“Fair Market Value”), provided (i) such method of payment is then
permitted under applicable law, (ii) such Common Stock, if acquired directly
from the Company, was owned by the Participant for such minimum period of time,
if any, as may be established by the Board in its discretion and (iii) such
Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting
or other similar requirements;
(4) to
the
extent permitted by applicable law and by the Board, by (i) delivery of a
promissory note of the Participant to the Company on terms determined by the
Board, or (ii) payment of such other lawful consideration as the Board may
determine; or
(5) by
any
combination of the above permitted forms of payment.
(g) Substitute
Options.
In
connection with a merger or consolidation of an entity with the Company or
the
acquisition by the Company of property or stock of an entity, the Board may
grant Options in substitution for any options or other stock or stock-based
awards granted by such entity or an affiliate thereof. Substitute Options may
be
granted on such terms as the Board deems appropriate in the circumstances,
notwithstanding any limitations on Options contained in the other sections
of
this Section 5 or in Section 2. Substitute
Options shall not count against the overall share limit set forth in Section
4(a), except as may be required by reason of Section 422 and related provisions
of the Code.
6. Stock
Appreciation Rights.
(a) General.
A stock
appreciation right, or “SAR”, is an Award entitling the holder, upon exercise,
to receive an amount in Common Stock determined by reference to appreciation,
from and after the date of grant, in the fair market value of a share of Common
Stock. The base price from which such appreciation is measured shall not be
less
than 100% of the Fair Market Value on the date of grant. The date as of which
such appreciation or other measure is determined shall be the exercise date.
SARs granted hereunder shall expire no later than 10 years after the date of
grant.
(b) Grants.
SARs may
be granted in tandem with, or independently of, Options granted under the
Plan.
(1) Tandem
Awards.
When
SARs
are expressly granted in tandem with Options, (i) the SAR will be exercisable
only at such time or times, and to the extent, that the related Option is
exercisable (except to the extent designated by the Board in connection with
a
Reorganization Event or a Change in Control Event) and will be exercisable
in
accordance with the procedure required for exercise of the related Option;
(ii)
the SAR will terminate and no longer be exercisable upon the termination or
exercise of the related Option, except to the extent designated by the Board
in
connection with a Reorganization Event or a Change in Control Event and except
that a SAR granted with respect to less than the full number of shares covered
by an Option will not be reduced until the number of shares as to which the
related Option has been exercised or has terminated exceeds the number of shares
not covered by the SAR; (iii) the Option will terminate and no longer be
exercisable upon the exercise of the related SAR; and (iv) the SAR will be
transferable only with the related Option.
(2) Independent
SARs.
A
SAR not
expressly granted in tandem with an Option will become exercisable at such
time
or times, and on such conditions, as the Board may specify in the SAR
Award.
(c) Exercise.
SARs
may be exercised by delivery to the Company of a written notice of exercise
signed by the proper person or by any other form of notice (including electronic
notice) approved by the Board, together with any other documents required by
the
Board.
7. Restricted
Stock; Restricted Stock Units.
(a) General.
The
Board may grant Awards entitling recipients to acquire shares of Common Stock
(“Restricted Stock”), subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price from
the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award. Instead
of granting Awards for Restricted Stock, the Board may grant Awards entitling
the recipient to receive shares of Common Stock to be delivered at the time
such
shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock and
Restricted Stock Units are each referred to herein as a “Restricted Stock
Award”).
(b) Terms
and Conditions.
The
Board shall determine the terms and conditions of a Restricted Stock Award,
including the conditions for repurchase and the issue price.
(c) Stock
Certificates.
Any
stock certificates issued in respect of a Restricted Stock Award shall be
registered in the name of the Participant and, unless otherwise determined
by
the Board, deposited by the Participant, together with a stock power endorsed
in
blank, with the Company (or its designee). At the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if
the
Participant has died, to the beneficiary designated, in a manner determined
by
the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant’s death (the “Designated
Beneficiary”). In the absence of an effective designation by a Participant,
“Designated Beneficiary” shall mean the Participant’s estate.
8. Other
Stock-Based Awards.
Other
Awards of shares of Common Stock, and other Awards that are valued in whole
or
in part by reference to, or are otherwise based on, shares of Common Stock
or
other property, may be granted hereunder to Participants (“Other Stock Unit
Awards”), including without limitation Awards entitling recipients to receive
shares of Common Stock to be delivered in the future. Such Other Stock Unit
Awards shall also be available as a form of payment in the settlement of other
Awards granted under the Plan or as payment in lieu of compensation to which
a
Participant is otherwise entitled. Other Stock Unit Awards may be paid in shares
of Common Stock or cash, as the Board shall determine. Subject to the provisions
of the Plan, the Board shall determine the conditions of each Other Stock Unit
Awards, including any purchase price applicable thereto.
9. Adjustments
for Changes in Common Stock and Certain Other Events.
(a) Changes
in Capitalization.
In the
event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common
Stock other than an ordinary cash dividend, (i) the number and class of
securities available under this Plan, (ii) the sub-limit set forth in Section
4(b), (iii) the number and class of securities and exercise price per share
of
each outstanding Option, (iv) the share- and per-share provisions of each SAR,
(v) the repurchase price per share subject to each outstanding Restricted Stock
Award and (vi) the share- and per-share-related provisions of each outstanding
Other Stock Unit Award, shall be appropriately adjusted by the Company (or
substituted Awards may be made, if applicable) to the extent determined by
the
Board.
(b) Reorganization
and Change in Control Events
(1) Definitions
(a) A
“Reorganization Event” shall mean:
(i) any
merger or consolidation of the Company with or into another entity as a result
of which all of the Common Stock of the Company is converted into or exchanged
for the right to receive cash, securities or other property or is cancelled;
(ii) any
exchange of all of the Common Stock of the Company for cash, securities or
other
property pursuant to a share exchange transaction; or
(iii) any
liquidation or dissolution of the Company.
(b) A
“Change
in Control Event” shall mean:
(i) the
acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership
of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 30% or more of either (x) the then-outstanding shares of Common
Stock of the Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control Event: (A)
any
acquisition directly from the Company (excluding an acquisition pursuant to
the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for Common Stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, (C) any acquisition by any corporation pursuant to a Business
Combination (as defined below) which complies with clauses (x) and (y) of
subsection (iii) of this definition or (D) any acquisition by General Atlantic
Partners 28, L.P., General Atlantic Partners 38, L.P., General Atlantic Partners
47, L.P., GAP Coinvestment Partners, L.P. and any other entities controlled
by
or under common control with any of the foregoing entities, within the meaning
of the Exchange Act (each such party is referred to herein as an “Exempt
Person”); or
(ii) such
time
as the Continuing Directors (as defined below) do not constitute a majority
of
the Board (or, if applicable, the Board of Directors of a successor corporation
to the Company), where the term “Continuing Director” means at any date a member
of the Board (x) who was a member of the Board on the date of the initial
adoption of this Plan by the Board or (y) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of
the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause
(y)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal
of
directors or other actual or threatened solicitation of proxies or consents,
by
or on behalf of a person other than the Board; or
(iii) the
consummation of a merger, consolidation, reorganization, recapitalization or
share exchange involving the Company or a sale or other disposition of all
or
substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following
two conditions is satisfied: (x) all or substantially all of the individuals
and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all
of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
respectively, immediately prior to such Business Combination and (y) no Person
(excluding the Exempt Persons and any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly, 30% or more of the then-outstanding
shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination); or
(iv) the
liquidation or dissolution of the Company.
(c) “Good
Reason” shall have the meaning set forth in any employment agreement or
severance agreement between the Company and the Participant, or in the absence
of such a definition, shall mean any significant diminution in the Participant’s
title, authority, or responsibilities from and after such Reorganization Event
or Change in Control Event, as the case may be, or any reduction in the annual
cash compensation payable to the Participant from and after such Reorganization
Event or Change in Control Event, as the case may be.
(d) “Cause”
shall have the meaning set forth in any employment agreement or severance
agreement between the Company and the Participant, or in the absence of such
a
definition, shall mean any (i) willful failure by the Participant, which failure
is not cured within 30 days of written notice to the Participant from the
Company, to perform his or her material responsibilities to the Company or
(ii)
willful misconduct by the Participant which affects the business reputation
of
the Company. The Participant shall be considered to have been discharged for
“Cause” if the Company determines, within 30 days after the Participant’s
resignation, that discharge for Cause was warranted.
(2) Effect
on Options
(a) Reorganization
Event.
Upon
the occurrence of a Reorganization Event (regardless of whether such event
also
constitutes a Change in Control Event), or the execution by the Company of
any
agreement with respect to a Reorganization Event (regardless of whether such
event will result in a Change in Control Event), the Board shall provide that
all outstanding Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof); provided that if such Reorganization Event also constitutes a Change
in Control Event, except to the extent specifically provided to the contrary
in
the instrument evidencing any Option or any other agreement between a
Participant and the Company, such assumed or substituted options shall be
immediately exercisable in full if, on or prior to the first anniversary of
the
date of the consummation of the Reorganization Event, the Participant’s
employment with the Company or the acquiring or succeeding corporation is
terminated for Good Reason by the Participant or is terminated without Cause
by
the Company or the acquiring or succeeding corporation. For purposes hereof,
an
Option shall be considered to be assumed if, following consummation of the
Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation
of
the Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event by holders of Common
Stock for each share of Common Stock held immediately prior to the consummation
of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority
of
the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Reorganization Event is not solely
common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise
of
Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in value (as determined by
the
Board) to the per share consideration received by holders of outstanding shares
of Common Stock as a result of the Reorganization Event.
Notwithstanding
the foregoing, if the acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute for, such Options, or in the
event of a liquidation or dissolution of the Company, the Board shall, upon
written notice to the Participants, provide that all then unexercised Options
will become exercisable in full as of a specified time prior to the
Reorganization Event and will terminate immediately prior to the consummation
of
such Reorganization Event, except to the extent exercised by the Participants
before the consummation of such Reorganization Event; provided, however, in
the
event of a Reorganization Event under the terms of which holders of Common
Stock
will receive upon consummation thereof a cash payment for each share of Common
Stock surrendered pursuant to such Reorganization Event (the “Acquisition
Price”), then the Board may instead provide that all outstanding Options shall
terminate upon consummation of such Reorganization Event and that each
Participant shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price multiplied by the number
of
shares of Common Stock subject to such outstanding Options (whether or not
then
exercisable), exceeds (B) the aggregate exercise price of such
Options.
(b) Change
in Control Event that is not a Reorganization Event.
Upon
the occurrence of a Change in Control Event that does not also constitute a
Reorganization Event, except to the extent specifically provided to the contrary
in the instrument evidencing any Option or any other agreement between a
Participant and the Company, all Options then outstanding shall automatically
become immediately exercisable in full if, on or prior to the first anniversary
of the date of the consummation of the Change in Control Event, the
Participant’s employment with the Company or the acquiring or succeeding
corporation is terminated for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or succeeding
corporation.
(3) Effect
on Restricted Stock Awards
(a) Reorganization
Event that is not a Change in Control Event.
Upon
the occurrence of a Reorganization Event that is not a Change in Control Event,
the repurchase and other rights of the Company under each outstanding Restricted
Stock Award shall inure to the benefit of the Company’s successor and shall
apply to the cash, securities or other property which the Common Stock was
converted into or exchanged for pursuant to such Reorganization Event in the
same manner and to the same extent as they applied to the Common Stock subject
to such Restricted Stock Award.
(b) Change
in Control Event.
Upon
the occurrence of a Change in Control Event (regardless of whether such event
also constitutes a Reorganization Event), except to the extent specifically
provided to the contrary in the instrument evidencing any Restricted Stock
Award
or any other agreement between a Participant and the Company, all restrictions
and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied if, on or prior to the first
anniversary of the date of the consummation of the Change of Control Event,
the
Participant’s employment with the Company or the acquiring or succeeding
corporation is terminated for Good Reason by the Participant or is terminated
without Cause by the Company or the acquiring or succeeding
corporation.
(4) Effect
on Stock Appreciation Rights and Other Stock Unit Awards
The
Board
may specify in an Award at the time of the grant the effect of a Reorganization
Event and Change in Control Event on any SAR and Other Stock Unit
Award.
10. General
Provisions Applicable to Awards
(a) Transferability
of Awards.
Awards
shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the
person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution or, other than in the
case of an Incentive Stock Option, pursuant to a qualified domestic relations
order, and, during the life of the Participant, shall be exercisable only by
the
Participant; provided, however, that the Board may permit or provide in an
Award
for the gratuitous transfer of the Award by the Participant to or for the
benefit of any immediate family member, family trust or family partnership
established solely for the benefit of the Participant and/or an immediate family
member thereof if, with respect to such proposed transferee, the Company would
be eligible to use a Form S-8 for the registration of the sale of the Common
Stock subject to such Award under the Securities Act of 1933, as amended;
provided, further, that
the
Company
shall not be required to recognize any such transfer until such time as the
Participant
and such
permitted transferee shall, as a condition to such transfer, deliver to the
Company a written instrument in form and substance satisfactory to the Company
confirming that such transferee shall be bound by all of the terms and
conditions of the Award. References to a Participant, to the extent relevant
in
the context, shall include references to authorized transferees.
(b) Documentation.
Each
Award shall be evidenced in such form (written, electronic or otherwise) as
the
Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.
(c) Board
Discretion.
Except
as otherwise provided by the Plan, each Award may be made alone or in addition
or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.
(d) Termination
of Status.
The
Board shall determine the effect on an Award of the disability, death,
retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during
which, the Participant, or the Participant’s legal representative, conservator,
guardian or Designated Beneficiary, may exercise rights under the
Award.
(e) Withholding.
Each
Participant shall pay to the Company, or make provision satisfactory to the
Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. Except as the Board may otherwise provide
in
an Award, for so long as the Common Stock is registered under the Exchange
Act,
Participants may satisfy such tax obligations in whole or in part by delivery
of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value; provided, however, except
as
otherwise provided by the Board, that the total tax withholding where stock
is
being used to satisfy such tax obligations cannot exceed the Company’s minimum
statutory withholding obligations (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). Shares surrendered to satisfy tax
withholding requirements cannot be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of
any
kind otherwise due to a Participant.
(f) Amendment
of Award.
The
Board may amend, modify or terminate any outstanding Award, including but not
limited to, substituting therefor another Award of the same or a different
type,
changing the date of exercise or realization, and converting an Incentive Stock
Option to a Nonstatutory Stock Option, provided that the Participant’s consent
to such action shall be required unless the Board determines that the action,
taking into account any related action, would not materially and adversely
affect the Participant.
(g) Conditions
on Delivery of Stock.
The
Company will not be obligated to deliver any shares of Common Stock pursuant
to
the Plan or to remove restrictions from shares previously delivered under the
Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel,
all other legal matters in connection with the issuance and delivery of such
shares have been satisfied, including any applicable securities laws and any
applicable stock exchange or stock market rules and regulations, and (iii)
the
Participant has executed and delivered to the Company such representations
or
agreements as the Company may consider appropriate to satisfy the requirements
of any applicable laws, rules or regulations.
(h) Acceleration.
The
Board may at any time provide that any Award shall become immediately
exercisable in full or in part, free of some or all restrictions or conditions,
or otherwise realizable in full or in part, as the case may be.
(i) Performance
Conditions.
(1) This
Section 10(i) shall be administered by a Committee approved by the Board, all
of
the members of which are “outside directors” as defined by Section 162(m) (the
“Section 162(m) Committee”).
(2) Notwithstanding
any other provision of the Plan, if the Section 162(m) Committee determines,
at
the time a Restricted Stock Award or Other Stock Unit Award is granted to a
Participant, that such Participant is, or may be as of the end of the tax year
in which the Company would claim a tax deduction in connection with such Award,
a Covered Employee (as defined in Section 162(m)), then the Section 162(m)
Committee may provide that this Section 10(i) is applicable to such
Award.
(3) If
a
Restricted Stock Award or Other Stock Unit Award is subject to this Section
10(i), then the lapsing of restrictions thereon and the distribution of cash
or
Shares pursuant thereto, as applicable, shall be subject to the achievement
of
one or more objective performance goals established by the Section 162(m)
Committee, which shall be based on the relative or absolute attainment of
specified levels of one or any combination of the following: (a) earnings per
share, (b) return on average equity or average assets with respect to a
pre-determined peer group, (c) earnings, (d) earnings growth, (e) revenues,
(f)
expenses, (g) stock price, (h) market share, (i) return on sales, assets, equity
or investment, (j) regulatory compliance, (k) improvement of financial ratings,
(l) achievement of balance sheet or income statement objectives, (m) total
shareholder return, (n) net operating profit after tax, (o) pre-tax or after-tax
income or (p) cash flow, and may be absolute in their terms or measured against
or in relationship to other companies comparably, similarly or otherwise
situated. Such performance goals may be adjusted to exclude any one or more
of
(i) extraordinary items, (ii) gains or losses on the dispositions of
discontinued operations, (iii) the cumulative effects of changes in accounting
principles, (iv) the writedown of any asset, and (v) charges for restructuring
and rationalization programs. Such performance goals: (i) may vary by
Participant and may be different for different Awards; (ii)
may
be particular to a Participant or the department, branch, line of business,
subsidiary or other unit in which the Participant works and may cover such
period as may be specified by the Section 162(m) Committee; and
(iii)
shall be
set by the Section 162(m) Committee within the time period prescribed by, and
shall otherwise comply with the requirements of, Section 162(m).
(4) Notwithstanding
any provision of the Plan, with respect to any Restricted Stock Award or Other
Stock Unit Award that is subject to this Section 10(i), the Section 162(m)
Committee may adjust downwards, but not upwards, the cash or number of Shares
payable pursuant to such Award, and the Section 162(m) Committee may not waive
the achievement of the applicable performance goals except in the case of the
death or disability of the Participant.
(5) The
Section 162(m) Committee shall have the power to impose such other restrictions
on Awards subject to this Section 10(i) as it may deem necessary or appropriate
to ensure that such Awards satisfy all requirements for “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any
successor provision thereto.
11. Miscellaneous
(a) No
Right To Employment or Other Status.
No
person shall have any claim or right to be granted an Award, and the grant
of an
Award shall not be construed as giving a Participant the right to continued
employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the
Plan,
except as expressly provided in the applicable Award or another written
agreement between the Company and the Participant.
(b) No
Rights As Stockholder.
Subject
to the provisions of the applicable Award, no Participant or Designated
Beneficiary shall have any rights as a stockholder with respect to any shares
of
Common Stock to be distributed with respect to an Award until becoming the
record holder of such shares. Notwithstanding the foregoing, in the event the
Company effects a split of the Common Stock by means of a stock dividend and
the
exercise price of and the number of shares subject to such Option are adjusted
as of the date of the distribution of the dividend (rather than as of the record
date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled
to receive, on the distribution date, the stock dividend with respect to the
shares of Common Stock acquired upon such Option exercise, notwithstanding
the
fact that such shares were not outstanding as of the close of business on the
record date for such stock dividend.
(c) Effective
Date and Term of Plan.
The
Plan shall become effective on the date on which it is adopted by the Board.
No
Awards shall be granted under the Plan after the completion of 10 years from
the
date on which the Plan was adopted by the Board, but Awards previously granted
may extend beyond that date.
(d) Amendment
of Plan.
The
Board may amend, suspend or terminate the Plan or any portion thereof at any
time, subject to any requirements of Section 162(m) for an Award granted to
a
Participant that is intended to comply with Section 162(m), and subject to
any
applicable laws or regulations. In addition, if at any time the approval of
the
Company’s stockholders is required as to any other modification or amendment,
the Board may not effect such modification or amendment without such approval.
(e) Provisions
for Foreign Participants.
The
Board may modify Awards or Options granted to Participants who are foreign
nationals or employed outside the United States or establish subplans or
procedures under the Plan to recognize differences in laws, rules, regulations
or customs of such foreign jurisdictions with respect to tax, securities,
currency, employee benefit or other matters.
(f) Compliance
With Code Section 409A.
No
Award shall provide for deferral of compensation that does not comply with
Section 409A of the Code, unless the Board, at the time of grant, specifically
provides that the Award is not intended to comply with Section 409A of the
Code.
(g) Governing
Law.
The
provisions of the Plan and all Awards made hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than such state.
Adopted
by the Board of Directors
on
October __, 2005
EXHIBIT
B TO EMPLOYMENT AGREEMENT
Agreement
re Specified Acts
Agreement
Re Specified Acts
This
Agreement re Specified Acts is made effective as of January __, 2006 by and
between Eclipsys Corporation, a Delaware corporation (hereinafter referred
to
collectively with any of its subsidiaries as the “Company”),
and
Xxxx X. Xxxxx (“Executive”).
The
Company and Executive are parties to that certain Employment Agreement of even
date herewith (the “Employment
Agreement”)
pursuant to which the Company employs Executive as its Executive Vice President.
Executive is receiving a grant of stock options to purchase up to 400,000 shares
of Common Stock of the Company and a grant of 100,000 shares of Common Stock
of
the Company that are subject to contractual restrictions, as described in the
Employment Agreement (the “Initial
Grants”),
and
Executive may become entitled to certain severance benefits described in the
Employment Agreement (the “Severance
Package”
or
the
“Change
in Control Benefits”).
In
addition, Executive may receive additional grants of stock options, restricted
stock, or other equity-based awards, and may become entitled to additional
severance benefits. It is a condition of Executive’s employment that Executive
enter into this Agreement with the Company. Accordingly, the Company and
Executive hereby agree as follows:
1.
Specified Acts.
(a) If,
at
any time during Executive’s employment with the Company or during the 730-day
period following the termination or cessation of Executive’s employment with the
Company for any reason, Executive commits any Specified Act (as defined below),
then notwithstanding any agreement or plan provision to the contrary, the
Company may in its discretion, at any time or from time to time during the
Evaluation Period related to that Specified Act (as defined below), (i) cancel
in whole or part the Initial Grants and/or any other award of stock options
or
restricted stock or any other award made at any time to Executive under any
equity incentive plan of the Company (each an “Award”),
whether or not vested, and/or (ii) rescind some or all of any vesting, exercise,
payment or delivery that occurred or occurs or is scheduled to occur pursuant
to
the Initial Grants or any other Award within 730 days before the earlier of
the
Specified Act or the termination of Executive’s employment, or at any time after
the Specified Act, and/or (iii) cease paying or providing any or all of the
Severance Package or the Change in Control, and/or (iv) demand that Executive
return to the Company any portion of the Severance Package or the Change in
Control Benefits previously paid, provided that cessation of payment pursuant
to
item (iii) and/or demand for return pursuant to item (iv) shall only apply
to
portions of the Severance Package or Change in Control Benefits in excess of
$150,000, which $150,000 shall be consideration for the release signed as
required by the Employment Agreement as a condition to payment of the Severance
Package or the Change in Control Benefits.
(b) The
Company shall notify Executive in writing of any exercise of any of its rights
under Section
1(a)
within
the Evaluation Period related to the Specified Act triggering the Company’s
rights.
(c) If
the
Company rescinds some or all of any vesting, exercise or delivery pursuant
to
Section
1(a)(ii),
then
within ten days after receiving from the Company the notice described in
Section
1(b),
Executive shall be obligated to pay to the Company the gross amount of any
gain
realized or payment received as a result of the cancelled Award or rescinded
vesting, exercise, payment or delivery. Such payment shall be made by returning
to the Company all shares of capital stock that Executive purchased or otherwise
received in connection with the cancelled Award or rescinded vesting, exercise,
payment or delivery, or if such shares or any interest therein have been
transferred by Executive, then by paying to the Company, by wire transfer of
immediately available funds, the fair market value of such shares at the time
of
the transfer. For this purpose, in the case of publicly traded shares, the
value
of shares will be measured by the price for which Executive sold the shares
in a
bona fide arm’s length transaction, or if the shares or interests therein were
transferred otherwise than by a bona fide arm’s length sale, then by the closing
price of the shares on the Nasdaq National Market or other primary market or
exchange upon which the shares trade on the trading day immediately preceding
the date of the transfer. Executive will cease to have any rights under any
Award, vesting, exercise, payment or delivery to the extent cancelled or
rescinded pursuant to this Agreement. Any payment of the exercise price for
stock options or purchase price for restricted stock previously made by
Executive to the Company in connection with an Award or vesting, exercise,
payment or delivery that is cancelled or rescinded pursuant to this Agreement
will be returned by the Company to Executive (without interest), at the time
Executive returns the shares or makes payment pursuant to Section
1(c),
including, at the Company's discretion, by offset against any amounts payable
by
Executive to the Company or any of the Company’s subsidiaries.
(d) If
the
Company demands return of previously paid portions of the Severance Package
or
the Change in Control Benefits pursuant to Section
1(a)(iv),
then
within ten days after receiving from the Company the notice described in
Section
1(b),
Executive shall pay to the Company, by wire transfer of immediately available
funds, an amount equal to the aggregate cost to the Company of any parts of
the
Severance Package or the Change in Control Benefits previously provided to
Executive by the Company that the Company demands be returned.
(e) Upon
and
as a condition to vesting, exercise, payment or delivery of shares or cash
pursuant to any Award, a Recipient shall, if required by the Administrator,
certify on a form acceptable to the Company that he has not committed any
Specified Act. For purposes of this Agreement, the Company will be deemed to
have been aware of Specified Act only after the completion of any investigation
or inquiry and only when the Company has clear and convincing evidence thereof.
For this purpose, suspicion is not awareness.
(f) For
these
purposes:
(i) “Evaluation
Period”
related
to a Specified Act means the period beginning with that Specified Act and ending
not later than the later of 365 days after such Specified Act, or, if later,
180
days after the Company became aware of such Specified Act.
(ii) “Specified
Act”
means
Employee (A) has a Specified Relationship with a Designated Company (as those
terms are defined below), or (B) violates in any material respect any material
contractual obligation or legal duty to the Company and, if such violation
of
contractual obligation or legal duty is susceptible of cure fails to cure such
violation within 30 days of written demand by the Company for cure, provided
that the final determination that such a violation of contractual obligation
or
legal duty has occurred and not been cured within such 30-day notice period
must
be made by the Company’s board of directors after giving Executive an
opportunity to be heard.
(iii) “Specified
Relationship”
with
a
Designated Company means acting as an owner, partner, officer, director, or
employee of, or consultant or advisor (paid or unpaid) or lender to, or investor
in, that Designated Company, except that ownership of not more than 1% of the
outstanding stock of a Designated Company, in and of itself, will not be a
Specified Relationship.
(iv)
“Designated
Company”
means
at any time of determination any of the entities listed on the Current Version
of Schedule
A
to this
Agreement and any Affiliate of any of such entities regardless of when formed.
At no time may there be more than ten Designated Companies listed on
Schedule
A,
and if
any version of Schedule
A
lists
more than ten companies, then only the first ten listed on Schedule
A,
reading
left to right, top to bottom, will be Designated Companies pursuant to that
schedule, but Affiliates of the listed entities will be Designated Companies
but
will not be counted for purposes of this ten-entity limit. In addition, each
of
the following shall be a Designated Company, in addition to the Designated
Companies listed on Schedule
A
and not
subject to the ten-entity limit: (i) any entity that is a successor to or
transferee of any significant part of the business or assets of an entity listed
on the Current Version; and (ii) any entity that first engages in competitive
activity following the date of the Current Version. For this purpose, an entity
first engages in competitive activity when it openly begins to provide or pursue
any goods or services or line of business that is competitive in any material
way with any goods or services or line of business provided or being pursued,
or
for which plans were being made, during Executive’s tenure with the Company. The
“Current
Version”
of
Schedule
A
is the
version attached to this Agreement at the date of its execution unless and
until
Schedule
A
is
modified as set forth in paragraph 1(f)(iv)(A) or 1(f)(iv)(B) below. The Current
Version need not be the same as the list of competitors specified by the Company
for any agreement entered into by the Company or any of its affiliates with
any
other employee that is similar to this Agreement.
(A)
At
any
time and from time to time from the date hereof until the date seven days
following the termination of Executive’s employment for any reason, but not more
than once in any period of 180 days, the Company may, in its discretion, by
written notice to Executive, modify the Current Version to include any company
or companies that the Company in its discretion deems to be engaged in or
planning any activity that is competitive with the Company’s business as
conducted or planned, subject to the overall limit of ten, and that modified
version of the schedule will then be the Current Version unless and until
further modified pursuant to this paragraph 1(f)(iv)(A) or paragraph
1(f)(iv)(B).
(B)
Not
more
than once in any period of 180 days, Executive may by written demand require
the
Company to provide an updated Current Version. In response, within seven days
of
receipt of Executive’s demand, the Company must deliver to Executive an updated
Current Version or ratify in writing the then-existing Current Version. Any
such
updated Current Version may include, in the Company’s discretion, any company or
companies that the Company in its discretion deems to be engaged in or planning
any activity that is competitive with the Company’s business as conducted or
planned, subject to the overall limit of ten. The Company may elect to deliver
an updated Current Version in response to Executive’s demand even if the Company
has modified the schedule in its own discretion within the preceding 180 days,
but in any case the Current Version provided by the Company in response to
Executive’s demand (whether updated or ratified) will trigger a new 180-day
waiting period before the Company may again modify the schedule in its
discretion pursuant to paragraph 1(f)(iv)(A). Any Current Version resulting
from
the process described in this paragraph 1(f)(iv)(B) will be the Current Version
unless and until further modified pursuant to this paragraph 1(f)(iv)(B) or
paragraph 1(f)(iv)(A).
(v) “Affiliate”
of
an
entity means any controlling, controlled by or under common control with such
entity.
(g) Executive
understands and agrees that (i) his entering into this Agreement is a material
inducement to the Company to employ him on the terms described in the Employment
Agreement; (ii) the Initial Grants and any other equity that the Company may
grant to Executive, the Severance Package and the Change in Control Benefits
(other than the first $200,000 thereof) are intended not only to motivate and
reward Executive’s performance, but also to compensate Executive for not
engaging in any specified Act; (iii) Executive is not restricted by this
Agreement from engaging in any Specified Act, and Executive is willing to accept
the potential economic consequences under this Agreement of engaging in any
Specified Act; (iv) Executive’s livelihood does not depend upon his ability to
engage in any Specified Act; and (v) Executive shall not bring or participate
in
any action challenging the, validity, legality, effectiveness or enforceability
of any part of this Agreement.
2. General
Provisions.
(a) No
Contract of Employment.
This
Agreement does not constitute a contract of employment, either express or
implied, and does not imply that the Company will continue the Executive’s
employment for any period of time. This Agreement shall in no way alter the
Company’s policy of employment at will, under which both Executive and the
Company remain free to terminate the employment relationship, with or without
cause, at any time, with or without notice. Any change or changes in Executive’s
duties, salary or compensation after the signing of this Agreement shall not
affect the validity or scope of this Agreement.
(b) Entire
Agreement.
This
Agreement sets forth the entire understanding of Executive and the Company
regarding the subject matter hereof, and supersedes all prior agreements,
written or oral, between the Executive and the Company relating to the subject
matter hereof. However, it does not replace or supersede the Employment
Agreement, any agreements documenting equity awards to Executive, any policies
of the Company or agreements entered into by Executive providing for
confidentiality, non-disclosure or assignment of developments, all of which
remain in full force and effect. This Agreement may not be modified, changed
or
discharged in whole or in part, except by an agreement in writing signed by
the
Executive and the Company.
(c) Interpretation.
If any
provision of this Agreement is found by any court of competent jurisdiction
to
be unenforceable, it shall be interpreted to apply only to the extent that
it is
enforceable.
(d) Severability.
If any
part of this Agreement as applied to any party or to any circumstance is
adjudged by a court of competent jurisdiction to be invalid, illegal, void
or
unenforceable for any reason, then (i) the invalidity of that part shall in
no
way affect (to the maximum extent permissible by law) the application of such
part under circumstances different from those adjudicated by the court, the
application of any other part of this Agreement, or the enforceability or
invalidity of this Agreement as a whole; and (ii) such part shall be deemed
amended to the extent necessary to conform to applicable law so as to be valid,
legal, effective and enforceable or, if such part cannot be so amended without
materially altering the intention of the parties, then such part will be
stricken and the remainder of this Agreement shall continue in full force and
effect.
(e) Waiver.
No
delay or omission by the Company in exercising any right under this Agreement
will operate as a waiver of that or any other right. A waiver or consent given
by the Company on any one occasion is effective only in that instance and will
not be construed as a bar to or waiver of any right on any other
occasion.
(f) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of both parties and
their respective successors and assigns, including any corporation or entity
with which or into which the Company may be merged or which may succeed to
its
assets or business.
(g) Subsidiaries
and Affiliates.
Executive expressly consents to be bound by the provisions of this Agreement
for
the benefit of the Company or any subsidiary or affiliate thereof to whose
employ the Executive may be transferred without the necessity that this
Agreement be re-signed at the time of such transfer.
(h) Remedies
not Limited.
This
Agreement and the Company’s enforcement hereof are not intended to be exclusive
remedies and will not limit any other remedies that may be available to the
Company at law or in equity as a result of or in connection with any violation
by Executive of any contractual obligation or legal duty to the Company or
any
subsidiary or affiliate thereof.
(i) Governing
Law, Forum and Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Florida (without reference to its conflicts of law provisions). If
any
judicial or administrative proceeding or claim relating to or pertaining to
this
Agreement is initiated by either party hereto, such proceeding or claim shall
and must be filed in a state or federal court located in Palm Beach County
or
Miami-Dade County, Florida, and the Company and Executive each consents to
the
jurisdiction of such a court.
(j) Attorneys’
Fees.
In
the
event that either party brings a legal action against
the other in connection with this Agreement,
the
party, if either, that is judicially determined to be the prevailing party
in
such action shall be entitled to recover his or its reasonable attorney’s fees
and legal costs incurred in connection with such action.
(k) Captions.
The
captions of the sections of this Agreement are for convenience of reference
only
and in no way define, limit or affect the scope or substance of any section
of
this Agreement.
In
witness whereof, the Company and Executive have entered into this Agreement
as
of the date above set forth.
|
ECLIPSYS
CORPORATION
By:_______________________
Name:
R. Xxxxxx Xxxxxx
Title:
Chairman & CEO
|
_________________________
Xxxx
X. Xxxxx
|
Schedule
A To Agreement Re Specified Acts
Designated
Companies
[
* ]
EXHIBIT
C TO EMPLOYMENT AGREEMENT
Release
RELEASE
This
Release (this “Release”)
is
entered into as of _______________, by Xxxx X. Xxxxx(“Executive”)
in
favor of Eclipsys Corporation (“Eclipsys” or the “Company”) and certain other
parties as set forth herein.
Contingent
upon Executive’s execution and delivery to the Company of this Release, and the
effectiveness of this Release following the lapse without revocation of any
revocation period, the Company is obligated to provide to Executive the
“Severance
Package”
as
defined in and pursuant to that certain Employment Agreement entered into as
of
January __, 2006 by and between Executive and the Company (the “Employment
Agreement”).
In
consideration of Executive’s right to receive the Severance Package, Executive
hereby agrees as follows:
1. Termination
Date.
The
effective date of Executive’s termination of employment with the Company is
________________.
2. Release.
(a)
As of
the Effective Date (as defined below), Executive, for Executive and Executive’s
assigns, heirs, executors, successors and administrators, hereby fully and
unconditionally releases the Company, its subsidiaries and other affiliates,
their respective successors, and the officers, directors, employees,
stockholders, attorneys and agents of each of them (the “Released
Parties”),
from
any and all claims, causes of action, rights, agreements, obligations,
liabilities, and expenses (including attorneys’ fees and costs), of every kind
and nature, whether known or unknown, suspected or unsuspected, liquidated
or
unliquidated, arising out of, relating to or in any way connected with
Executive’s employment with or separation from the Company (the “Released
Matters”).
The
Released Matters include, but are not limited to, claims for wrongful
termination, breach of contract, breach of the covenant of good faith and fair
dealing, tort, intentional or negligent infliction of emotional distress,
defamation, invasion of privacy, fraud, negligent misrepresentation, violation
of or rights under local, state or federal law, ordinance or regulation, all
common law claims, and all claims to any non-vested ownership interest in the
Company, contractual or otherwise, including but not limited to claims to
non-vested stock or non-vested stock options. However, Released Matters do
not
include, and nothing in this Release waives or releases or prevents Executive
from in any way pursuing any rights or claims Executive may have (i) to
indemnity and defense from the Company pursuant to provisions of the Company’s
charter documents, any contract of indemnity, or applicable law; (ii) to
coverage under policies of insurance maintained by the Company (including
without limitation insurance covering directors’ and officers’ liability,
fiduciary liability, employment practices liability, general liability, and
automobile damage and liability) according to the terms of such policies; (iii)
to the Accrued Amounts and Severance Package [or
substitute Change in Control Benefits, if appropriate]
as
defined in the Employment Agreement; (iv) to reimbursement of expenses properly
incurred by Executive in the course of his service to the Company; (v) under
plans or contracts governing equity awards made to Executive; (vi) as a former
employee under the Company’s retirement and welfare plans under which Executive
is a beneficiary or in which Executive is a participant, including without
limitation the Company’s 401(k) plan and plans or policies or insurance
providing for health care; or (vi) as a stockholder of the Company.
(b)
Executive acknowledges and agrees that the releases made herein constitute
final
and complete releases of the Released Parties with respect to all Released
Matters, and that by signing this Release, Executive is forever giving up the
right to xxx or attempt to recover money, damages or any other relief from
the
Released Parties for all claims Executive has or may have with respect to the
Released Matters (even if any such claim is unforeseen as of the date hereof).
(c)
[insert
the following or other state equivalent if appropriate] Executive
represents and warrants that Executive understands California Civil Code
Section 1542, which provides as follows:
"A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH
THE DEBTOR."
Executive,
being aware of Section 1542, hereby expressly waives any and all rights
Executive may have thereunder as well as under any other statute or common
law
principles of similar effect under the laws of any state or the United States.
This Release shall act as a release of all future claims that may arise from
the
Released Matters, whether such claims are currently known or unknown, foreseen
or unforeseen including, without limitation, any claims for damages incurred
at
any time after the date of this Release resulting from the acts or omissions
which occurred on or before the date of this Release of any of the Released
Parties.
Thus,
notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of the Released Parties,
Executive expressly acknowledges that this Release is intended to include in
its
effect, without limitation, all Released Matters which Executive does not know
or suspect to exist in his favor at the time of execution hereof, and that
this
Release contemplates the extinguishment of all such Released
Matters.
3. No
Claims.
Executive represents and warrants that Executive has not instituted any
complaints, charges, lawsuits or other proceedings against any Released Parties
with any governmental agency, court, arbitration agency or tribunal. Executive
further agrees that, except to the extent that applicable law prohibits such
agreements, Executive will not, directly or indirectly, (i) file, bring,
cause to be brought, join or participate in, or provide any assistance in
connection with any complaint, charge, lawsuit or other proceeding or action
against any Released Parties at any time hereafter for any Released Matters,
(ii) assist, encourage, or support employees or former employees or
stockholders or former stockholders of Eclipsys or any of its affiliates in
connection with any lawsuit, charge, claim or action they may initiate, unless
compelled to testify by appropriate civil processes; or (iii) defend any
action, proceeding or suit in whole or in part on the grounds that any or all
of
the terms or provisions of this Release are illegal, invalid, not binding,
unenforceable or against public policy. In addition, Executive will refrain
from
bringing or dismiss, as applicable, any claim against any third party if any
Released Party would be required to defend or indemnify that third party in
connection with such claim. If any agency or court assumes jurisdiction of
any
complaint, charge, or lawsuit against Eclipsys or any Released Party, on
Executive’s behalf, Executive agrees to immediately notify such agency or court,
in writing, of the existence of this Release, including providing a copy of
it
and to request, in writing, that such agency or court dismiss the matter with
prejudice.
4. Non-Disclosure
and Non-Solicitation.
Executive acknowledges and reaffirms his obligation to keep confidential all
non-public information concerning the Company which he acquired during the
course of his employment with the Company and his post-employment obligations
to
refrain from soliciting the Company’s employees or clients, as stated more fully
in the Confidentiality, Non-Disclosure and Developments Agreement Executive
executed in connection with the inception of his employment, which remains
in
full force and effect. Executive also acknowledges the Agreement re Specified
Acts entered into between Executive and the Company in connection with the
inception of his employment, which remains in full force and effect.
5. Return
of Company Property.
Executive shall immediately return to the Company all keys, files, records
(and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, wireless handheld devices, cellular phones, pagers,
etc.), Company identification, Company vehicles and any other Company-owned
property in his possession or control. Executive confirms that he has left,
and
will continue to leave, intact all electronic Company documents, including
but
not limited to those Executive developed or helped develop during his
employment. Executive further confirms that he has cancelled or shall
immediately cancel all accounts for his benefit, if any, in the Company's name,
including but not limited to, credit cards, telephone charge cards, cellular
phone and/or pager accounts and computer accounts.
6. Business
Expenses and Compensation.
Executive acknowledges that he has been reimbursed by the Company for all costs
and business expenses incurred in conjunction with the performance of his
employment and that no other reimbursements are owed to him, except for
unreimbursed expenses properly incurred by him in the course of his service
to
the Company that he submits within 30 days after the date of this Release.
Executive further acknowledges that he has received payment in full for all
services rendered in conjunction with his employment by the Company and that
no
other compensation is owed to his, other than the Accrued Amounts and the
Severance Package as defined in the Employment Agreement.
7. Non-Disparagement.
Executive shall not make any false, disparaging or derogatory statements to
any
media outlet, industry group, financial institution or current or former
employee, consultant, or customer of the Company, or any other third party,
regarding any Released Party.
8. Amendment.
This
Release is binding upon Executive and may not be modified in any manner, except
by an instrument in writing of concurrent or subsequent date signed by Executive
and a duly authorized representative of Eclipsys. This Release is binding upon
Executive and his assigns, heirs, executors, successors and administrators,
and
shall inure to the benefit of all the Released Parties.
9. Waiver
of Rights.
No
delay or omission by the Company in exercising any right under this Release
shall operate as a waiver of that or any other right. A waiver or consent given
by the Company on any one occasion shall be effective only in that instance
and
shall not be construed as a bar or waiver of any right on any other
occasion.
10. Validity.
If any
part of this Release is determined by any court of competent jurisdiction to
be
void, illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining parts shall not be affected thereby and said
void, illegal, invalid or unenforceable part shall be deemed not to be a part
of
this Release.
11. Nature
of Agreement.
This
Release is part of a severance arrangement and does not constitute an admission
of liability or wrongdoing on the part of Executive, the Company or any other
person.
12. Acknowledgments.
Executive acknowledges that he has been given at least twenty-one (21) days
to
consider this Release and that the Company advised him to consult with an
attorney of his own choosing prior to signing this Release. Executive
understands that he may revoke this Release for a period of seven (7) days
after
its execution and delivery. The eighth (8th)
day
after Executive’s execution and delivery of this Release will be its
“Effective
Date.”
This
Release will be effective and enforceable beginning on the Effective Date unless
Executive delivers written revocation of this Release to the Company’s Chief
Executive Officer and General Counsel, or persons acting in those capacities,
before the Effective Date, in which case this Release will be of no force or
effect. Executive understands and agrees that by entering into this Release
he
is waiving any and all rights or claims he might have under The Age
Discrimination in Employment Act, as amended by The Older Workers Benefit
Protection Act, and that he has received consideration beyond that to which
he
was previously entitled.
13. Voluntary
Assent.
-
Executive represents and agrees that he fully understands his right to discuss,
and that Eclipsys has advised Executive to discuss, all aspects of this Release
with Executive’s private attorney, that Executive has carefully read and fully
understands all the provisions of the Release, that Executive understands its
final and binding effect, that Executive is competent to sign this Release
and
that Executive is voluntarily entering into this Release. Executive specifically
agrees not to claim, and has waived any right to claim, to have been under
duress in connection with the review, negotiation, execution and delivery of
this Release.
14. Applicable
Law.
This
Release shall be interpreted and construed in accordance with the laws of the
State of Florida, without regard to conflict of laws provisions.
15. Entire
Agreement.
This
Release contains and constitutes the entire understanding and agreement between
Executive and the Company regarding the matters set forth herein, but provisions
of other agreements between Executive and the Company (including without
limitation the Employment Agreement, the Restricted Stock Agreement, the
Agreement re Specified Acts, and grant notices for equity awards) that by their
nature or terms are intended to survive termination of employment will continue
in effect. Executive represents and agrees that in executing this Release
Executive relies solely upon his own judgment, belief and knowledge, and the
advice and recommendations of any independently selected counsel, concerning
the
nature, extent and duration of Executive’s rights and claims. Executive
acknowledges that no other individual has made any promise, representation
or
warranty, express or implied, not contained in this Release, to induce Executive
to execute this Release. Executive further acknowledges that Executive is not
executing this Release in reliance on any promise, representation, or warranty
not contained in this Release.
In
witness whereof, Executive has executed this Release as of the date above
written.
________________________
Xxxx
X.
Xxxxx
US1DOCS
5148638v2
EXHIBIT
D TO EMPLOYMENT AGREEMENT
Definition
of Change in Control
“Change
in Control”
means
an event or occurrence set forth in any one or more of subsections (a) through
(d) below (including an event or occurrence that constitutes a Change in Control
under one of such subsections but is specifically exempted from another such
subsection) that occurs during the Term of Employment:
(a)
the
acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”))
(a
“Person”)
of
beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 30% or more of either (x) the
then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”)
or (y)
the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”);
provided,
however,
that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company
(excluding an acquisition pursuant to the exercise, conversion or exchange
of
any security exercisable for, convertible into or exchangeable for common stock
or voting securities of the Company, unless the Person exercising, converting
or
exchanging such security acquired such security directly from the Company or
an
underwriter or agent of the Company), (ii) any acquisition by the Company,
(iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, (iv)
any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i) and (ii) of subsection (c) below; or (v) any acquisition by
General Atlantic Partners 28, L.P., General Atlantic Partners 38, L.P., General
Atlantic Partners 47, L.P., GAP Coinvestment Partners, L.P., General Atlantic
Partners, LLC, and any person directly or indirectly controlled (within the
meaning of Rule 12b-2 promulgated under the Exchange Act) by any of the
foregoing entities described in this clause (v) (each such party is referred
to
herein as an “Exempt
Person”)
of any
shares of Common Stock; or
(b)
such
time
as the Continuing Directors (as defined below) do not constitute a majority
of
the Board (or, if applicable, the Board of Directors of a successor corporation
to the Company), where the term “Continuing
Director”
means
at any date a member of the Board (i) who was a member of the Board on the
date
of the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of
the
directors who were Continuing Directors at the time of such nomination or
election; provided,
however,
that
there shall be excluded from this clause (ii) any individual whose initial
assumption of office occurred as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual
or
threatened solicitation of proxies or consents, by or on behalf of a person
other than the Board; or
(c) the
consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving the Company or a sale or other disposition
of
all or substantially all of the assets of the Company in one or a series of
transactions (a “Business
Combination”),
unless, immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals
and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all
of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”)
in
substantially the same proportions as their ownership, immediately prior to
such
Business Combination, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively; and (ii) no Person (excluding the
Acquiring Corporation, any employee benefit plan (or related trust) maintained
or sponsored by the Company or by the Acquiring Corporation, or any Exempt
Person) beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or
(d) approval
by the stockholders of the Company of a complete liquidation or dissolution
of
the Company.
EXHIBIT
E TO EMPLOYMENT AGREEMENT
Confidentiality,
Non-disclosure and Developments Agreement
CONFIDENTIALITY,
NON-DISCLOSURE AND DEVELOPMENTS AGREEMENT
This
Confidentiality, Non-Disclosure and Developments Agreement is made as of January
__, 2006 by and between Eclipsys Corporation, a Delaware corporation
headquartered in Florida (hereinafter referred to collectively with any of
its
subsidiaries as the “Company”), and Xxxx X. Xxxxx (the “Employee”).
WHEREAS,
the Company desires to employ the Employee;
THEREFORE,
IN CONSIDERATION of the employment of the Employee by the Company, the Employee
and the Company agree as follows:
1. Condition
of Employment.
The
Employee acknowledges that his
employment with the Company is contingent upon his
agreement to sign and adhere to the provisions of this Confidentiality,
Non-Disclosure and Developments Agreement (“Agreement”).
2. Proprietary
and Confidential Information.
(a) The
Employee agrees that all information, whether or not in writing, of a private,
secret or confidential nature concerning the Company’s business, business
relationships or financial affairs (collectively, “Proprietary Information”) is
and shall be the exclusive property of the Company. By way of illustration,
but
not limitation, Proprietary Information may include discoveries, inventions,
products, product improvements, product enhancements, processes, methods,
techniques, formulas, compositions, compounds, negotiation strategies and
positions, projects, developments, plans (including business and marketing
plans), research data, clinical data, financial data (including sales costs,
profits, pricing methods), personnel data, computer programs (including software
used pursuant to a license agreement), customer and supplier lists, and contacts
at or knowledge of customers or prospective customers of the Company. The
Employee will not disclose any Proprietary Information to any person or entity
other than employees of the Company or use the same for any purposes (other
than
in the performance of his
duties
as an employee of the Company) without written approval by an officer of the
Company, either during or after his
employment with the Company, unless and until such Proprietary Information
has
become public knowledge without fault by the Employee.
(b) The
Employee agrees that all files, documents, letters, memoranda, reports, records,
data, sketches, drawings, models, laboratory notebooks, program listings,
computer equipment or devices, computer programs or other written, photographic,
or other tangible material containing Proprietary Information, whether created
by the Employee or others, which shall come into his
custody
or possession, shall be and are the exclusive property of the Company to be
used
by the Employee only in the performance of his
duties
for the Company and shall not be copied or removed from the Company premises
except in the pursuit of the business of the Company. All such materials or
copies thereof and all tangible property of the Company in the custody or
possession of the Employee shall be delivered to the Company, upon the earlier
of (i) a request by the Company or (ii) termination of his
employment. After such delivery, the Employee shall not retain any such
materials or copies thereof or any such tangible property.
(c) The
Employee agrees that his
obligation not to disclose or to use information and materials of the types
set
forth in paragraphs 2(a) and 2(b) above, and his
obligation to return materials and tangible property set forth in paragraph
2(b)
above also extends to such types of information, materials and tangible property
of customers of the Company or suppliers to the Company or other third parties
who may have disclosed or entrusted the same to the Company or to the
Employee.
3. Developments.
(a) The
Employee will make full and prompt disclosure to the Company of all inventions,
creations, improvements, discoveries, trade secrets, secret processes,
technology, know-how, methods, developments, software, and works of authorship
or other creative works, whether patentable or not, which are created, made,
conceived or reduced to practice by him
or under
his
direction or jointly with others during his
employment by the Company, whether or not during normal working hours or on
the
premises of the Company (all of which are collectively referred to in this
Agreement as “Developments”).
(b) Employee
agrees to assign and does hereby assign to the Company (or any person or entity
designated by the Company) all his
right,
title and interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this
paragraph 3(b) shall not apply to Developments that do not relate to the
present or planned business or research and development of the Company and
which
are made and conceived by the Employee not during normal working hours, not
on
the Company’s premises and not using the Company’s tools, devices, equipment or
Proprietary Information. The Employee understands that, to the extent this
Agreement shall be construed in accordance with the laws of any state that
precludes a requirement in an employee agreement to assign certain classes
of
inventions made by an employee, this paragraph 3(b) shall be interpreted
not to apply to any invention that a court rules and/or the Company agrees
falls
within such classes. In addition, for purposes of California law, this provision
shall apply only to the maximum extent permitted by Section 2870 of the
California Labor Code (attached hereto as Attachment
A).
The
Employee understands that the provisions of this Agreement requiring assignment
of Developments to the Company do not apply to any invention that qualifies
fully under the provisions of California Labor Code Section 2870. The Employee
agrees to advise the Company promptly in writing of any invention
that
he
believes
meets the criteria in Section 2870 that are not otherwise disclosed on
Attachment
B.
The
Employee also hereby waives all claims to moral rights in any Developments.
(c) The
Employee agrees to cooperate fully with the Company and to take such further
actions as may be necessary or desirable, both during and after his
employment with the Company, with respect to the procurement, maintenance and
enforcement of copyrights, patents and other intellectual property rights (both
in the United States and foreign countries) relating to Developments. The
Employee shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments,
assignments of priority rights, and powers of attorney, which the Company may
deem necessary or desirable in order to protect its rights and interests in
any
Development. The Employee further agrees that if the Company is unable, after
reasonable effort, to secure the signature of the Employee on any such papers,
any executive officer of the Company shall be entitled to execute any such
papers as the agent and the attorney-in-fact of the Employee, and the Employee
hereby irrevocably designates and appoints each executive officer of the Company
as his
agent
and attorney-in-fact to execute any such papers on his
behalf,
and to take any and all actions as the Company may deem necessary or desirable
in order to protect its rights and interests in any Development, under the
conditions described in this sentence.
4. Other
Agreements.
The
Employee hereby represents that, except as the Employee has disclosed in writing
to the Company, the Employee is not bound by the terms of any agreement with
any
previous employer or other party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the course of
his
employment with the Company, to refrain from competing, directly or indirectly,
with the business of such previous employer or any other party, or to refrain
from soliciting employees, customers or suppliers of such previous employer
or
other party. The Employee further represents that his
performance of all the terms of this Agreement and the performance of
his
duties
as an employee of the Company do not and will not breach any agreement with
any
prior employer or other party to which the Employee is a party (including
without limitation any non-disclosure or non-competition agreement), and that
the Employee will not disclose to the Company or induce the Company to use
any
confidential or proprietary information or material belonging to any previous
employer or others.
5. United
States Government Obligations.
The
Employee acknowledges that the Company from time to time may have agreements
with
other
persons or with the United States Government, or agencies thereof, which impose
obligations or restrictions on the Company regarding inventions made during
the
course of work under such agreements or regarding the confidential nature of
such work. The Employee agrees to be bound by all such obligations and
restrictions that are made known to the Employee and to take all action
necessary to discharge the obligations of the Company under such
agreements.
6. Non-Solicitation.
While
employed by the Company, the Employee shall devote all of his
business
time, attention, skill and effort to the faithful performance of his
duties
for the Company. For
a
period of 1 year after the termination or cessation of Employee’s employment for
any reason, the Employee will not, in the geographical areas that the Company
or
any of its subsidiaries does business or has done business at the time of
Employee’s departure, directly or indirectly:
(a) Either
alone or in association with others (i) solicit, recruit, induce, or attempt
to
solicit, recruit or induce, or permit any organization directly or indirectly
controlled by the Employee to solicit, recruit, induce, or attempt to solicit,
recruit or induce any employee of the Company to leave the employ of the
Company, or (ii) solicit, recruit, induce, or attempt to solicit, recruit or
induce for employment, or permit any organization directly or indirectly
controlled by the Employee to solicit, recruit, induce, or attempt to solicit,
recruit or induce for employment, any person who was employed by the Company
at
any time during the term of the Employee’s employment with the Company;
provided, that this clause (ii) shall not apply to any individual's employment
with the Company, which has been terminated for a period of six months or
longer; or
(b) Either
alone or in association with others, solicit, divert or take away, or attempt
to
solicit, divert or take away, or permit any organization directly or indirectly
controlled by the Employee to solicit, divert or take away, or attempt to
solicit, divert or take away, the business or patronage of any of the clients,
customers or accounts, or prospective clients, customers or accounts, of the
Company, which were contacted, solicited or served by the Company at any time
during the term of the Employee’s employment with the Company.
7. Not
An
Employment Contract.
The
Employee acknowledges that this Agreement does not constitute a contract of
employment, either express or implied, and does not imply that the Company
will
continue the Employee’s employment for any period of time. This Agreement shall
in no way alter the Company’s policy of employment at will, under which both the
Employee and the Company remain free to terminate the employment relationship,
with or without cause, at any time, with or without notice.
8. General
Provisions.
(a) No
Conflict.
The
Employee represents that the execution and performance by him
of this
Agreement does not and will not conflict with or breach the terms of any other
agreement by which the Employee is bound.
(b) Entire
Agreement.
This
Agreement supersedes all prior agreements, written or oral, between the Employee
and the Company relating to the subject matter of this Agreement. This Agreement
may not be modified, changed or discharged in whole or in part, except by an
agreement in writing signed by the Employee and the Company. The Employee agrees
that any change or changes in his
duties,
salary or compensation after the signing of this Agreement shall not affect
the
validity or scope of this Agreement.
(c) Interpretation.
If the
Employee violates the provisions of Section 6 of this Agreement, the Employee
shall continue to be bound by the restrictions set forth in Section 6 until
a
period of 1 year has expired without any violation of such provisions. If any
restriction set forth in Section 6 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range
of
activities or geographic area as to which it may be enforceable.
(d) Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect or impair the validity or enforceability of any other provision of this
Agreement.
(e) Waiver.
No
delay or omission by the Company in exercising any right under this Agreement
will operate as a waiver of that or any other right. A waiver or consent given
by the Company on any one occasion is effective only in that instance and will
not be construed as a bar to or waiver of any right on any other
occasion.
(f) Employee
Acknowledgment and Equitable Remedies.
The
Employee acknowledges that the restrictions contained in this Agreement are
necessary for the protection of the business and goodwill of the Company and
considers the restrictions to be reasonable for such purpose. The Employee
agrees that any breach of this Agreement is likely to cause the Company
substantial and irrevocable damage and that therefore, in the event of any
breach of this Agreement, the Employee agrees that the Company, in addition
to
such other remedies that may be available, shall be entitled to specific
performance and other injunctive relief without posting a bond.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of both parties and
their respective successors and assigns, including any corporation or entity
with which or into which the Company may be merged or which may succeed to
its
assets or business, provided however that the obligations of the Employee are
personal and shall not be assigned by the Employee.
(h) Subsidiaries
and Affiliates.
The
Employee expressly consents to be bound by the provisions of this Agreement
for
the benefit of the Company or any subsidiary or affiliate thereof to whose
employ the Employee may be transferred without the necessity that this Agreement
be re-signed at the time of such transfer.
(i) Governing
Law, Forum and Jurisdiction.
This
Agreement shall be governed by and construed as a sealed instrument under and
in
accordance with the laws of the State of California (without reference to the
conflicts of law provisions thereof). Any action, suit, or other legal
proceeding that is commenced to resolve any matter arising under or relating
to
any provision of this Agreement shall be commenced only in a court in the City
and County of San Francisco, California (or, if appropriate, a federal court
located within the City and County of San Francisco, California), and the
Company and the Employee each consents to the jurisdiction of such a
court.
(j) Captions.
The
captions of the sections of this Agreement are for convenience of reference
only
and in no way define, limit or affect the scope or substance of any section
of
this Agreement.
THE
EMPLOYEE ACKNOWLEDGES THAT HE
HAS
CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE
PROVISIONS IN THIS AGREEMENT.
|
ECLIPSYS
CORPORATION
By:_______________________
Name:
R. Xxxxxx Xxxxxx
Title:
Chairman & CEO
|
_________________________
Xxxx
X. Xxxxx
|
Attachment
A
CALIFORNIA
LABOR CODE SECTION 2870
INVENTION
ON OWN TIME - EXEMPTION FROM AGREEMENT
(a) Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his rights
in an invention to his employer
shall not apply to an invention that the employee developed entirely on
his
own time without using the employer’s equipment, supplies, facilities, or trade
secret information except for those inventions that
either:
(1) Relate
at the time of conception or reduction to practice of the invention to the
employer’s
business, or actual or demonstrably anticipated research or
development
of the employer, or
(2) Result
from any work performed by the employee for his employer.
(b) To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy
of
this state and is unenforceable.
Attachment
B
LIST
OF PRIOR INVENTIONS
AND
ORIGINAL WORKS OF AUTHORSHIP
|
Title
|
Date
|
Identifying
Number or Brief Description
|
No
inventions or improvements
Additional
Sheets Attached
Signature
of Employee:
Printed
Name of Employee: Xxxx
X.
Xxxxx
Date: January
__. 2006
