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Exhibit 10.45
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this
30th day of January, 1998, by and between MEDAPHIS CORPORATION, a Delaware
corporation (the "Company"), and Xxxxxxx Xxxxxx, a resident of the State of
Alabama (the "Employee").
Statement of Background Information
The Company renders to hospitals, physicians, and/or other healthcare
organizations and providers: (a) billing services, accounts receivable
management services, collection services, electronic claims services, financial
management services, and practice and facilities management services: (b)
eligibility verification and certification for Medicaid, Medicare and other
healthcare assistance programs; " filing and other medical claims securitization
services; (d) medical coverage information services; and (e) medical and
insurance claims monitoring and tracking services (collectively the "Processing
Business").
The Company also: (a) develops, markets and licenses to hospitals,
integrated healthcare delivery systems, and other healthcare providers and other
end users (collectively "Providers"), (I) strategic, operational and financial
information systems and services and decision support tools for healthcare
providers, (ii) software systems which provide claims and reimbursement services
and electronic claims processing, and (iii) software applications which assist
Providers with automated scheduling and resource management (the items discussed
in Sections (a)(I), (a)(ii) and (a)(iii) of this paragraph are referred to as
"Systems"), which Systems include, but are not limited to, nurse scheduling and
management information systems, operating room patient scheduling and surgery
information systems, enterprise wide patient scheduling and resource management
systems, enterprise-wide employee scheduling and management information systems
and related software interfaces to other information systems; and (b) provides
to Providers installation and support services related to the Company"s Systems
(the "Systems Business").
The Company also renders professional services with respect to the
development of computer software, algorithms, design, documentation, and related
materials, and the development, design, deployment, and operation of local and
wide area computer networks, all in conjunction with the sale, design,
deployment, operation and maintenance of custom computer processing systems for
improvement of operational efficiency or functionality through the use of image
storage and processing, work flow technology, optical character recognition or
other related technologies (the "System Integration Business") (the Processing
Business, the Systems Business, the Systems Integration Business and any other
distinct business segment in which the Company engages during Employee"s
employment are collectively referred to herein as the "Business").
In consideration of the mutual covenants, promises and conditions set forth
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
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1. Employment. The Company hereby employs Employee and Employee hereby accepts
such employment upon the terms and conditions set forth in this Agreement. For
purposes of Sections 7 and 8 of this Agreement, "employment" shall mean any
period of time during which the Company is paying the Employee salary, wages, or
any other amounts, whether or not the Employee is currently performing services
for the Company at the time of such payment.
2. Duties of Employee. Employee"s title will be Senior Vice President, Chief
Information Officer of Medaphis Corporation. Employee agrees to perform and
discharge such duties as may be assigned to Employee from time to time by the
Company to the reasonable satisfaction of the Company. Employee also agrees to
comply with all of the Company's policies, standards and regulations and to
follow the instructions and directives of Employee's superiors within the
Company, as promulgated by the officers of the Company. Employee will devote
Employee's full professional and business-related time, skills and best efforts
to such duties and will not, during the term of this Agreement, be engaged
(whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage, without the prior written consent of Xxxx Xxxxx
Xxxxxxx, or his designee, which consent will not be unreasonably withheld. This
Section will not be construed to prevent Employee from (a) investing personal
assets in businesses which do not compete with the Company in such form or
manner that will not require any services on the part of Employee in the
operation or the affairs of the companies in which such investments are made and
in which Employee's participation is solely that of an investor; (b) purchasing
securities in any corporation whose securities are listed on a national
securities exchange or regularly traded in the over-the-counter market, provided
that Employee at no time owns, directly or indirectly, in excess of one percent
(1%) of the outstanding stock of any class of any such corporation engaged in a
business competitive with that of the Company; or " participating in
conferences, preparing and publishing papers or books or teaching, so long as
Xxxx Xxxxx Xxxxxxx, or his designee, approves such participation, preparation
and publication or teaching prior to Employee's engaging therein, which approval
will not be unreasonably withheld.
3. Term. The term of this Agreement will be for a two (2) year period of time,
commencing as of February 1, 1998 and expiring on January 31, 2000, subject to
earlier termination as provided for in Section 4 of this Agreement. Following
the initial two (2) year term of this Agreement, the terms of this Agreement
will continue to remain in effect for additional terms of one (1) year, unless
either party gives notice of the intent to terminate this Agreement at least
ninety (90) days prior to the expiration of the original term or any renewal
term of this Agreement.
4. Termination.
(a) Termination by Company for Cause. Notwithstanding anything contained in
Section 3 to the contrary, the Company may terminate this Agreement and all of
its obligations hereunder immediately if any of the following events occur:
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(i) Employee materially breaches any of the terms or conditions set forth in
this Agreement and fails to cure such breach within ten (10) days after
Employee's receipt from the Company of written notice of such breach
(notwithstanding the foregoing, no cure period shall be applicable to breaches
by Employee of Sections 6, 7 or 8 of this Agreement);
(ii) Employee engages in dishonest or illegal activities or commits or is
convicted of any crime involving fraud, deceit or moral turpitude; or
(iii) Employee dies or becomes mentally or physically incapacitated or disabled
so as to be unable to perform Employee's duties under this Agreement. Without
limiting the generality of the foregoing, Employee's inability to adequately
perform services under this Agreement for a period of sixty (60) consecutive
days will be conclusive evidence of such mental or physical incapacity or
disability, unless such inability to adequately perform services under this
Agreement is pursuant to a mental or physical incapacity or disability covered
by the Family Medical Leave Act, in which case such sixty (60)-day period shall
be extended to a one hundred and twenty (120)-day period.
(b) Termination by Company Without Cause. Notwithstanding anything contained in
Section 3 to the contrary, the Company may terminate Employee's employment
pursuant to this Agreement without cause upon at least thirty (30) days' prior
written notice to Employee. In the event Employee's employment with the Company
is terminated by the Company without cause, Employee will be entitled to receive
salary continuation and health benefit continuation (at the salary and benefit
level set forth below in Paragraph 5) for the balance of the term of this
Agreement, or nine (9) months of salary continuation, whichever amount is
greater. If Employee is terminated without cause under this Paragraph of the
Agreement, Employee will not be entitled to any other consideration or be
considered an employee of the Company for any other purposes, including the
vesting of stock options, beyond the termination date.
(c) Change in Control. In the event there is a change in control of Medaphis
Corporation, and (I) Employee"s employment is terminated as a direct result of
such change of control, or (ii) Employee suffers a material change in the terms
and conditions of his employment (defined as (a) a material reduction (greater
than 10%) in Employee"s then current base salary; (b) a change in Employee"s
existing work location to a work location more than 50 miles from Employee"s
existing work location, except for required travel on the Company"s business to
an extent consistent with Employee"s then present business travel obligations;
or " an assignment to any duties inconsistent in a material adverse respect with
Employee"s then current position, duties, or responsibilities, other than an
insubstantial and inadvertent act that is remedied by the Company promptly after
receipt of notice thereof given by Employee) within one (1) year of such change
in control, Employee will be entitled to receive a payment equal to the greater
of (1) nine (9) months of salary continuation at Employee"s then current base
salary, or (2) those payments due and owing to Employee under the remaining term
of this Agreement, whichever is greater. For purposes of this Agreement, a
"change in control" of Medaphis Corporation shall be deemed to occur upon any of
the following:
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(i) a consolidation or merger of Medaphis Corporation with or into any other
corporation, or any other entity or person, other than a wholly-owned subsidiary
of Medaphis Corporation, excluding any transaction in which stockholders of
Medaphis Corporation prior to the transaction will maintain voting control or
own at least 50% of the resulting entity after the transaction;
(ii) any corporate reorganization, including an exchange offer, in which
Medaphis Corporation shall not be the continuing or surviving entity resulting
from such reorganization, excluding any transaction in which stockholders of the
Medaphis Corporation prior to the transaction will maintain voting control or
own at least 50% of the resulting entity after the transaction; or
(iii) the sale of a substantial portion of Medaphis Corporation"s assets, which
shall be deemed to occur on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from Medaphis Corporation that (a) have a total fair market value equal
to more than 50% of the total fair market value of all the assets of Medaphis
Corporation, immediately prior to such acquisition or acquisitions, or (b)
represents a majority of the common stock of any (1) subsidiary of Medaphis
Corporation, the revenues of which, in the most recent fiscal year, represent
more than 75% of the consolidated gross revenues of Medaphis Corporation and its
subsidiaries. Notwithstanding the foregoing, a transfer of assets or common
stock in a subsidiary by Medaphis Corporation will not be treated as a sale of a
substantial portion of Medaphis Corporation"s assets if the assets are
transferred to an entity, 50% or more of the total value or voting power of
which is owned, directly or indirectly, by Medaphis Corporation.
5. Compensation and Benefits.
(a) Annual Salary. During the term of this Agreement and for all services
rendered by Employee under this Agreement, the Company will pay Employee a base
salary of One Hundred Seventy-Five Thousand Dollars ($175,000.00) per annum in
equal bi-weekly installments. Such annual salary will be subject to adjustments
by any increases given in the normal course of business.
(b) Incentive Compensation. Employee shall be eligible to participate in the
Medaphis Corporation and its Subsidiary Corporations Incentive Compensation Plan
as a participation category of fifty percent (50%) of Employee"s base salary,
payable at the discretion of the Medaphis Corporation Board of Directors.
(c) Stock Options. As soon as reasonably practicable after the signing of this
Agreement, and subject to the approval of the Compensation Committee of the
Board of Directors of Medaphis Corporation, the Company will cause Medaphis to
issue to Employee, effective as of the date approved by the Compensation
Committee of the Board of Directors of Medaphis Corporation, options to purchase
Seventy-Five Thousand (75,000) shares of Medaphis Common Stock pursuant to the
terms and conditions of the Amended and Restated Medaphis Corporation
Non-Qualified Stock Option Plan ("Stock Option Plan"), as amended. Such options
will vest at the rate of thirty-three and one-third percent (33.33%) per year
for a three-year period beginning on the starting date of this Agreement,
subject to the terms and conditions of the Stock Option Plan. Such options shall
vest in full immediately upon the occurrence of certain change in control
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events outlined in the Stock Option Plan. Employee shall be considered for
additional grants of options to purchase shares of Medaphis common stock in a
manner which is consistent with other senior officers of the Company. However,
nothing in this Agreement shall give rise to a contractual right to Employee to
receive grants of additional stock options of Medaphis. Further, Medaphis has no
obligation to Employee to create parity with any other Medaphis executives with
respect to any options granted to such other executives.
(d) Other Benefits. Employee will be entitled to such fringe benefits as may be
provided from time-to-time by the Company to its employees, including, but not
limited to, group health insurance, life and disability insurance and any other
fringe benefits now or hereafter provided by the Company to its employees, if
and when Employee meets the eligibility requirements for any such benefit. The
Company reserves the right to change or discontinue any employee benefit plans
or programs now being offered to its employees; provided, however, that all
benefits provided for employees of the same position and status as Employee will
be provided to Employee on an equal basis.
(e) Business Expenses. Employee will be reimbursed for all reasonable expenses
incurred in the discharge of Employee's duties under this Agreement pursuant to
the Company's standard reimbursement policies.
(f) Withholding. The Company will deduct and withhold from the payments made to
Employee under this Agreement, state and federal income taxes, FICA and other
amounts normally withheld from compensation due employees.
(g) Signing Bonus. Upon execution of this Agreement, the Company will pay
Employee a signing bonus in the amount of Fifty Thousand Dollars ($50,000.00).
In the event Employee voluntarily resigns his employment with the Company for
any reason during the initial year of this Agreement, Employee agrees that he
will repay this signing bonus in full to the Company.
(h) Relocation Expenses. Provided that Employee submits adequate documentation,
Employee shall be entitled to receive relocation expenses associated with
Employee"s relocation to Atlanta, Georgia in a total aggregate amount not to
exceed Forty Thousand Dollars ($40,000.00). All relocation expenses over Forty
Thousand Dollars which are incurred by Employee must receive prior approval from
Xxxx Xxxxx Xxxxxxx or his successor. The Company agrees that it will gross up
Employee"s salary in order to cover any taxes incurred by Employee as a result
of the Company paying Employee relocation expenses under this Paragraph. In the
event Employee voluntarily resigns his employment at anytime during the initial
year of this Agreement, Employee agrees that he will repay all sums received
from the Company for relocation expenses under this Paragraph.
(i) Attorney"s Fees. Provided that Employee submits adequate documentation, the
Company will pay Employee an amount not to exceed Fifteen Hundred Dollars
($1,500.00) in order to cover the costs associated with an attorney"s review of
this document.
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6. Non-Disclosure of Proprietary Information. Employee recognizes and
acknowledges that the Trade Secrets (as defined below) and Confidential
Information (as defined below) of the Company and its affiliates and all
physical embodiments thereof (as they may exist from time-to-time, collectively,
the "Proprietary Information") are valuable, special and unique assets of the
Company's and its affiliates' businesses. Employee further acknowledges that
access to such Proprietary Information is essential to the performance of
Employee's duties under this Agreement. Therefore, in order to obtain access to
such Proprietary Information, Employee agrees that, except with respect to those
duties assigned to him by the Company, Employee shall hold in confidence all
Proprietary Information and will not reproduce, use, distribute, disclose,
publish or otherwise disseminate any Proprietary Information, in whole or in
part, and will take no action causing, or fail to take any action necessary to
prevent causing, any Proprietary Information to lose its character as
Proprietary Information, nor will Employee make use of any such information for
Employee's own purposes or for the benefit of any person, firm, corporation,
association or other entity (except the Company) under any circumstances.
For purposes of this Agreement, the term "Trade Secrets" means information,
including, but not limited to, any technical or nontechnical data, formula,
pattern, compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or potential
customers or suppliers, or other information similar to any of the foregoing,
which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can derive economic value from its disclosure or use. For purposes of this
Agreement, the term "Trade Secrets" does not include information that Employee
can show by competent proof (I) was known to Employee and reduced to writing
prior to disclosure by the Company (but only if Employee promptly notifies the
Company of Employee"s prior knowledge); (ii) was generally known to the public
at the time the Company disclosed the information to Employee; (iii) became
generally known to the public after disclosure by the Company through no act or
omission of Employee; or (iv) was disclosed to Employee by a third party having
a bona fide right both to possess the information and to disclose the
information to Employee. The term "Confidential Information" means any data or
information of the Company, other than trade secrets, which is valuable to the
Company and not generally known to competitors of the Company. The provisions of
this Section 6 will apply to Trade Secrets for so long as such information
remains a trade secret and to Confidential Information during Employee"s
employment with the Company and for a period of two (2) years following any
termination of Employee"s employment with the Company for whatever reason.
7.A. Non-Competition Covenant. During Employee's employment by the Company and
for a period of one (1) year following any termination of Employee's employment
for whatever reason, Employee will not, directly or indirectly, on Employee's
own behalf or in the service of or on behalf of any other individual or entity,
compete with the Company within the Geographical Area (as hereinafter defined).
The term "compete" means to engage in, have any equity or profit interest in,
make any loan to or for the benefit of, or render any services of any kind to,
directly or indirectly, on Employee's own behalf or in the service of or on
behalf of any other individual or entity, either as a proprietor, employee,
agent, independent contractor, consultant, director, officer, partner or
stockholder (other than a stockholder of a corporation listed on a national
securities exchange or whose stock is regularly traded in the over-the-counter
market, provided
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that Employee at no time owns, directly or indirectly, in excess of one percent
(1%) of the outstanding stock of any class of any such corporation) of any
business which provides Business products or services. For purposes of this
Agreement, the term "Geographical Area" means the territory located within a
seventy-five (75) mile radius of each facility for which Employee has management
responsibility during Employee's employment with the Company.
B. Non-Solicitation of Clients Covenant. Employee agrees that during Employee's
employment by the Company and for a period of one (1) year following the
termination of Employee's employment for whatever reason, Employee will not,
directly or indirectly, on Employee's own behalf or in the service of or on
behalf of any other individual or entity, divert, solicit or attempt to solicit
any individual or entity (I) who is a client of the Company at any time during
the six (6)-month period prior to Employee's termination of employment with the
Company ("Client"), or was actively sought by the Company as a prospective
client, and (ii) with whom Employee had material contact while employed by the
Company to provide Business services or products to such Clients or prospects.
C. Construction. The parties hereto agree that any judicial authority construing
all or any portion of this Section 7 or Section 8 below may, if it chooses,
sever any portion of the Geographical Area, client base, prospective
relationship or prospect list or any prohibited business activity from the
coverage of such Section and to apply the provisions of such Section to the
remaining portion of the Geographical Area, the client base or the prospective
relationship or prospect list, or the remaining business activities not so
severed by such judicial authority. In addition, it is the intent of the parties
that the judicial authority may, if it chooses, replace each such severed
provision with a provision as similar in terms to such severed provision as may
be possible and be legal, valid and enforceable. It is the intent of the parties
that Sections 7 and 8 be enforced to the maximum extent permitted by law. In the
event that any provision of either such Section is determined not to be
specifically enforceable, the Company shall nevertheless be entitled to bring an
action to seek to recover monetary damages as a result of the breach of such
provision by Employee.
8. Non-Solicitation of Employees Covenant. Employee further agrees and
represents that during Employee's employment by the Company and for a period of
one (1) year following any termination of Employee's employment for whatever
reason, Employee will not, directly or indirectly, on Employee's own behalf or
in the service of, or on behalf of any other individual or entity, divert,
solicit or hire away, or attempt to divert, solicit or hire away, to or for any
individual or entity which is engaged in providing Business services or
products, any person employed by the Company for whom Employee had supervisory
responsibility or with whom Employee had material contact while employed by the
Company, whether or not such employee is a full-time employee or temporary
employee of the Company, whether or not such employee is employed pursuant to
written agreement and whether or not such employee is employed for a determined
period or at-will.
9. Existing Restrictive Covenants. Employee represents and warrants that
Employee's employment with the Company does not and will not breach any
agreement which Employee has with any former employer to keep in confidence
confidential information or not to compete with
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any such former employer. Employee will not disclose to the Company or use on
its behalf any confidential information of any other party required to be kept
confidential by Employee.
10. Return of Proprietary Information. Employee acknowledges that as a result of
Employee's employment with the Company, Employee may come into the possession
and control of Proprietary Information, such as proprietary documents, drawings,
specifications, manuals, notes, computer programs, or other proprietary
material. Employee acknowledges, warrants and agrees that Employee will return
to the Company all such items and any copies or excerpts thereof, and any other
properties, files or documents obtained as a result of Employee's employment
with the Company, immediately upon the termination of Employee's employment with
the Company.
11. Proprietary Rights. During the course of Employee's employment with the
Company, Employee may make, develop or conceive of useful processes, machines,
compositions of matter, computer software, algorithms, works of authorship
expressing such algorithm, or any other discovery, idea, concept, document or
improvement which relates to or is useful to the Company's Business (the
"Inventions"), whether or not subject to copyright or patent protection, and
which may or may not be considered Proprietary Information. Employee
acknowledges that all such Inventions will be "works made for hire" under United
States copyright law and will remain the sole and exclusive property of the
Company. Employee also hereby assigns and agrees to assign to the Company, in
perpetuity, all right, title and interest Employee may have in and to such
Inventions, including without limitation, all copyrights, and the right to apply
for any form of patent, utility model, industrial design or similar proprietary
right recognized by any state, country or jurisdiction. Employee further agrees,
at the Company's request and expense, to do all things and sign all documents or
instruments necessary, in the opinion of the Company, to eliminate any ambiguity
as to the ownership of, and rights of the Company to, such Inventions, including
filing copyright and patent registrations and defending and enforcing in
litigation or otherwise all such rights.
Employee will not be obligated to assign to the Company any Invention
made by Employee while in the Company's employ which does not relate to any
business or activity in which the Company is or may reasonably be expected to
become engaged, except that Employee is so obligated if the same relates to or
is based on Proprietary Information to which Employee will have had access
during and by virtue of Employee's employment or which arises out of work
assigned to Employee by the Company. Employee will not be obligated to assign
any Invention which may be wholly conceived by Employee after Employee leaves
the employ of the Company, except that Employee is so obligated if such
Invention involves the utilization of Proprietary Information obtained while in
the employ of the Company. Employee is not obligated to assign any Invention
which relates to or would be useful in any business or activities in which the
Company is engaged if such Invention was conceived and reduced to practice by
Employee prior to Employee's employment with the Company.
12. Remedies. Employee agrees and acknowledges that the violation of any of the
covenants or agreements contained in Sections 6, 7, 8, 9, 10 and 11 of this
Agreement would cause irreparable injury to the Company, that the remedy at law
for any such violation or threatened
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violation thereof would be inadequate, and that the Company will be entitled, in
addition to any other remedy, to temporary and permanent injunctive or other
equitable relief without the necessity of proving actual damages or posting a
bond.
13. Notices. Any notice or communication under this Agreement will be in writing
and sent by registered or certified mail addressed to the respective parties as
follows:
If to the Company: If to Employee:
Medaphis Corporation
0000 Xxxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Suite 300 726 Sundringham Drive
Atlanta, GA 30339 Xxxxxxxxxx, XX 00000
Attn: General Counsel
14. Severability. Subject to the application of Section 7(c) to the
interpretation of Sections 7 and 8, in case one or more of the provisions
contained in this Agreement is for any reason held to be invalid, illegal or
unenforceable in any respect, the parties agree that it is their intent that the
same will not affect any other provision in this Agreement, and this Agreement
will be construed as if such invalid or illegal or unenforceable provision had
never been contained herein. It is the intent of the parties that this Agreement
be enforced to the maximum extent permitted by law.
15. Entire Agreement. This Agreement embodies the entire agreement of the
parties relating to the subject matter of this Agreement and supersedes all
prior agreements, oral or written, regarding the subject matter hereof. No
amendment or modification of this Agreement will be valid or binding upon the
parties unless made in writing and signed by the parties.
16. Binding Effect. This Agreement will be binding upon the parties and their
respective heirs, representatives, successors, transferees and permitted
assigns.
17. Assignment. This Agreement is one for personal services and will not be
assigned by Employee. The Company may assign this Agreement to its parent
company or to any of its subsidiaries or affiliated companies; provided that the
parent or any subsidiary or affiliate fulfills the obligations of the Company
under this Agreement.
18. Governing Law. This Agreement is entered into and will be interpreted and
enforced pursuant to the laws of the State of Georgia. The parties hereto hereby
agree that the appropriate forum and venue for any disputes between any of the
parties hereto arising out of this Agreement shall be any court located in the
geographical area comprised by the United States District Court for the Northern
District of Georgia and each of the parties hereto hereby submits to the
personal jurisdiction of any such court. The foregoing shall not limit the
rights of any party to obtain execution of judgment in any other jurisdiction.
The parties further agree, to the extent permitted
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by law, that a final and unappealable judgment against either of them in any
action or proceeding contemplated above shall be conclusive and may be enforced
in any other jurisdiction within or outside the United States by suit on the
judgment, a certified exemplified copy of which shall be conclusive evidence of
the fact and amount of such judgment.
19. Surviving Terms. Sections 6, 7, 8, 9, 10, 11 and 12 of this Agreement shall
survive termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY: EMPLOYEE:
MEDAPHIS CORPORATION
By: /s/ XXXXXXXX X.X. XXXXX /s/ Xxxxxxx Xxxxxx 1/30/98
_______________________ __________________________
Xxxxxxx Xxxxxx
Title: EVP
_____________________
THIS AGREEMENT IS NOT VALID AND BINDING UPON THE COMPANY UNTIL SIGNED BY XXXXX
X. XXXXXXXX OR XXXXXXXX X. X. XXXXX, ESQ.
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EXHIBIT A
INVENTIONS
Employee represents that there are no Inventions.
/s/ W.D. 1/30/98
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Employee Initials
