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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 18th day of November, 1996, by and between Xxxxxx Business Systems, Inc.,
a Georgia corporation (the "Company"), and Xxxx X. Xxxxxxxx (hereinafter
"Executive");
WHEREAS, this Agreement is entered into in contemplation with the
consummation of that certain Agreement and Plan of Merger and Reorganization,
dated as of December 13, 1995, among the Company and AUBIS, L.L.C. and its
affiliates ("AUBIS") providing for the acquisition by the Company of two
wholly-owned subsidiaries of AUBIS (the "AUBIS Transaction");
WHEREAS, the Company, recognizing the experience and knowledge of
Executive in the healthcare information software industry, and the importance of
Executive in the development and future direction of the Company, desires to
retain the valuable services and business counsel of Executive, it being in the
best interests of the Company to arrange terms of employment for Executive so as
to reasonably induce Executive to be employed by the Company for the term hereof
and to consummate the AUBIS transactions; and
WHEREAS, Executive is willing to accept such employment with the
Company, in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. For the Term of Employment, as hereinafter defined, the
Company agrees to employ Executive and Executive agrees to accept such
employment and to perform such duties and functions as the Boards of Directors
of the Company may assign to Executive from time to time, but only
administrative and managerial functions commensurate with Executive's past
experience and performance level. Unless otherwise agreed to by Executive, he
shall perform such duties primarily from the Company's offices in Atlanta,
Georgia. Executive agrees to devote his full time and energy to the business of
the Company, and shall perform his duties in a trustworthy and businesslike
manner, all for the purpose of advancing the interests of the Company. It is
hereby expressly agreed among the parties hereto that primary responsibility for
the supervision of Executive shall rest with the Board of Directors of the
Company, which shall review Executive's performance annually, make upward
adjustments to Executive's compensation and award such other bonuses and
employee benefits as it shall deem appropriate.
2. TITLE. Executive shall serve as Chairman of the Board of Directors
and Chief Executive Officer of the Company.
3. TERM OF EMPLOYMENT. The "Term of Employment" referred to in Section
1 hereof and hereinafter shall commence on the date hereof and expire on
December 31, 1999, unless otherwise terminated prior thereto in accordance with
the terms of this Agreement.
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4. COMPENSATION.
4.1 Base Salary. During the Term of Employment, Executive shall be paid
an annual base salary (hereinafter "Base Salary"), which shall be paid in
installments in accordance with the Company's normal pay practices, but not less
frequently than monthly. Executive's initial annual Base Salary for the Term of
this Agreement shall be $200,000. Executive's annualized Base Salary shall be
increased during the Term to $280,000 upon the Company achieving gross revenues
for book purposes during any calendar year equal to or greater than $10 million
(whether such revenues are internally generated or consolidated revenues
reflected as a result of an acquisition). Executive's annualized Base Salary
shall again be increased during the term to $360,000 upon the Company achieving
gross revenues for book purposes during any calendar year equal to or greater
than $15 million and the Company achieving positive Earnings Before Interest and
Taxes. Any increase in Base Salary shall commence effective the first day of the
month following the successful achievement of the respective targets. The Board
of Directors of the Company shall review Executive's Base Salary annually and
may increase, but not decrease, such Base Salary for the remainder of the Term
of Employment above and beyond as provided for in this Agreement.
4.2 Incentive Compensation. During the Term of Employment, and in
addition to Executive's Base Salary, Executive shall be eligible to receive an
annual bonus determined in accordance with the procedure set forth in Exhibit A.
Each year the Board of Directors shall establish reasonable objectives for the
operations of the Company ("Objectives"). Executive shall receive an annual
bonus based on the Company's attainment of the Objectives during the immediately
preceding fiscal year in accordance with the terms of Exhibit A.
4.3 Stock Options. In addition to any additional benefits as provided
in Section 4.4 hereof, as an incentive for successful management of the Company
by Executive, the Board of Directors may, in its discretion, grant to Executive
the right to purchase shares of the common stock of the Company at a price
determined by the Board of Directors on the date of grant. Such options shall be
issued on such terms and conditions as are determined reasonable by the Board of
Directors of the Company.
4.4 Additional Benefits. During the Term of Employment, Executive shall
have the right to participate in any and all employee benefit programs
established and maintained by the Company from time to time including, without
limitation, such medical or dental plans as may be established from time to time
by the Company. Executive shall be entitled to participate in any qualified or
unqualified stock option, pension, profit sharing or other employee benefit plan
adopted by the Company or its affiliates hereinafter and covering officers of
the Company generally. Throughout the Term of Employment, Executive shall also
be entitled to reimbursement for reasonable business expenses incurred by him in
the performance of his duties hereunder. In addition, the Company shall provide
Executive, at the Company's expense, (i) medical insurance coverage for
Executive and his family, and (ii) a monthly automobile allowance plus
reasonable expenses related thereto.
4.5 Vacation. Executive shall be entitled to six (6) weeks annual
vacation leave, with pay but with no accrual of vacation time from year to year.
Vacation shall be scheduled at reasonable times not in conflict with Executive's
duties hereunder.
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5. ILLNESS, INCAPACITY OR DEATH DURING EMPLOYMENT.
(a) If by reason of illness or incapacity, Executive is unable
to perform his services or discharge his duties hereunder for sixty (60) or more
consecutive days or ninety (90) days in the aggregate during any twelve (12)
month period, Executive and the Company agree that Executive shall have
demonstrated an inability to perform an essential function of his job
responsibilities. Accordingly, upon ten (10) days' prior notice, the Company
may, in its sole discretion, either suspend Executive without pay of any kind,
salary or bonus, until Executive is able to perform his services and discharge
his duties hereunder or terminate the employment of Executive, and thereupon,
Executive shall be paid his Base Salary from the date of termination through the
10-day notice period.
(b) In the event of Executive's death, all obligations of the
Company under this Agreement shall terminate other than the payment of that
portion of the Base Salary and incentive compensation, if any, earned by
Executive to the date of death.
6. TERMINATION.
6.1 For Cause. This Agreement may be terminated by the Board of
Directors of the Company immediately and without further obligation than for
monies already paid or accrued through the effective date of such termination,
for any of the following reasons:
(a) inattention to or substandard performance of the services
required of Executive hereunder;
(b) failure of Executive to follow reasonable written
instructions or policies of the Boards of Directors;
(c) gross negligence or willful misconduct of Executive
materially damaging to the business of the Company during the Term of
Employment, or at any time while he was employed by the Company prior to the
Term of Employment as defined herein, if not disclosed to the Company prior to
the commencement of the Term of Employment;
(d) conviction of Executive during the Term of Employment of a
crime involving breach of trust or moral turpitude; or
(e) engaging in any act or activity prohibited under the terms
of this Agreement.
In the event that the Company discharges Executive alleging "cause"
under this Section 6.1 and it is subsequently determined judicially that the
termination was "without cause," then such discharge shall be deemed a discharge
without cause subject to the provisions of Section 6.2 hereof. In the event that
the Company discharges Executive alleging "cause" under this Section 6.1, such
notice of discharge shall be accompanied by a written and specific description
of the circumstances alleging such "cause."
6.2 Without Cause. The Company may, upon thirty (30) days' written
notice to Executive, terminate this Agreement without cause at any time during
the Term of Employment. In such event, the Company shall pay Executive, as
liquidated damages in lieu of all other claims, the greater of one
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year's annual Base Salary of Executive on the date of termination or an amount
equal to the Base Salary which would otherwise be payable to Executive for the
remaining Term of Employment plus the cost for one year of all additional
benefits provided to Executive pursuant to Section 4.4 hereof. The amount of
such payment shall be subject to adjustment as provided in Section 6.4 hereof.
Any such payment shall, at the option of the Company, be made either in equal
monthly installments over the greater of twelve months or the remaining Term of
Employment or in a lump sum cash payment on the date of termination at a
discounted present value of 8% per year.
6.3 By Executive. Executive may, upon thirty (30) days' written notice
to the Company, terminate this Agreement if, at any time during the Term of
Employment, the duties, responsibilities and powers of Executive shall be
significantly reduced or diminished in such a way as to be inconsistent with the
status of Executive as an executive officer of the Company and a recognized
leader in the healthcare information software industry. In such event, the
Company shall pay Executive, as liquidated damages in lieu of all other claims,
the greater of one year's annual Base Salary of Executive on the date of
termination or an amount equal to the Base Salary which would otherwise be
payable to Executive for the remaining Term of Employment plus the cost for one
year of all additional benefits provided to Executive pursuant to Section 4.4
hereof. The amount of such payment shall be subject to adjustment as provided in
Section 6.4 hereof. Any such payment shall, at the option of the Company, be
made either in equal monthly installments over the greater of twelve months or
the remaining Term of Employment or in a lump sum cash payment on the date of
termination at a discounted present value of 8% per year.
6.4 Change in Control.
(a) In the event of a "change in control" of the Company,
Executive shall be entitled, for a period of one (1) year from the date of
closing of the transaction effecting such change in control and at his election,
to give written notice to the Company of termination of this Agreement and to
receive an amount equal to three times the annual Base Salary of Executive on
the date of termination, plus the cost for one year of all additional benefits
provided to Executive pursuant to Section 4.4 hereof. Any such payment shall, at
the option of the Company, be made either in equal monthly installments over
three years or in a lump sum cash payment on the date of termination at a
discounted present value of 8% per year.
(b) For purposes of this Section 6.4, "change in control" of
the Company shall mean:
(i) Any transaction occurring after the closing of
the AUBIS Transaction and the acquisition of HALIS
Software, Inc., whether by merger, consolidation,
asset sale, tender offer, reverse stock split or
otherwise, which results in the acquisition or
beneficial ownership (as such term is defined under
rules and regulations promulgated under the
Securities Exchange Act of 1934, as amended) by any
person or entity or any group of persons or entities
acting in concert, of 25% or more of the outstanding
shares of the common stock of the Company;
(ii) The sale of all or substantially all of the
assets of the Company; or
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(iii) The liquidation of the Company, other than in
respect to a proceeding under federal bankruptcy or
insolvency laws.
6.5 Executive's Obligations Upon Termination. Upon the termination of
his employment hereunder for whatever reason, Executive shall:
(a) Forthwith tender his resignation from any office
he may hold in the Company; and
(b) Not at any time represent himself still to be
connected or to have any connection with the Company.
6.6 Effect of Termination. The provisions contained in Sections 7 and 8
of this Agreement shall survive the termination of this Agreement and the
termination of Executive's employment with the Company to the extent required to
give full effect to the covenants and agreements contained herein.
7. CONFIDENTIALITY.
(a) Subject to Section 7(b) below, Executive agrees
that, during the term of this Agreement, Executive will hold in a fiduciary
capacity for the benefit of the Company, and after the termination of this
Agreement, Executive shall not directly or indirectly use or disclose, except as
authorized by the Company in connection with the performance of Executive's
duties, any Confidential Information, as defined hereinafter, that Executive may
have or acquire (whether or not developed or compiled by Executive and whether
or not Executive has been authorized to have access to such Confidential
Information) during the term of this Agreement. The term "Confidential
Information" as used in this Agreement shall mean and include any information,
data and know-how relating to the business of the Company or its affiliates that
is disclosed to Executive by the Company or its affiliates or known by him as a
result of his relationship with the Company and not generally within the public
domain (whether constituting a trade secret or not), including without
limitation, the following information:
(i) financial information, such as the Company's or its
affiliates' earnings, assets, debts, prices, fee structure,
volumes of purchases or sales or other financial data, whether
relating to the Company or their affiliates generally, or to
particular products, services, geographic areas or time
periods;
(ii) supply and service information, such as information
concerning the goods and services utilized or purchased by the
Company or its affiliates, the names or addresses of
suppliers, terms of supply or service contracts, or of
particular transactions, or related information about
potential suppliers, to the extent that such information is
not generally known to the public, and to the extent that the
combination of suppliers or use of a particular supplier,
though generally known or available, yields advantages to the
Company or its affiliates the details of which are not
generally known;
(iii) marketing information, such as details about ongoing or
proposed marketing programs or agreements by or on behalf of
the Company or its affiliates, marketing forecasts or results
of marketing efforts or information about impending
transactions;
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(iv) personnel information relating to the Company or its
affiliates, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed
promotions, hiring, resignations, disciplinary actions,
terminations or reasons therefor, training methods,
performance or other employee information;
(v) customer information relating to the Company or its
affiliates, such as any compilation of past, existing or
prospective customers, customer proposals or agreements
between customers and the Company or its affiliates, status of
customer accounts or credit, or related information about
actual or prospective customers; and
(vi) information with respect to any corporate affairs that
the Company or its affiliates agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenants contained in this Section 7 shall survive
the termination of Executive's employment with the Company for any reason for a
period of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Executive's obligations of confidentiality and non-disclosure as set forth in
this Section 7 shall continue to survive after said two (2) year period to the
greatest extent permitted by applicable law. These rights of the Company are in
addition to those rights the Company has under the common law or applicable
statutes for the protection of trade secrets.
8. NON-COMPETITION.
(a) Executive acknowledges that he will perform services
hereunder which directly affect the Company's business presently conducted
within the territory comprised of any area located within the continental United
States (the "Territory"). Accordingly, the parties hereto deem it necessary to
enter into the protective agreement set forth below, the terms and conditions of
which have been negotiated by and between the parties hereto.
(b) Executive agrees with the Company that for so long as he
is employed by the Company hereunder, and for a period of one (1) year after the
termination date of his employment hereunder (provided that the reason for such
termination is for cause, because of voluntary termination by him or because of
the expiration of this Agreement), Executive shall not, without the prior
written consent of the Company, within the geographical limits of the Territory,
either directly or indirectly engage in, or perform managerial or executive
services of the same type performed or to be performed by Executive pursuant to
this Agreement for, any business or organization that engages in the sale or
distribution of healthcare information software or services of the type offered
or provided by the Company if the Company or its affiliates or successors are
then engaged in the business of the sale or distribution of healthcare
information software or services in the Territory; provided, however, that
nothing contained in this Section 8(b) shall prohibit Executive following the
termination of this Agreement from performing sales functions or sales
responsibilities of a non-managerial or executive nature for a business or
organization that engages in the sale or distribution of healthcare information
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software or services of the type offered or provided by the Company, so long as
Executive does not thereby breach his obligations under Section 8(c) of this
Agreement.
(c) Executive agrees that he will not take any customer lists
of the Company after leaving his employ and that he will, for so long as he is
employed by the Company hereunder, and for a period of one (1) year after the
termination date of his employment hereunder (provided that the reason for such
termination is for cause, because of voluntary termination by him other than
pursuant to Section 6.3 hereof or because of the expiration of this Agreement),
refrain from soliciting or attempting to solicit directly or indirectly or by
assisting others, any business from any of the Company's customers, including
actively sought prospective customers, with whom Executive had material contact
during his employment for purposes of providing products or services that are
similar to or competitive with those provided by the Company, namely healthcare
information systems and support services of the type offered or provided by the
Company.
(d) Executive agrees with the Company that for so long as he
is employed by the Company hereunder, and for a period of one (1) year after the
termination date of his employment hereunder (provided that the reason for such
termination is for cause, because of voluntary termination by him because of the
expiration of this Agreement), refrain from recruiting or hiring, or attempting
to recruit or hire, directly or by assisting others, any employee of the Company
who is employed by the Company or any successor or affiliates of the Company if
the Company or its successor or affiliates is then engaged in the business of
the sale and distribution of healthcare information systems and support services
of the type offered or provided by the Company.
(e) The covenants of Executive set forth in this Section 8 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce the Company to enter
into this Agreement. The aforesaid covenants may be availed of or relied upon by
the Company in any court of competent jurisdiction, and shall form the basis of
injunctive relief and damages including expenses of litigation (including but
not limited to reasonable attorney's fees) suffered by the Company arising out
of any breach of the aforesaid covenants by Executive. The covenants of
Executive set forth in this Section 8 are cumulative to all other covenants of
Executive in favor of the Company contained in this Agreement and shall survive
the termination of this Agreement for the purposes intended. Should any
covenant, term or condition contained in this Section 8 become or be declared
invalid or unenforceable by a court of competent jurisdiction, then the parties
request that such court judicially modify such unenforceable provision
consistent with the intent of Section 8 so that it shall be enforceable as
modified, and in any event the invalidity of any provision of Section 8 shall
not affect the validity of any other provision in Section 8 or elsewhere in this
Agreement.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto regarding employment of Executive, and supersedes and
replaces any prior agreement relating thereto.
10. ASSIGNMENT. Neither of the parties hereto may assign this Agreement
without the prior written consent of the other party hereto.
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11. SEVERABILITY. Each section and subsection of this Agreement
constitutes a separate and distinct understanding, covenant and provision
hereof. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be deemed to be severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
12. GOVERNING LAW. This Agreement shall in all respects be interpreted,
construed and governed by and in accordance with the laws of the State of
Georgia.
13. RIGHTS OF THIRD PARTIES. Nothing herein, expressed or implied, is
intended to or shall be construed to confer upon or give to any person, firm or
other entity, other than the parties hereto and their permitted assigns, any
rights or remedies under or by reason of this Agreement.
14. AMENDMENT. This Agreement may not be amended orally but only by an
instrument in writing duly executed by the parties hereto.
15. NOTICES. Any notice or other document or communication permitted or
required to be given to Executive pursuant to the terms hereof shall be deemed
given if personally delivered to Executive or sent to him, postage prepaid, by
registered or certified mail, at X.X. Xxx 00000, Xxxxxxx, Xxxxxxx 00000, or any
such other address as Executive shall have notified the Company in writing. Any
notice or other document or other communication permitted or required to be
given to the Company pursuant to the terms hereof shall be deemed given if
personally delivered or sent to the Company, postage prepaid, by registered or
certified mail, at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000, or
at such other address as the Company shall have notified Executive in writing.
16. WAIVER. The waiver by either party hereto of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent breach of the same or any other provision of this
Agreement by the breaching party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XXXXXX BUSINESS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, President
EXECUTIVE
/s/ Xxxx X. Xxxxxxxx (SEAL)
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XXXX X. XXXXXXXX
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EXHIBIT A
INCENTIVE COMPENSATION
(To be mutually agreed upon by Executive and Company and approved by the
Company's Board of Directors within 30 days after the date hereof or this
Agreement shall, at the option of Executive, be void ab initio)
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AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made and
entered into as of the 3rd day of January, 1997, by and between HALIS, Inc.
(f/k/a Xxxxxx Business Systems, Inc.), a Georgia corporation (the "Company"),
and Xxxx X. Xxxxxxxx ("Executive").
WHEREAS, the Company and Executive have heretofore entered into that
certain Employment Agreement, dated as of November 18, 1996 (the "Employment
Agreement"); and
WHEREAS, the Company and Executive desire to amend the Employment
Agreement as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Amendment to Section 4.1. Section 4.1 of the Employment Agreement is
hereby amended by deleting the words "$15 million" in the fourth sentence
thereof and inserting in their place the following: $25 million.
2. Employment Agreement to Remain in Effect. Except as expressly
amended hereby, the Employment Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused the Amendment to be
duly executed and delivered as of the day and year first above written.
HALIS, Inc.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, President
EXECUTIVE:
/s/ Xxxx X. Xxxxxxxx (SEAL)
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Xxxx X. Xxxxxxxx
