Exhibit 10.26 - Letter Agreement of Employment
InnoServ Technologies, Inc.
January 3, 1996
Xx. Xxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Dear Xxx:
INNOSERV Technologies, Inc. -Registered Trademark- ("The Company") is pleased to
extend to you an offer of employment for the position of Vice President, Chief
Financial Officer. This position will report to the President and CEO. You
will be an officer of the Company and a member of the executive management group
that directs the Company. The offer of employment, as set forth in this letter,
supersedes any representations, whether written or oral, that may have occurred
previously.
Your annual base salary will be $150,000 with the opportunity for annual merit
increases with the first annual review occurring on or about July 1, 1997.
Subject to the establishment of an executive bonus program, contemplated for
fiscal year 1997, you will be eligible for an annual bonus based on your
performance against established objectives up to a maximum of 40% of your base
salary.
You will also receive a grant of options to purchase 25,000 shares of the
Company's common stock pursuant to the Company's Stock Incentive Plan. The
stock options will have an exercise price equal to the fair market value of the
common stock as defined in the Company's Stock Option Incentive Plan on the date
you become an employee of the Company and a term of ten years, and one-third of
the stock options will vest on an annual basis so that after three years of
employment the options will be fully vested. As you are aware, there are stock
options available for grant to key employees in the discretion of the Company's
Compensation Committee as part of an overall management group incentive program.
Upon employment with the Company you will be eligible to participate in the
Company's medical and dental insurance plans which are available to other
officers and employees of the Company. You will be entitled to four weeks of
paid vacation per year.
You will receive a car allowance of $600 per month, as well as, reimbursement
for certain maintenance and operating costs, as defined in the Company Policy
and Procedures Manual.
Xx. Xxxxxx X. Xxxxxxx
January 3, 1996
Page 2
If your employment is terminated by the Company for any reason other than for
cause (which shall mean for all purposes herein, fraud, dishonesty or willful
misconduct), you will receive a severance payment by the continuation of your
then current monthly salary (less appropriate withholding amounts) for six
months following your separation. In addition, the Company will pay for your
participation in its medical and insurance plans for six months following your
separation. Payment of the severance benefit is conditioned upon your providing
to the Company at the time of your separation a written release of any and all
claims against the Company and your agreement not to compete with the Company or
to hire any of its employees for a period of two years following your separation
from the Company. You are not eligible for a severance benefit if you
voluntarily terminate your employment with the Company.
If a Change of Control (as defined below) occurs, all or your then unvested
stock options will vest immediately. Furthermore, if within six months
following a Change of Control, your employment is terminated without cause, you
will also receive a severance payment as provided for above.
For purposes of the preceding paragraph a "Change of Control" shall be deemed to
have occurred if (x) any "person" or "group" of "persons" (as the terms "person"
and "group" are used in Sections 13(d) and 14(d) of the Securities and Exchange
Act of 1934 and the rules and regulations thereunder) is or becomes, after the
date of your employment by the Company, the beneficial owner, directly or
indirectly, of the securities of the Company representing 50% of the combined
voting power of the then outstanding voting securities of the Company (whether
by purchase or acquisition of such securities or by agreement to act in concert
with respect to the voting of such securities or otherwise); (y) all or
substantially all of the assets and/or business of the Company is sold,
transferred or otherwise disposed of to a third party; or (z) a majority of the
Board of Directors of the Company shall be comprised of persons who were not
elected to such offices as part of the "Company nominated slate" of directors
(i.e., the slate of nominees proposed by the Board of Directors in office
immediately prior to the election). Notwithstanding the foregoing, there shall
be excluded from the definition of "Change of Control" any direct or indirect
beneficial ownership change resulting in 50% or more of the combined voting
power of the then outstanding securities of the Company being beneficially owned
individually, jointly or as a group by Xxxxxx X. Xxxxx, Xxxxxx Xxxxx, M.D.,
Xxxxxx X. Moehering, Xxxxxxx X. Xxxxx, MEDIQ Incorporated or the trust created
by agreement dated November 18, 1983 by Xxxxxxx X. Xxxxx as grantor (the "Xxxxx
Trust") or any of affiliates, personal representatives, heirs, testamentary
trusts or donees who are members of their family or any of them.
Your starting date of employment will be no later than January 22, 1996. Your
employment will be governed by the legal principles applicable to employment at
will and nothing contained in this letter shall constitute a contract of
employment.
Xx. Xxxxxx X. Xxxxxxx
January 3, 1996
Page 3
Xxx, I have confidence in your abilities to provide many contributions to the
Company and look forward to your commitment. On behalf of INNOSERV, let me
congratulate you on your decision to join our team.
Sincerely,
INNOSERV TECHNOLOGIES, INC. Understood, Agreed and Accepted
/s/ Xxxxxxx X. Xxxx /s/ Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxx Xxxxxx X. Xxxxxxx
President & CEO Date: 1/9/96
