Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT, is made and entered into as
of the 14th day of December, 1998, by and between SUNQUEST
INFORMATION SYSTEMS, INC. ("Employer"), a Pennsylvania
corporation, with offices located at 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000, and XXXX X. XXXXXX
("Employee"), an individual residing at 00000 Xxxxx Xxxxx Xxxxx,
Xxxxxxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, Employer and its subsidiaries specialize in
the design, sale and installation of information systems; and
WHEREAS, Employer desires to employ Employee and
Employee desires to be employed by Employer subject to the terms
and provisions of this Agreement; and
WHEREAS, Employee shall have access to the various
trade secrets, confidential information, methods and manner of
operations of the business of Employer and its subsidiaries.
NOW, THEREFORE, for and in consideration of the mutual
covenants and conditions contained herein, including, but not
limited to, Employee=s assent to be bound by the Covenant Not to
Compete and the Covenant Not to Disclose Proprietary Information
contained herein, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, each intending to be legally
bound, hereby covenant and agree as follows:
1. Employment. Employer hereby agrees to employ Employee,
and Employee hereby agrees to be employed by Employer, in the
position of Chief Operating Officer (ACOO@) of Employer.
2. Management of Employer.
(a) Employee shall report directly to the President
and Chief Executive Officer ("CEO") of Employer.
(b) Employee understands that Employer will be managed
by, in addition to the CEO, Employee and Employer's Executive
Vice President-Chief Financial Officer ("CFO"), each being
equally important in authority and responsibility in and to the
CEO and Employer. Employee also understands that reporting
directly to Employee will be (i) several Executive Vice
Presidents and Senior Vice Presidents, each such officer being
equally important in authority and responsibility to Employee and
Employer, and (ii) officers of Employer's subsidiaries. Employee
shall interact and work with the CFO, Executive Vice Presidents,
Senior Vice Presidents, Vice Presidents and the remainder of
Employer's and its subsidiaries' officers and employees, in a
manner which demonstrates and encourages support of, and empathy
and respect for, the other individuals and their needs, skills
and talents.
(c) Employee understands that the Board of Directors
(the "Board") of Employer may create any other management
position that it determines in its sole discretion to be
necessary.
3. Scope of Duties. Employee's duties and obligations as
COO shall include, but not be limited to, the following:
(a) Devoting his full working time to rendering services on
behalf of Employer and to render such services with competence,
efficiency and fidelity;
(b) Complying with Employer's policies, procedures,
standards and regulations;
(c) Performing all of those duties and discharging all of
the responsibilities with which Employee has been charged in his
capacity as COO, from time to time, by the Board and the CEO; and
(d) Performing all of the duties stated in this Section 3
generally from Tucson, Arizona and from such other locations as
Employer may require.
4. Exclusive Service. During the term of this Agreement,
Employee shall devote his full time and best efforts to the
performance of his employment and duties under this Agreement.
During the term of this Agreement, Employee shall not, at any
time or place, either directly or indirectly, become engaged in
any fashion whatsoever by, for or on behalf of any entity which
is involved in the design, sale or installation of: (i)
hospital, laboratory, radiology or pharmacy information systems;
(ii) critical data management systems; (iii) any computer
systems, the design, sale or installation of which, or
significant efforts related thereto, are commenced by Employer or
its subsidiaries while Employee is employed by Employer; or (iv)
any modules or components of the above listed computer systems.
This provision is in addition to, and not in lieu of, that
contained in Section 9 hereof.
5. Compensation and Benefits. During the term of this
Agreement, as compensation for all services rendered during the
term of this Agreement as well as consideration for Employee's
agreement to be legally bound by the covenants set forth in
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Sections 8 and 9 herein, Employee shall be entitled to the
following compensation and benefits:
(a) an annual salary of TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000), payable in equal bi-weekly installments, as the same
may be increased from time to time by the Compensation Committee
of the Board (the "Base Compensation"); and
(b) participation in the benefit plans of Employer which
are in effect or which may be adopted from time to time during
the term of this Agreement, and for which Employee satisfies all
applicable eligibility requirements; and
(c) three (3) weeks paid vacation in accordance with the
general policy of Employer relating thereto; and
(d) simultaneously with the execution of this Agreement,
Employee and Employer will execute and deliver a Relocation
Expenses Agreement in the form attached hereto as Exhibit D, and
Employee shall receive a relocation allowance in accordance with
such agreement.
6. Bonus. In addition to the Base Compensation, Employee
shall be entitled to receive the following bonuses (such bonuses
are hereinafter collectively referred to as the "Bonuses") upon
the terms and conditions hereinafter set forth:
(a) Officer Bonus Plan. Employee shall participate in
Employer's Officer Bonus Plan (the "Bonus Plan"), as such may be
amended from time to time in the Employer's sole discretion. The
Bonus Plan currently provides that any bonus which may be payable
to Employee pursuant to the Bonus Plan for 1998 shall be prorated
based on the number of months Employee is employed by Employer
during 1998.
(b) Nonqualified Stock Options.
(i) Upon the effective start date of Employee=s
employment with Employer, Employee shall be awarded nonqualified
stock options (as that term is used in the Nonqualified Stock
Option Agreement attached hereto as Exhibit A) to purchase ONE
HUNDRED TWENTY FIVE THOUSAND (125,000) shares of Employer's
Common Stock, exercisable at the fair market value (as more
specifically defined in the Nonqualified Stock Option Agreement
attached hereto as Exhibit A) of Employer's Common Stock on the
effective start date of Employee's employment with Employer, and
subject to the terms and conditions of the Nonqualified Stock
Option Agreement attached hereto as Exhibit A. Employer and
Employee agree to execute the Nonqualified Stock Option Agreement
in substantially the form as attached hereto as Exhibit A, to be
provided to Employee by Employer within five (5) business days of
his effective start date.
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(ii) If Employee meets or exceeds the July 1, 1999
written performance goals (to be established by Employer prior to
execution of this Agreement), then Employee shall be awarded
nonqualified stock options to purchase an additional FIFTY
THOUSAND (50,000) shares of Employer's Common Stock, exercisable
at the fair market value of Employer's Common Stock on July 1,
1999, and subject to the terms and conditions of a Nonqualified
Stock Option Agreement to be entered into between Employee and
Employer, such terms and conditions to be substantially similar
to those set forth in the Nonqualified Stock Option Agreement
attached hereto as Exhibit B.
(iii) If Employee meets or exceeds the written December
31, 1999 performance goals (to be established by Employer prior
to execution of this Agreement), then Employee shall be awarded
nonqualified stock options to purchase an additional ONE HUNDRED
TWENTY FIVE THOUSAND (125,000) shares of Employer's Common Stock,
exercisable at the fair market value of Employer's Common Stock
on December 31, 1999, and subject to the terms and conditions of
a Nonqualified Stock Option Agreement to be entered into between
Employee and Employer, such terms and conditions to be
substantially similar to those set forth in the Nonqualified
Stock Option Agreement attached hereto as Exhibit C.
(c) Sign-Up Bonus. In addition to all other compensation
provided for herein, Employee shall be entitled to a one-time
sign-up bonus of TWENTY FIVE THOUSAND DOLLARS ($25,000) upon
execution of this Agreement.
7. Term/Termination. (a) The term of this Agreement shall
begin on January 4, 1999 and shall continue until terminated in
accordance with any of the following:
(i) Mutual Consent. This Agreement may be terminated
at any time by mutual consent of Employee and Employer.
(ii) Unilateral Termination. This Agreement may be
unilaterally terminated by either party at any time, with or
without reason, upon ninety (90) days written notice to the other
party. In the event that this Agreement is terminated by
Employer pursuant to this Section 7(a)(ii) other than for Cause
(as defined in Section 7(a)(iii)), then Employee shall be
entitled to a severance payment in an amount equal to Employee=s
Base Compensation as set forth in Section 5(a) hereof.
(iii) Termination For Cause. This Agreement may be
terminated immediately by Employer if "Cause" exists to terminate
Employee. "Cause" shall mean gross neglect of duty, the
acceptance by Employee of a position with another employer
without consent, directly or indirectly competing with Employer
or its subsidiaries while employed under this Agreement,
intentionally engaging in any activity which is in conflict with
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or adverse to the interests of Employer or its subsidiaries,
willful misconduct on the part of Employee, misfeasance or
malfeasance of duty causing a violation of any law which is
determined to be detrimental to Employer or its subsidiaries,
breach of a fiduciary duty owed to Employer or its subsidiaries
or any shareholder of Employer or any material breach of this
Agreement which has not been corrected by Employee within ten
(10) days after his receipt of written notice of such breach from
Employer.
(iv) Death of Employee. This Agreement will
automatically terminate immediately upon the death of Employee.
(v) Disability. This Agreement will automatically
terminate after Employee has been disabled ("Disabled") for a
period in excess of sixty (60) days, unless Employer elects to
continue this Agreement with the consent of Employee. "Disabled"
shall be defined in the same manner as in the long term
disability insurance policy provided by Employer and covering
Employee.
(b) Obligations Upon Termination. In the event of
termination or expiration of Employee's employment prior to the
end of the Term under any of the circumstances described in this
Section 7, the parties shall carry out any provisions hereof
which contemplate performance by them subsequent to such
termination or expiration of employment, and such termination or
expiration of employment shall not affect any covenant, warranty,
liability or other obligation which shall have arisen or accrued
prior to such termination or expiration of employment.
8. Covenant Not to Disclose Proprietary Information.
(a) Employee recognizes that Employer and its subsidiaries
have developed at great expense and are the owners of a body of
technical and business information that provides Employer and its
subsidiaries with an advantage over its competitors and that
Employer and its subsidiaries possess and will continue to
possess information that has been created, discovered, developed
or otherwise has become known to the Employer and its
subsidiaries, including, without limitation, laboratory,
radiology and pharmacy information computer software systems,
network laboratory outreach (including management support and
medical expertise), and other computer software, designs,
processes, materials, inventions, improvements, writings,
memoranda, reports, price information, marketing information,
customer information, drawings, plans, sketches, art work,
documents, equipment and the like relating to the business of
Employer and its subsidiaries (collectively referred to
throughout this Agreement as "Proprietary Information").
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(b) Employee understands and agrees that his employment
creates a relationship of confidence and trust between Employee
and Employer with respect to any Proprietary Information.
(c) In consideration of Employee's employment by Employer,
the Base Compensation and benefits received hereunder, and the
potential Bonuses set forth hereunder, Employee hereby agrees as
follows:
(i) Employee agrees that all Proprietary Information
is the confidential and exclusive property of Employer and its
subsidiaries. Further, Employee will not convert Proprietary
Information for his own or a third party's use without the prior
written consent of Employer and will not make any use of
Proprietary Information except in the discharge of Employee's
duties as an employee of Employer. Employee will not at any
time, whether during or after the termination of his employment,
disclose to any person or entity any Proprietary Information.
Further, Employee will not permit any person or entity to examine
and/or make copies of any documents which contain or are derived
from any Proprietary Information, whether prepared by Employee or
otherwise coming into Employee's possession or control, without
the prior written consent of Employer, other than employees of
Employer in furtherance of Employer's and its subsidiaries=
businesses;
(ii) All documents, records, apparatus, equipment and
other physical property, whether or not pertaining to the
Proprietary Information, furnished to Employee by Employer or its
subsidiaries or another employee of Employer or its subsidiaries
or produced by Employee, either individually or jointly, in
connection with his employment shall be and remain the sole
property of Employer and shall be returned to Employer
immediately as and when requested by Employer and immediately
upon termination or expiration of this Agreement for any reason.
Employee will not take with him any such property or any
reproduction of such property upon such termination or expiration
of this Agreement; and
(iii) Employee will promptly disclose to Employer or
any persons designated by it, all improvements, formulas, ideas,
processes, techniques, know-how, data, computer software,
documentation, proposals, writings, whether or not patentable or
registrable under copyright or similar statutes or subject to
analogous protection, made or conceived or reduced to practice or
learned by Employee, either alone or jointly with others, during
the term of employment (all such improvements, formulas, ideas,
processes, techniques, know-how, data, computer software,
documentation, proposals and writings are hereinafter
collectively referred to as "Developments" and individually as a
"Development").
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Employee agrees that all Developments which Employee
develops (in whole or in part), either alone or jointly with
others, and (i) uses equipment, supplies, facilities or
Proprietary Information of Employer, or (ii) uses the hours for
which Employee is to be compensated by Employer, or (iii) which
relate to the business of Employer or its subsidiaries or to its
actual or demonstrably anticipated research or development, or
(iv) which result, in whole or in part, from work performed by
Employee for Employer or its subsidiaries, shall immediately
become the sole and absolute property of Employer and its
assigns, and Employee hereby assigns any rights Employee may have
or acquire in the Developments and benefits and/or rights
resulting therefrom to Employer and its assigns without further
compensation and Employee agrees to communicate, without cost or
delay, and without publishing the same, all available information
relating thereto (with necessary plans and models) to Employer.
Upon disclosure of each Development to Employer, Employee will,
during the term of this Agreement and at any time thereafter, at
the request and cost of Employer, sign, execute, make and do all
such deeds, documents, acts and things as Employer and its duly
authorized agents may require: (i) to apply for, obtain and vest
in the name of Employer alone (unless Employer otherwise directs)
letters patent, copyrights or other analogous protection in any
country throughout the world and when so obtained or vested to
renew and restore the same; and (ii) to defend any opposition
proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of
letters patent, copyright or analogous protection.
In the event that Employer is unable, for any reason
whatsoever, to secure Employee's signature on any letters patent,
copyright or analogous protection relating to any Development
(including applications, renewals, extensions, continuations and
divisions), Employee hereby irrevocably designates and appoints
Employer and its duly authorized officers and agents as
Employee's agent and attorney-in-fact, to act for and in behalf
of and stead to execute and file any such application (or
otherwise) and to do all other lawfully permitted acts to further
the prosecution and issuance of letters patent, copyright or
other analogous protection thereon with the same legal force and
effect as if executed by Employee.
9. Covenant Not to Compete. Employee understands and
agrees that much of Employer's and its subsidiaries= success, on
a national and international level, has been due to their ability
to create, commercially exploit and maintain the secrecy of
significant trade secrets, proprietary and confidential
information, all of which are recognized as and agreed to be
valuable assets of Employer and its subsidiaries. It is further
recognized that Employer's and its subsidiaries' continued
success and competitive advantage in the marketplace is dependent
upon their ability to prohibit access to any and all of these
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valuable assets, both as they currently exist and as they are
subsequently expanded, added to, varied and/or modified, by any
person not in the employ of Employer or its subsidiaries.
Accordingly, in consideration of Employee's employment by
Employer, the Base Compensation and benefits received hereunder,
and the potential Bonuses set forth hereunder, Employee hereby
agrees to the following:
(a) During the term of Employee's employment hereunder and
for a period of twelve (12) months after the termination of
employment for any reason, Employee shall not become, directly or
indirectly, involved, whether alone or as a partner, joint
venturer, franchisee, franchisor, officer, director, employee,
independent contractor, employer, agent, shareholder or other
owner in any of the competitors of the Employer or its
subsidiaries named on Exhibit E attached hereto and made a part
hereof;
(b) During the term of employment hereunder and for a
period of twelve (12) months after the termination of Employee's
employment for any reason, Employee shall not, directly or
indirectly, solicit or induce or attempt to solicit or induce,
any employee of Employer or its subsidiaries to leave Employer or
its subsidiaries for any reason whatsoever or hire any employee
of Employer or its subsidiaries;
(c) During the term of employment hereunder and for a
period of twelve (12) months after the termination of Employee's
employment for any reason, Employee shall not, directly or
indirectly, solicit the trade of or trade with, or otherwise do
business with any client of Employer or its subsidiaries so as to
offer or sell any product or services which would be competitive
with any products or services sold by Employer or its
subsidiaries during the term of this Agreement or any products or
services which Employee knows are being developed by Employer or
its subsidiaries during the term of this Agreement; and
(d) During the term of employment hereunder, Employee shall
not take any action which might divert from Employer or its
subsidiaries any opportunity which would be within the scope of
any present or contemplated future business of Employer or its
subsidiaries.
10. Prior Employment. Employee represents that his
performance of all of the terms of this Agreement and as an
employee of Employer does not and will not breach any agreement
to keep in confidence proprietary information acquired by
Employee in confidence or trust which was obtained prior to
employment by Employer. Employee has not entered into, and
agrees that he will not enter into, any agreement either written
or oral in conflict herewith.
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11. Restrictive Covenants.
(a) Employee agrees that the restrictions upon Employee's
activities contained in this Agreement are fair, reasonable and
will not be onerous or unduly burdensome to Employee. Employee
further agrees that the Base Compensation and benefits, and the
potential bonuses adequately compensate Employee for his
agreement to enter into the restrictive covenants contained in
this Agreement and acknowledges that his experience and
capabilities are such that the provisions of this Agreement will
not prevent him from earning a livelihood, particularly with
respect to potential employers which are not listed on Exhibit E.
(b) It is understood and agreed that an actual or
threatened breach by Employee of any of the provisions of
Sections 8 or 9 hereof may immediately result in a significant
and substantial impairment of Employer's and its subsidiaries=
competitive advantage and position in the marketplace and the
continued viability or success of Employer and its subsidiaries
and will cause irreparable damage to Employer and its
subsidiaries. It is further agreed that Employer and its
subsidiaries may have no adequate remedy at law. Accordingly, in
the event of a reasonably perceived actual or threatened breach
of any provisions of Sections 8 or 9, Employer and its
subsidiaries shall be entitled to obtain an injunction
restraining Employee from violating any of said provisions,
specific performance or other equitable relief to prevent the
violation of Employee's obligations hereunder. These remedies
shall be in addition to, and not in lieu of, any other remedy
available at law to Employer and its subsidiaries.
12. Miscellaneous.
(a) Severability. If any clause or provision herein shall
be held to be invalid, void or unenforceable, the remaining
provisions shall in no way be affected or impaired and such
provisions shall remain in full force and effect.
(b) Governing Law. This Agreement shall be governed in all
respects, whether as to validity, construction, capacity,
performance or otherwise, by the laws of the Commonwealth of
Pennsylvania.
(c) Notices. All notices required or permitted to be given
under this Agreement shall be given by certified United States
mail, return receipt requested, to the parties at the following
addresses or to such other addresses as either party may
designate in writing to the other party:
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If to Employer:
Xxxxxx X. Xxxxxxxxx, President
& Chief Executive Officer
Sunquest Information Systems, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
If to Employee:
Xxxx X. Xxxxxx
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
(d) Non-Waiver. The failure of either Employee or Employer
at any time to require the performance of the other of any of the
provisions herein shall in no way affect the respective rights of
Employee or Employer to enforce the same nor shall the waiver by
Employee or Employer of any breach of any provisions hereof be
construed to be a waiver of any succeeding breach or as a waiver
or modification of the provisions of the Agreement itself.
(e) Binding Effect. The provisions of this Agreement shall
be binding upon and inure to the benefit of both parties hereto
and their respective successors and assigns.
(f) Section Headings. The section headings used in this
Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this
Agreement.
(g) Assignment. This Agreement is personal to Employee,
and he may neither assign nor delegate any of his rights or
obligations hereunder without first obtaining the written consent
of Employer.
(h) Complete Agreement. This Agreement supersedes all
prior agreements and understandings between the parties and may
not be modified or terminated orally. No modification,
termination or attempted waiver shall be valid unless it is in
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writing and signed by the party against whom the same is sought
to be enforced.
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have set their respective hands and seals
as of the date first written above.
ATTEST: EMPLOYER:
SUNQUEST INFORMATION SYSTEMS, INC.
_________________________ By:/s/ Xxxxxx X. Xxxxxxxxx
WITNESS: EMPLOYEE:
__________________________ /s/ Xxxx X. Xxxxxx
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