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EXHIBIT 10.4
EMPLOYEE BENEFITS AND COMPENSATION
ALLOCATION AGREEMENT
This Employee Benefits and Compensation Allocation Agreement, dated as
of March 5, 2001 (the "Agreement"), by and between InfoCure Corporation
("InfoCure"), a Delaware corporation, and PracticeWorks, Inc., a Delaware
corporation ("PracticeWorks").
WHEREAS, the InfoCure Board of Directors intends to effect the
Distribution (as defined herein); and
WHEREAS, InfoCure and PracticeWorks wish to provide for the allocation
of assets and liabilities and certain other matters with respect to employee
benefit plans, and certain other employee plans and arrangements in connection
with the Distribution.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Code" means the Internal Revenue Code of 1986, as amended.
1.2 "Distribution" means the distribution to the holders of the
issued and outstanding shares of InfoCure Common Stock, as of the Distribution
Record Date, as defined in the Distribution Agreement, of all of the issued and
outstanding shares of PracticeWorks Common Stock, on the basis of 1/4 of a share
of PracticeWorks Common Stock for each share of InfoCure Common Stock.
1.3 "Distribution Agreement" shall mean the Agreement and Plan of
Distribution by and between InfoCure and PracticeWorks, dated as of February 21,
2001.
1.4 "Distribution Date" has the meaning given to such term in the
Distribution Agreement.
1.5 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.6 "InfoCure Common Stock" means the common stock, par value
$.001 per share, of InfoCure.
1.7 "InfoCure Educational Assistance Plan" means the InfoCure
Corporation Educational Assistance Plan.
1.8 "InfoCure 401(k) Plan" means the InfoCure 401(k) Profit
Sharing Plan.
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1.9 "InfoCure Employee" means each employee of InfoCure.
1.10 "InfoCure Flexible Benefits Plan" means the InfoCure
Corporation Flexible Benefits Plan, which includes a dependent care expense
reimbursement account plan and a medical care expense reimbursement account.
1.11 "InfoCure LOSSO Plan" means the InfoCure Corporation
Length-of-Service Nonqualified Stock Option Plan, as amended.
1.12 "InfoCure Stock Option Plans" means the InfoCure Corporation
1996 Stock Option Plan, as amended, the InfoCure Corporation 2000 Broad-Based
Stock Plan and the InfoCure Corporation Directors Stock Option Plan.
1.13 "InfoCure Stock Options" means stock options granted under the
InfoCure Stock Option Plans or the InfoCure LOSSO Plan.
1.14 "PracticeWorks Common Stock" means the common stock, par value
$.01 per share, of PracticeWorks.
1.15 "PracticeWorks Employee" means each employee of PracticeWorks,
including a PracticeWorks Transfer Employee.
1.16 "PracticeWorks 401(k) Plan" shall mean the PracticeWorks, Inc.
401(k) Plan.
1.17 "PracticeWorks Stock Option Plan" shall mean the
PracticeWorks, Inc. 2000 Broad-Based Stock Plan, established August 10, 2000,
and amended, restated and renamed the PracticeWorks, Inc. 2000 Stock Option Plan
effective December 1, 2000.
1.18 "PracticeWorks Transfer Employee" means each employee of
InfoCure who becomes an employee of PracticeWorks on or after the Distribution
Date and on or before the thirtieth (30th) day following the Distribution Date.
1.19 "Record Date" has the meaning given to such term in the
Registration Statement.
1.20 "Registration Statement" means the Registration Statement on
Form S-1 filed by PracticeWorks with the Securities and Exchange Commission on
January 16, 2001 to effect the registration pursuant to the Securities Act of
1933, as amended, of the PracticeWorks Common Stock issued in the Distribution,
and any amendments thereto.
1.21 "Transfer Date" with respect to each PracticeWorks Transfer
Employee, means the first date on or after the Distribution Date that he or she
is actively at work for PracticeWorks following a transfer from InfoCure.
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ARTICLE II
EMPLOYMENT
2.1 TRANSFER OF EMPLOYEES. PracticeWorks shall employ each
PracticeWorks Transfer Employee, as identified on Schedule I attached hereto, on
or after the Distribution Date.
2.2 SALARY. PracticeWorks shall employ each PracticeWorks Transfer
Employee at a level of base salary or wages and, if applicable, with such
bonuses and/or commissions, and with such employee benefits, which, when
considered in the aggregate, PracticeWorks in its sole discretion believes has
reasonably comparable value to the aggregate compensation and employee benefits
provided by InfoCure to the PracticeWorks Transfer Employee immediately before
the Distribution Date.
ARTICLE III
RETIREMENT PLAN
3.1 PRACTICEWORKS 401(k) PLAN.
(a) In General. PracticeWorks will establish the
PracticeWorks 401(k) Plan for the benefit of its employees effective as
of the Distribution Date. As soon as practicable after the date hereof
and effective as of the Distribution Date, PracticeWorks shall take, or
cause to be taken, all necessary and appropriate action to allow each
PracticeWorks Transfer Employee who was not yet eligible to be an
active participant in the InfoCure 401(k) Plan to be enrolled in the
PracticeWorks 401(k) Plan as soon as practicable after his or her
Transfer Date without regard to the satisfaction of any age or service
conditions. Each PracticeWorks Transfer Employee who, as of the day
before the Distribution Date, is eligible to participate in the
InfoCure 401(k) Plan shall be eligible to participate in the
PracticeWorks 401(k) Plan on the Distribution Date.
(b) Pre-Tax Deferrals by PracticeWorks Transfer
Employees. Any PracticeWorks Transfer Employee who immediately prior to
the Distribution Date is contributing pre-tax deferrals to the InfoCure
401(k) Plan shall continue to contribute the same rate of pre-tax
deferrals to the PracticeWorks 401(k) Plan unless he or she files an
election which modifies or terminates his or her election to continue
contributing such rate of pre-tax deferrals to the PracticeWorks 401(k)
Plan.
(c) Service Credit.
(1) In General. The employment of each
PracticeWorks Transfer Employee with InfoCure shall be treated
as employment with PracticeWorks for eligibility and vesting
purposes under the PracticeWorks 401(k) Plan.
(2) Year 2001. In order to satisfy the
conditions for receipt of an allocation of matching
contributions or profit sharing contributions under the
PracticeWorks 401(k) Plan for the Plan year beginning on the
Distribution Date
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and ending on December 31, 2001, PracticeWorks shall consider
Hours of Service (as defined in the PracticeWorks 401(k) Plan)
with InfoCure from January 1, 2001 through the Distribution
Date to be Hours of Service with PracticeWorks.
3.2 INFOCURE 401(k) PLAN.
(a) In General. InfoCure previously established the
InfoCure 401(k) Plan for the benefit of its employees.
(b) PracticeWorks Transfer Employees' InfoCure 401(k)
Plan Account Balances. As soon as practicable after the Distribution
Date, InfoCure shall cause the trustee of the InfoCure 401(k) Plan to
transfer to the trustee of the PracticeWorks 401(k) Plan the assets and
liabilities of the InfoCure 401(k) Plan attributable to the
PracticeWorks Transfer Employees (including any outstanding
PracticeWorks Transfer Employees' loans from the InfoCure 401(k) Plan).
ARTICLE IV
STOCK OPTION PLANS
4.1 ESTABLISHMENT OF PRACTICEWORKS STOCK OPTION PLAN.
PracticeWorks has established the PracticeWorks Stock Option Plan for the
benefit of PracticeWorks Employees.
4.2 INFOCURE STOCK OPTIONS.
(a) Exercise. PracticeWorks Transfer Employees and
PracticeWorks directors who hold outstanding options under the InfoCure
Stock Option Plans may elect to exercise such stock options that are
fully vested within the time frame permitted by the certificate
evidencing the grant of such stock options.
(b) Conversion of InfoCure Stock Options to PracticeWorks
Stock Options. PracticeWorks Transfer Employees and PracticeWorks
directors who hold outstanding InfoCure Stock Options at the
Distribution Date (such employees and directors are referred to
hereinafter as "Stock Option Holders") may, for a period of thirty (30)
days following the Distribution Date (the "Exchange Period") surrender
for cancellation all of their outstanding fully vested InfoCure Stock
Options, if any, in exchange for options to purchase shares of
PracticeWorks Common Stock ("PracticeWorks Stock Options"). On the
business day immediately after the Distribution Date, PracticeWorks and
InfoCure shall jointly send written notice to the Stock Option Holders
explaining the Exchange Period, exchange rights and other matters
described in this Section 4.2. Stock Option Holders who do not
surrender their outstanding fully-vested InfoCure Stock Options in
exchange for PracticeWorks Stock Options during the Exchange Period
shall continue to hold InfoCure Stock Options which will expire in
accordance with their terms. Stock Option Holders whose InfoCure Stock
Options are not fully vested shall automatically and immediately have
such InfoCure Stock Options exchanged for PracticeWorks Stock Options.
All such PracticeWorks Stock Options shall be issued under the
PracticeWorks Stock Option Plan. The number of shares subject to each
PracticeWorks Stock Option
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will be determined by multiplying the number of shares of InfoCure
Common Stock subject to each related InfoCure Stock Option by the
PracticeWorks Conversion Factor (as defined below) and the price for
the shares of PracticeWorks Common Stock subject to each PracticeWorks
Stock Option will be determined by dividing the price of each related
InfoCure Stock Option by the PracticeWorks Conversion Factor. The
"PracticeWorks Conversion Factor" is a number equal to (a) the closing
price of a share of InfoCure Common Stock on the Nasdaq National Market
on the Distribution Date, divided by (b) the opening price of a share
of PracticeWorks Common Stock on the American Stock Exchange on the
next trading day following the Distribution Date. Examples illustrating
the exchange of InfoCure Stock Options for PracticeWorks Stock Options
are set forth on Schedule II attached hereto.
(c) Terms and Conditions. Stock Option Holders who elect
to convert InfoCure Stock Options to PracticeWorks Stock Options shall
remain subject to the same terms and conditions, including any vesting
schedule, applicable to such InfoCure Stock Options prior to the
conversion.
(d) Adjustment to InfoCure Stock Options. After the
Distribution Date, the number of shares subject to each outstanding
InfoCure Stock Option on the Distribution Date will be adjusted to
equal an amount determined by multiplying the number of shares of
InfoCure Common Stock subject to each related InfoCure Option by the
InfoCure Conversion Factor (as defined below) and the price for the
shares of InfoCure Common Stock subject to each InfoCure Stock Option
will be adjusted by dividing the price of each related InfoCure Stock
Option by the InfoCure Conversion Factor. Notwithstanding the
foregoing, in no event shall there be an adjustment to InfoCure Stock
Options pursuant to this Section 4.2(d) that are subsequently exchanged
for PracticeWorks Stock Options pursuant to Section 4.2(b). The
"InfoCure Conversion Factor" is a number equal to (a) the closing price
of a share of InfoCure Common Stock on the Nasdaq National Market on
the Distribution Date, divided by (b) the opening price of a share of
InfoCure Common Stock on the Nasdaq National Market on the next trading
day following the Distribution Date. Examples illustrating the
adjustment to InfoCure Stock Options are set forth on Schedule III
attached hereto.
ARTICLE V
OTHER BENEFITS
5.1 CESSATION OR CONTINUATION OF COVERAGE. Effective as of his or
her Transfer Date, each PracticeWorks Transfer Employee, together with
dependents thereof, shall cease to be covered by InfoCure's employee welfare
benefit plans, including but not limited to plans, programs, policies and
arrangements which provide medical and dental coverage, life and accident
insurance, short-term disability coverage, and long-term disability coverage
(collectively, "Welfare Plans") and shall be covered under PracticeWorks'
Welfare Plans.
5.2 RESPONSIBILITY FOR CLAIMS INCURRED. For purposes of this
Section, a claim shall be deemed to have been incurred on the date on which
medical or other treatment or
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service was rendered and not the date of the inception of the related illness or
injury or the date of submission of a claim related thereto.
(a) InfoCure. InfoCure shall retain responsibility for
all InfoCure Welfare Plans claims incurred by each PracticeWorks
Transfer Employee and his or her dependents prior to his or her
Transfer Date.
(b) PracticeWorks. PracticeWorks shall be responsible for
all PracticeWorks Welfare Plans claims incurred by each PracticeWorks
Transfer Employee on or after his or her Transfer Date.
5.3 HEALTH PLAN PROVISIONS. Any pre-existing condition requirement
in any of PracticeWorks' Welfare Plans that are medical, dental or health plans
shall be waived with respect to PracticeWorks Transfer Employees only to the
extent permitted by any applicable law.
5.4 FLEXIBLE BENEFITS PLAN. Effective as of the Distribution Date,
PracticeWorks shall adopt a flexible benefits plan that has the same features as
the InfoCure Flexible Benefits Plan and through which PracticeWorks Transfer
Employees who elected to participate in the InfoCure Flexible Benefits Plan in
December 2000 will continue to contribute on a pre-tax basis to a medical care
expense reimbursement account and to a dependent care expense reimbursement
account. PracticeWorks and InfoCure shall share such information as may be
necessary so that contribution elections, account balances, and reimbursement
experience from the InfoCure Flexible Benefits Plan can be matched against the
same from the flexible benefits plan maintained by PracticeWorks. As of the end
of the calendar year which includes the Distribution Date, PracticeWorks shall
transfer to InfoCure the amount, if any, by which reimbursements made to such
PracticeWorks Transfer Employees for claims incurred prior to the Distribution
Date exceed the amount such PracticeWorks Transfer Employees contributed to
their medical care expense reimbursement accounts under the InfoCure Flexible
Benefits Plan. As of the end of the calendar year which includes the
Distribution Date, InfoCure shall transfer to PracticeWorks the amount, if any,
by which reimbursements made to PracticeWorks Transfer Employees for claims
incurred prior to the Distribution Date are less than the amount contributed by
such PracticeWorks Transfer Employees to their medical care expense
reimbursement accounts under the InfoCure Flexible Benefits Plan. Nothing in
this Agreement shall limit PracticeWorks' ability to amend, modify or terminate
its own flexible benefits plan.
5.5 VACATION. Any earned, but not taken, vacation time with
InfoCure of each PracticeWorks Transfer Employee shall become the responsibility
of PracticeWorks effective as of his or her Transfer Date, and InfoCure shall
cease to have any liability in respect thereof.
5.6 PRACTICEWORKS EDUCATIONAL ASSISTANCE PLAN. PracticeWorks shall
establish for PracticeWorks Employees, effective on the Distribution Date, an
educational assistance plan that has the same features as the InfoCure
Educational Assistance Plan.
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ARTICLE VI
MISCELLANEOUS
6.1 ENTIRE AGREEMENT. This Agreement and the Agreement and Plan of
Distribution between PracticeWorks and InfoCure dated as of February 21, 2001
(the "Distribution Agreement") shall constitute the entire agreement between the
parties with respect to the subject matter hereof and shall supersede all
previous negotiations, discussions, agreements and understandings with respect
to such subject matter.
6.2 INDEMNITY. The indemnification provisions of Article III of
the Distribution Agreement shall be applicable to this Agreement and are hereby
incorporated herein by reference. Except as specifically provided in this
Agreement and the Distribution Agreement,
(a) PracticeWorks shall be responsible for any and all
Liabilities or Losses (as such terms are defined in the Distribution
Agreement) relating to the employment of PracticeWorks Employees or
former PracticeWorks Employees by PracticeWorks without regard to
whether such Liabilities or Losses are incurred before, on or after the
Distribution Date and shall indemnify and hold InfoCure harmless for
such Liabilities and Losses; and
(b) InfoCure shall be responsible for any and all
Liabilities or Losses relating to the employment of InfoCure Employees
or former InfoCure Employees, excluding, however, any PracticeWorks
Employees, by InfoCure without regard to whether such Liabilities or
Losses are incurred before, on or after the Distribution Date and shall
indemnify and hold PracticeWorks harmless for such Liabilities and
Losses.
6.3 CLAIMS AND DISPUTE RESOLUTION. The claims and dispute
resolution provisions of Article VII of the Distribution Agreement shall be
applicable to this Agreement and are hereby incorporated herein by reference.
6.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware.
6.5 NOTICES. All notices and other communications hereunder shall
be in writing, shall reference this Agreement and shall be hand delivered or
mailed by registered or certified mail (return receipt requested) or sent by
facsimile or by any other means of electronic message transmission with delivery
confirmed (in writing or by electronic transmission) to the parties at the
following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which
confirmation of delivery of such notice is received:
To InfoCure: InfoCure Corporation
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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To PracticeWorks: PracticeWorks, Inc.
0000 Xxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6.6 AMENDMENTS. This Agreement may not be modified or amended
except by an agreement in writing signed by the parties.
6.7 SUCCESSORS AND ASSIGNS. Except as set forth in Section 6.12
hereto, neither party may assign its rights or delegate any of its duties or
obligations under this Agreement without the prior written consent of the other
party. This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
6.8 NO THIRD PARTY BENEFICIARIES. Except as set forth in Section
6.12 hereto, this Agreement is solely for the benefit of the parties hereto and
their respective subsidiaries and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
6.9 TITLES AND HEADINGS. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
6.10 ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render such
provision unenforceable in any other jurisdiction.
6.11 ACCESS TO INFORMATION. PracticeWorks and InfoCure shall
provide each other with access to information reasonably necessary in order to
carry out the provisions of this Agreement (including InfoCure files relating to
retired PracticeWorks employees and premium reconciliation for billing and
collections through the Distribution Date).
6.12 COLLATERAL ASSIGNMENT TO FINOVA. Notwithstanding Sections 6.7
and 6.8 above, (i) in connection with the closing of the transactions
contemplated by the Loan Agreement dated as of March 5, 2001 (as amended,
modified, supplemented or restated from time to time, the "PW Loan Agreement")
by and between PracticeWorks and FINOVA Capital Corporation (together with its
successors and assigns, "FINOVA"), PracticeWorks agrees that it shall assign
this Agreement and its rights, interests and benefits hereunder to FINOVA
pursuant to, among other things, the Collateral Assignment of Distribution
Transaction Documents dated the date of the PW Loan Agreement executed by
PracticeWorks in favor of FINOVA,
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whereupon FINOVA shall be permitted to exercise any remedy, claim of action or
other right afforded to PracticeWorks hereunder and (ii) in connection with the
closing of the transactions contemplated by the Second Amendment to Loan
Agreement and Other Loan Documents dated as of March 5, 2001 (as amended,
modified, supplemented or restated from time to time, the "InfoCure Loan
Agreement") by and between InfoCure and FINOVA, InfoCure agrees that it shall
assign this Agreement and its rights, interests and benefits hereunder to FINOVA
pursuant to, among other things, the Collateral Assignment of Distribution
Transaction Documents dated the date of the InfoCure Loan Agreement executed by
InfoCure in favor of FINOVA, whereupon FINOVA shall be permitted to exercise any
remedy, claim of action or other right afforded to InfoCure hereunder.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
hereinabove written.
ATTEST: INFOCURE CORPORATION
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxxx X. Fine
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Xxxxxxxxx X. Fine
Chief Executive Officer
ATTEST: PRACTICEWORKS, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
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