EXHIBIT 10.7
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
11th day of November, 1996, by and between PROXYMED, INC. ("Company") and
Xxxxxxx Xxxxx residing at 0000 X.X. 000 Xxxxxxx, Xxxxx Xxxxxxx, XX 00000
("Employee").
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company desires to employ the Employee and the Employee is
willing to accept employment by the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth hereinafter and other good and valuable considerations, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Employee
agree as follows:
1. TERM. The term of this Agreement shall commence on November 11, l996 (the
"Effective Date") and shall continue until November 10, l999 (hereafter the
"Term), and shall be automatically extended from year to year thereafter unless
i) terminated by the Company by delivery of not less than ninety (90) days
written notice to Executive prior to the end of the initial Term or any
extension thereof, in which case the employment of Executive shall terminate on
the date specified for termination in such notice, or ii) terminated by
Executive by delivery of not less than thirty (30) days written notice to the
Company, in which case the employment of Executive shall terminate on the date
which is thirty (30) days following the date notice is received by the Company.
2. POSITION; DUTIES; LOYALTY.
a) POSITION. Employee will be employed as Executive Vice
President-Finance, Chief Financial Officer and Treasurer of the Company and
shall render exclusive service to the Company as an employee pursuant to the
terms, provisions and conditions hereinafter set forth.
b) DUTIES. Employee shall be employed by the Company on a full-time
exclusive basis. Employee shall perform the duties and have the authority and
responsibilities set out in the ByLaws of the Company and customarily
accompanying those of a chief financial officer and treasurer of a public
company.
c) LOYALTY. Employee shall devote the full time required for his
position and shall give his best efforts to the business of the Company and to
the performance of the duties and obligations described in this Agreement.
Employee shall not, directly or indirectly, alone, or as a partner, officer,
director or shareholder of any other institution, be engaged in any other
commercial activities whatsoever, or continue or assume any other corporate
affiliations without the prior written consent of the Company, which consent
shall not be unreasonably withheld, except for (a) passive investments, and (b)
minimal time utilized for business activities that do not compete with the
business of the Company or its subsidiaries.
3. COMPENSATION AND EXPENSES.
a) SALARY. In consideration for the services rendered by the Employee
under this Agreement, the Company shall pay the Employee a monthly base salary
of $10,416.67 (the
"Base Salary") in accordance with the Company's customary payroll practices,
plus a $500 per month car allowance, subject to federal and state taxes, if any,
through September 16, 1997, and increasing to $11,458.33 per month on September
16, 1997, and increasing to $13, 333.33 per month on September 16, 1998.
b) ADDITIONAL COMPENSATION. As a further incentive and inducement to
the Executive to accept employment by the Company and to devote his best efforts
to the business and affairs of the Company, the Employee shall be entitled to
such bonuses that may be awarded from time to time by the Compensation Committee
or the Board of Directors of the Company, and to participate in any stock option
or bonus plans which the Company may now have or in the future develop.
c) EXPENSES. Company shall promptly pay or reimburse the Employee for
all reasonable business expenses actually incurred or paid by the Employee in
the performance of his services hereunder in accordance with the policies and
procedures of the Company for the reimbursement of business expenses for its
senior level executives, provided that the Executive properly accounts therefor
in accordance with the Company's policy.
d) TAX WITHHOLDING. The Company shall have the right to deduct or
withhold from the compensation due Employee hereunder any and all sums required
for Federal income and social security taxes and all state or local taxes now
applicable or that may be enacted and become applicable in the future.
4. BENEFITS.
a) VACATION. Employee shall be entitled to three weeks of vacation with
pay in the first year of his employment, and thereafter. Vacation not taken does
not accrue unless approved in writing by the Company. Employee shall not be
entitled to receive any additional compensation from the Company on account of
his failure to take a vacation.
b) PARTICIPATION IN BENEFIT PLANS. Employee shall be entitled to
participate in whatever benefit plans, including health insurance, that are
extended to all executives of the Company, on the same terms that such benefits
are so extended. The Company shall not be obligated to maintain any special or
additional plans for Employee's benefit. Employee shall also be entitled to
participate in benefit plans extended to other senior executives of the Company.
5. TERMINATION.
a) TERMINATION WITHOUT CAUSE; DEATH; DISABILITY. In the event of
Employee's Disability (as defined herein), this Agreement may be terminated at
the election of the Company. Upon termination for death or Disability, Employee
or his/her beneficiary or estate or legal representative shall be entitled to
receive the amounts payable under Section 5 (c). For purposes of this Agreement,
"Disability" is defined to mean the inability of Employee due to illness or
physical or mental infirmity (as determined by a physician selected by Employee
and acceptable to the Company) to perform his duties hereunder on a full-time
basis for six consecutive months with reasonable accommodation by the Company.
Employee shall, upon request of the Company, furnish information and assistance
to the Company, and, in addition, upon reasonable request of the Company's Board
of Directors or its designees, shall make himself available to undertake
reasonable assignments consistent with the dignity, importance and scope of his
position and his physical and mental health.
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b) TERMINATION FOR CAUSE. The Company may terminate Employee's
employment hereunder for "cause", effective immediately upon giving written
notice thereof. For purposes of this Agreement, the term "cause" shall be
limited to (i) conviction of a felony or of any crime involving fraud or
misrepresentation; (ii) the continued failure by Employee to substantially
perform his duties to the Company after receipt of written notice from the
Company specifying any action or inaction by Employee which is deemed by the
Company to constitute a failure to perform his duties hereunder with
suggestions, where feasible, as to how Employee may remedy such failure, and
Employee has failed to correct the unsatisfactory performance within thirty (30)
days of such notice; (iii) Employee's gross negligence or willful misconduct
which is materially injurious to the Company, monetarily or otherwise; (iv)
proven dishonesty affecting the Company; (v) excessive use of alcohol or illegal
drugs interfering with the performance of Employee's duties and the continuance
thereof after written warning; (vi) any material breach by Employee of the
Company's then current policies with written notice thereof and an appropriate
period to cure such breach where the breach is not one subject to immediate
termination under the Company's policies, or of the covenants contained in
Section 6 of this Agreement regarding confidentiality. For purposes of the
paragraph, no act or failure to act on Employee's part shall be considered
"willful" unless done, or omitted to be done, by Employee not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Company. If at any time the Company shall determine that Employee has
engaged in one or more activities constituting "cause" for termination
hereunder, Employee's employment shall be terminated for cause. Company shall
pay Employee his full Base Salary through the date of termination at the then
current rate (including any applicable bonus and accrued vacation pay), and all
stock options, if any, which have become vested and exercisable on or before the
date of termination, with such options remaining exercisable for such period of
time specified as in Employee's Option Agreement(s). Company shall then have no
further obligations to Employee. Employee may give a written request to the
Company within thirty (30) days after such termination requesting an opportunity
to be heard by the Board of Directors of the Company. If Employee timely so
requests such an opportunity to be heard, such opportunity shall be made
available to Employee within 30 days after such written request. If the Board,
with the advice of counsel, determines that there was cause for termination, its
determination shall be deemed to be conclusive and final. In the event Employee
is terminated for cause, Section 6.a) and 6.b) will be of no force or effect. If
the Board determines in its reasonable judgment that there was not sufficient
basis to terminate Employee for cause, Employee shall be reinstated with all
back pay and benefits restored.
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c) PAYMENT UPON TERMINATION WITHOUT CAUSE. In the event of any
termination without cause, Employee shall be given ninety (90) days prior
written notice. Employee shall execute a full and complete release of any and
all claims against the Company in a form satisfactory to the Company, in which
event Employee (or his estate) shall be entitled to severance pay of (i) an
amount equal to Employee's Base Salary on the date of termination for 6 months
commencing on the date of termination payable in accordance with the Company's
customary payroll practices plus (ii) a pro rata portion of any bonus
compensation which would have been paid to Employee under any bonus plan which
is adopted by the Company's Compensation Committee or Board of Directors in such
year if the Company and Employee had met the targeted goals to the date of
termination, plus (iii) the continuation of all benefits including, without
limitation, all insurance plans) for 6 months after termination plus (iv) any
remaining unvested options shall vest. A termination pursuant to Section 1 above
shall not be deemed to be a termination without cause under this Section or a
termination for Good Reason under Section 5.f) or subject to this Section 5.c).
d) ACCELERATION. If the Company defaults in the payment of any amounts
owed hereunder to Employee following written notice by Employee and fails to
cure such default within ten days from the date of such notice, Employee shall
be entitled to accelerate the entire amount due hereunder. The Company shall
have the opportunity to cure a monetary default one time after which time, if
another default occurs, Employee shall be entitled to accelerate the entire
amount due hereunder upon written notice by Employee without affording the
Company an opportunity to cure.
e) RETURN OF COMPANY PROPERTY. Upon notice of termination by the
Company or resignation by Employee, Employee shall immediately return to the
Company all property of the Company in Employee's possession, including
Confidential Information (as defined below). Employee acknowledges that the
Company may withhold any compensation and benefits owed to Employee hereunder
until all such property is returned.
f) EMPLOYEE TERMINATION FOR GOOD REASON. Employee may terminate this
Agreement for Good Reason by giving Company ninety (90) days prior written
notice. Good Reason means: a) the assignment of any duties inconsistent in any
respect with Employee's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities hereunder, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose as isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of written notice from Employee;
b) any reduction of Employee's Base Salary or the failure by the Company to
provide Employee with an incentive compensation program and health and the
benefits hereunder no less favorable than the benefits Employee was entitled to
hereunder; and c) if Company's principal office is relocated in the future more
than fifty (50) miles from Ft. Lauderdale, FL. In such event, Employee's
termination shall be treated as a termination without cause and he shall be
entitled to the payments enumerated in Section 5.c) above.
g) MITIGATION. If Employee becomes entitled to compensation pursuant to
Section 5. c) or 5. f) above, Executive shall use reasonable efforts to seek
other employment; provided, however, that he shall not be required to accept a
position of less importance or dignity or of a substantially different character
than the position held as of the date of termination or a position that could
require Executive to engage in activity in violation of the non-competition
provisions of Section 6 hereof nor shall he be required to accept a position
outside South Florida. The amount of any cash compensation paid or payable from
any such
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employment shall be reported to the Company on a monthly basis and such amount
shall be credited against amounts otherwise payable by the Company to Executive
under Sections 5.c) or 5.f) above. Other than as provided in this Section 5(g),
Executive shall have no duty to mitigate the amount of any payment provided for
in this Agreement.
6. COVENANTS OF EMPLOYEE.
a) Employee agrees that during the Term and for one year following a
termination of employment for any reason, he will not, directly or indirectly,
engage, assist or participate in, whether as a director, officer, executive,
agent, manager, consultant to vendors/sellers (but may consult to end
users/purchasers), partner, owner or independent contractor or other
participant, in any line of business which is the same as the Company or any of
its subsidiaries are engaged in as of the termination of this Agreement without
the written consent of the Company, which consent shall not be unreasonably
withheld. Employee and Company agree that this clause is to protect the
interests of the Company while at the same time allowing the Employee to pursue
gainful employment with any other company Employee so chooses, so long as such
Employee does not, within the relevant time period herein, engage in any line of
business that directly competes with any line of business engaged in by the
Company or any of its subsidiaries as of the date Employee terminates his
employment with Company. Nothing contained herein shall prevent Employee from
acquiring less than 1% of any class of securities of any company that competes
with the Company that has any of its securities listed on a national securities
exchange or traded in the over-the-counter market, provided Employee remains a
passive investor.
b) Employee agrees that during the Term and for one year after the
termination of employment for any reason, he will not, directly or indirectly,
without the prior written consent of the Company, induce or solicit any person
employed or hereafter employed by the Company or any of its subsidiaries to
leave the employ of the Company or any of its subsidiaries or solicit,
recruit,hire or attempt to solicit, recruit or hire any person employed by the
Company. Further, Employee agrees that for a period of one year after the
termination of this Agreement, he will not, directly or indirectly, without the
prior written consent of the Company, solicit, divert away, take away, or
attempt to take away any customer of the Company who was a customer which
Employee had, alone or in conjunction with others, served during his employment
with the Company. Regarding the latter sentence, Company and Employee agree that
Employee may contact and do business with those customers, however during the
relevant time period, he may not solicit or sell them any product or service in
the lines of business that were the same as then being offered by the Company or
any of its subsidiaries as of the termination of employee's employment.
c) Employee agrees and acknowledges the he will disclose promptly to
the Company every discovery, improvement and invention made, conceived or
developed by Employee during the entire period of employment (whether or not
during working hours) which discoveries, improvements, or inventions are capable
of use in any way in connection with the business of Company. To the fullest
extent permitted by law, all such discoveries, inventions and improvements will
be deemed works made for hire. Employee grants and agrees to convey to Company
or its nominee the entire right, title and interest, domestic and foreign, which
he may have in such discoveries, improvements or inventions, or a lesser
interest therein, at the option of Company. Employee further agrees to promptly,
upon request, sign all applications for patents, copyrights, assignments and
other appropriate documents, and to perform all acts and to do all things
necessary and appropriate to carry out the intent of this section, whether or
not Employee is still an employee of the Company at the time of such requests.
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d) Employee agrees and acknowledges that the Confidential Information
of the Company and its subsidiaries (as hereinafter defined) is valuable,
special and unique to its business, that such business depends on such
Confidential Information, and that the Company wishes to protect such
Confidential Information by keeping it confidential for the use and benefit of
the Company. Based on the foregoing, Employee agrees to undertake the following
obligations with respect to such Confidential Information.
i) Employee agrees to keep any and all Confidential Information in
trust for the use and benefit of the Company.
ii) Employee agrees that, except as required by Employee's duties
or authorized in writing by the Company and its subsidiaries, he will not at any
time during and for a period of 10 years after the termination of his employment
with the Company and its subsidiaries, disclose, directly or indirectly, any
Confidential Information of the Company or any of its subsidiaries. except as
maybe required by applicable law or court order, in which case Employee shall
promptly notify Company so as to allow it to seek a protective order if it so
elects.
iii) Employee agrees to take all reasonable steps necessary, or
reasonably requested by the Company or its subsidiaries, to ensure that all
Confidential Information of the Company is kept confidential for the use and
benefit of the Company and its subsidiaries; and
iv) Employee agrees that, upon termination of his employment by
the Company or any of its subsidiaries or at any other time the Company may in
writing so request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof) that are in
the possession of or under the control of Employee. Employee further agrees
that, if requested by the Company to return any Confidential Information
pursuant to this Subsection (iv), he will not make or retain any copy or extract
from such materials.
For the purposes of this Section 6 (c), Confidential Information
means any and all information developed by or for the Company or any of its
subsidiaries of which Employee gained knowledge by reason of his employment by
the Company or any of its subsidiaries prior to the date hereof or during his
employment that is not generally known in any industry in which the Company or
its subsidiaries is or may become engaged, but does not apply to information
which is generally known to the public or the trade, unless such knowledge
results from an unauthorized disclosure by Employee. Confidential Information
includes, but is not limited to, any and all information developed by or for the
Company concerning plans, marketing and sales methods, materials, processes,
business forms, procedures, devices used by the Company, its subsidiaries,
suppliers and customers with which the Company had dealt with prior to
Employee's termination of employment with the Company and its subsidiaries,
plans for development of new products, services and expansion into new areas or
markets, internal operations, and any trade secrets, proprietary information of
any type owned by the Company and its subsidiaries, together with all written,
graphic and other materials relating to all or any part of the same. The Company
will receive all materials, including, software programs, source code, object
code, specifications, documents, abstracts, and summaries developed in
connection with Employee's employment. Employee acknowledges that the programs
and documentation developed in connection with Employee's employment with the
Company shall be the exclusive property of the Company, and that the Company
shall retain all right, title and interest in such materials, including without
limitation patent and copyright interests. Nothing herein shall be construed as
a license from the Company to make, use, sell or copy any inventions, ideas,
trade secrets, trademarks, copyrightable works, or other
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intellectual property of the Company during the term of this Agreement or
subsequent to its termination.
e) INJUNCTIVE RELIEF.
i) Employee acknowledges and agrees that the covenants and
obligations contained in this Section 6 relate to special, unique and
extraordinary matters and that a violation of any of the terms of this Section
will cause the Company irreparable injury for which adequate remedies at law are
not available. Therefore, Employee agrees that the Company shall be entitled
(without having to post a bond or other surety) to an injunction, restraining
order, or other equitable relief from any court of competent jurisdiction,
restraining the Employee from committing any violation of the covenants and
obligations set forth in this Section 6.
ii) The Company's rights and remedies under this Section are
cumulative and are in addition to any other rights and remedies the Company may
have pursuant to the specific provisions of this Agreement and at law or in
equity.
7. MISCELLANEOUS.
a) ATTORNEY'S FEES. In the event a proceeding is brought to enforce or
interpret any part of this Agreement or the rights or obligations of any party
to this Agreement, the non- prevailing party shall pay the prevailing party's
fees and expenses, including reasonable attorney fees, unless the court or panel
of arbitrators determine otherwise.
b) SUCCESSORS AND ASSIGNS. This Agreement and the benefits hereunder
are personal to the Company and are not assignable or transferable by the
Employee without the written consent of the Company. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the Company and
the Employee and the Employee's heirs and legal representatives, and the
Company's successors and assigns.
c) GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the law of the State of Florida, without regard to the
application of principles of conflict of laws.
d) NOTICES. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been given if delivered personally or sent by certified mail, return receipt
requested, postage prepaid, to the parties to this Agreement addressed to the
Company at its then principal office, as notified to Employee, or to the
Employee at his address specified on page 1 of this Agreement, or to either
party hereto at such other address or addresses as he or it may from time to
time specify for such purposes in a notice similarly given. All notices and
communications shall be deemed to have been received on the date of delivery.
e) MODIFICATION; WAIVER. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved by a duly authorized officer of the Company and is agreed to in a
writing signed by the Employee and such officer. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
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f) COMPLETE UNDERSTANDING. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
this Agreement.
h) VALIDITY. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
i) SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and if any one or more of the words, phrases, sentences, clauses or
sections contained in this Agreement shall be declared invalid, this Agreement
shall be construed as if such invalid word or words, phrase or phrases, sentence
or sentences, clause or clauses, or section or sections had not been inserted.
j) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
k) ARBITRATION. Except for disputes relating to Section 6 of this
Agreement, any and all disputes or controversies that shall arise under or in
connection with this Agreement or in any other way related to Employee's
employment by the Company, including termination of employment, shall be
submitted to a panel of three arbitrators under the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect. The parties hereby acknowledge that the Federal Arbitration Act takes
precedence over any state arbitration statutes, rules and regulations. Each of
the arbitrators shall be qualified and experienced in employment related matters
with at least one arbitrator being a licensed attorney. The arbitrators must
base their determination solely on the terms and conditions of this Agreement
and the law in the State of Florida. The arbitrators shall have the authority to
award any remedies that a court may order or grant, except that they will have
no authority to award punitive damages or any other damages not measured by the
prevailing party's actual damages, and may not, in any event, make any ruling,
finding or award that does not conform to the terms and conditions of this
Agreement. Arbitration shall be held either in Broward County or Dade County,
Florida, and the parties hereby agree to accept service of process at the
address above written and in the personal jurisdiction and venue as set out
herein. Both parties expressly covenant and agree to be bound by the decision of
the arbitrators as the final determination of the matter in dispute. Judgment
upon the award rendered by the arbitrators may be entered into any court having
jurisdiction thereof. The non-prevailing party shall pay the prevailing party's
fees and costs, including reasonable attorney fees, unless the court or panel of
arbitrators determine otherwise.
l) INDEMNIFICATION. In accordance with the Company's Articles
and Bylaws, the Company agrees to defend, indemnify and hold harmless the
Employee ("Indemnified Party") for acts in his capacity as Employee to the
fullest extent permitted by Florida corporate law at the present time (or as
such right of indemnity may be increased in the future) including in particular
and without limitation with respect to the execution and delivery of this
Agreement or Employee's accepting employment with the Company. The Company
agrees to reimburse the Indemnified Party in advance for any costs of defending
any action or investigation (including
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reasonable attorneys' fees and expenses) regarding Employee's performance of his
duties under this Agreement, subject to an undertaking from the Indemnified
Party to repay the Company if the Indemnified Party is determined not to be
entitled to such indemnity by a court of competent jurisdiction; provided that,
the Company shall first have the opportunity to defend Employee so long as
counsel hired by the Company does not have a conflict with representation of
both the Company and the Employee and Employee approves of such counsel.
Notwithstanding the foregoing, the Company shall not be required to advance
expenses for the defense of Employee for any causes of action that relate to
activities of Employee that the Company in good faith determines are outside of
the scope of the duties required of Employee under this Agreement and not
related to the execution and delivery of this Agreement or Employee's accepting
employment with the Company, including without limitation, for causes of action
such as sexual harassment, torts, etc.
m) Sections 5. 6 and 7 shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
COMPANY:
PROXYMED, INC., EMPLOYEE:
a Florida corporation
By: _____________________________________ ______________________
Xxxxxx Blue, Chairman and C.E.O. Xxxxxxx Xxxxx
