EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of July 1, 2001 by
and between I-many, Inc., a Delaware corporation having its principal place of
business at 000 Xxxxxxxx Xx., 0xx Xxxxx, Xxxxxxxx, XX 00000 (the "Company"), and
Xxxxx X. Xxxxxxx, a resident of 000 Xxxxxx Xxxx Xx., Xxxxxxx, XX 00000
("Executive").
WHEREAS, the Company desires to employ Executive, and Executive desires
to be employed by the Company, and the Board of Directors of the Company (the
"Board of Directors") has determined that it is in the best interests of the
Company and its shareholders to formalize the employment relationship pursuant
to this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties, the Company and Executive
agree as follows:
1. EMPLOYMENT.
1.1 Position. The Company agrees to employ Executive in the
position(s) stated in Exhibit A to this Agreement. Executive accepts employment
with the Company in such capacity and agrees to serve the Company faithfully,
diligently and to the best of his or her ability pursuant to the
responsibilities and goals assigned to Executive by the President and Chief
Executive Officer of Company and which are consistent with the Executive's title
and position. During the course of Executive's employment with the Company,
Executive agrees to devote his or her full business time, energy, attention, and
skill to such employment and agrees not to, directly or indirectly, engage or
participate in, or become employed by, or become a director, officer, or partner
of, or provide services for compensation to or in connection with, any business
activity that would be considered competitive with the business of the Company
or which conflicts or interferes with the performance of Executive's obligations
under this Agreement without the express written consent of the Board of
Directors.
1.2 Employment Term. Executive's employment with the Company
shall be at will, as described more fully in Exhibit A, and, subject to the
terms and conditions herein, this Agreement shall be terminable accordingly.
2. COMPENSATION.
2.1 Salary. The Company shall compensate Executive as set forth
on Exhibit A hereto subject to all standard tax deductions and withholdings. The
Base Salary (as defined therein) shall be paid to Executive in accordance with
the Company's normal payroll practices. Executive's Base Salary may be increased
annually at the discretion of the Board of Directors or the Chief Executive
Officer.
2.2 Bonus Plan. During the term of his or her employment,
Executive shall be eligible for up to 40% of his annual base salary in annual
bonuses as part of a discretionary, performance-based bonus program, the terms
of which shall be as determined annually by the Board of Directors or a
Compensation Committee thereof or the Chief Executive Officer. The performance
related bonus shall be subject to all standard tax deductions and other
withholdings.
2.3 Acceleration of Stock Options. If the Company is
consolidated with or merged into another entity (other than a consolidation or
merger in which the stockholders of the Company immediately prior to the
consolidation or merger own a majority of the issued and outstanding shares of
stock of the survivor corporation, or of an entity owning the survivor
corporation, immediately after the consolidation or merger); or if the business
of the Company is acquired by another entity in an acquisition of all or
substantially all of the Company's assets; or an entity
acquiring in a transaction or series of related transactions in a three month
period from the then-existing stockholders, more than 50 % of the Company's
issued and outstanding shares of capital stock (each a "Company Sale"); then
fifty percent (50%) of the Executive's unvested options on the date of the
Company Sale shall become exercisable in full immediately prior to the closing
of such Company Sale, provided that if the Board of Directors should determine,
upon receipt of a written opinion of the Company's independent public
accountants, that giving effect to this provision for acceleration would
preclude accounting for any proposed business combination of the Company with
another entity as a pooling of interests, and the Board otherwise desires to
approve such a proposed business combination which requires as a condition to
the closing of such transaction that it be accounted for as a pooling of
interests, then this provision shall be null and void.
3. OTHER BENEFITS.
3.1 Benefit Plans. During the term of his or her employment,
Executive shall be entitled to participate in the Company's benefit plans and
programs, if any, made available generally to other employees or executives
similarly situated with the Company, including, but not limited to, medical and
health care plans, life insurance, disability and a 401(k) plan.
3.2 Vacation. Executive shall be entitled to three (3) weeks
of annual vacation, to be accrued and taken in accordance with the vacation
policy of the Company for similarly situated employees or executives, but which
in any case may not be carried over from year to year to the extent not taken.
In addition, Executive will be entitled to personal days in accordance with
Company policy.
3.3 Expenses. The Company shall reimburse Executive for all
reasonable business expenses incurred by Executive in connection with, or
related to, the performance of Executive's duties, responsibilities or services
under this Agreement, upon Executive's presentation to the Company of expense
statements, vouchers or other supporting information, in accordance with Company
practices. The Company shall also provide Executive with a car allowance of $500
per month.
4. TERMINATION OF EMPLOYMENT.
4.1 Means of Termination. Subject to the terms and conditions
hereof, Executive's employment shall terminate:
(a) At the discretion of either party at any time for any
reason;
(b) At the election of the Company for Cause, as such
term is defined herein; or
(c) Upon the death or permanent disability of Executive.
As used in this Agreement, the term "permanent disability" shall mean the
inability of the Executive, due to a physical or mental disability, for a period
of 90 days, whether or not consecutive, during any 360-day period to perform the
essential functions of the job, including the services contemplated under this
Agreement, with or without reasonable accommodation. A determination of
permanent disability shall be made by a physician satisfactory to both the
Executive and the Company, provided that, if the Executive and the Company do
not agree on a physician, the Executive and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to permanent disability shall be binding on all parties.
4.2 Effects of Termination.
(a) Termination by the Company - Other than For Cause. If
(1) Executive's employment is terminated solely upon the discretion of the
Company pursuant to any reason other than for Cause, as defined below; or (2)
Executive resigns his employment no more than ninety (90) days after Executive
is assigned to report to someone other than the Chief Executive Officer or the
Board of Directors of Company; or (3) Executive resigns his employment no more
than ninety (90) days after Executive's annual salary is reduced by 20%,
Executive shall be entitled to the following:
(i) Salary and Accrued Vacation. Pro-rated salary through the date of
termination, accrued vacation earned but not yet paid through the date
of termination, and any earned but unpaid bonus, the availability and
pro rata calculation of which shall be as determined at the discretion
of the Board of Directors;
(ii) Severance. The Company shall pay to Executive severance equal to
six ( 6) months of Executive's annualized base salary in effect as of
the date of termination, less applicable deductions and withholdings,
either payable in accordance with the Company's usual payroll practices
or in a lump sum paid within thirty (30) days of the last day of
employment with the Company. Such severance is not to be paid merely
upon expiration of this Agreement.
(iii) Medical Benefits. Executive's coverage under the
company-sponsored group health insurance plan will continue through his
or her termination date ("Termination Date"). After the Termination
Date, the Company will continue to maintain Executive as a participant
in its health insurance plan as required under, and insofar as elected
by Executive, Consolidated Omnibus Budget Reconciliation Act of 1985
(often referred to as "COBRA"). The Company will pay Executive's cost
of continued participation until the earlier of: (1) the end of the
noncompete period described in the Nondisclosure, Developments and
Noncompete Agreement per Subsection 3 ("Noncompete Period"); (2)
Executive's commencement of any subsequent employment activity, whether
as an employee, contractor or consultant; or (3) Executive becomes no
longer entitled to coverage under COBRA. In the event that Executive
becomes covered by group health insurance while continuing his or her
health insurance benefits under COBRA, the Company's obligation under
this paragraph shall cease at that time.
(iv) Other Benefits. Executive will be eligible to participate in the
other benefit plans of the Company, at the Company's cost and as long
as continued participation is permitted under the terms and conditions
of such plans, until the earlier of the end of the Noncompete Period or
Executive's commencement of any employment activity including, but not
limited to, employment, consulting or independent contracting.
(b) Termination by the Company - For Cause. The Company may
terminate Executive's employment for Cause at any time upon thirty day's written
notice without cure by the Executive in the case of (a) or (c) of this
paragraph, below, and without prior written notice, in the case of (b) and (d)
of this paragraph, below. If the Company terminates Executive's employment for
Cause, it shall have no further obligations to Executive under this Agreement
except for the payment of (i) awarded but not yet paid bonus, the availability
and pro rata calculation of which shall be as determined at the discretion of
the Board of Directors, (ii) accrued and unpaid salary and vacation time,
through the effective date of termination, and (iii) unpaid expenses incurred by
the Executive and submitted in compliance with this Agreement. For purposes of
this Agreement, "Cause" for termination shall be deemed to exist upon (a) a good
faith finding by the Company or refusal of Executive to perform his or her
assigned duties, consistent with the terms of this Agreement, for the Company,
(b) material dishonesty, (c) a good faith finding by the Company that Executive
has engaged in gross negligence or gross misconduct in a manner that materially
interferes with Executive's job performance, or (d) the conviction of Executive
of, or the entry of a pleading of guilty or nolo contendre by Executive to, any
crime involving moral turpitude or any felony.
(d) Termination through Death or Permanent Disability. In the event of
Executive's death or permanent disability while employed hereunder,
Executive or his legal representative(s) shall be entitled to all amounts
payable through the last date of employment, including pro-rated salary
earned but not yet paid and any earned but unpaid bonus, the availability
and pro rata calculation of which shall be as determined at the discretion
of the Board of Directors. Executive shall further be entitled to the
severance set forth in paragraph 4.2(a)(ii) above.
4.4 Acknowledgment. Executive acknowledges and agrees that the
compensation and benefits provided in this Section 4 have been negotiated with
the Company and shall be deemed to fully satisfy any notice requirements that
may be required by any jurisdiction.
5. MISCELLANEOUS.
5.1 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company's successors in interest,
including, without limitation, successors through merger, consolidation, or sale
of substantially all of the Company's stock or assets, and shall be binding upon
Executive. The Nondisclosure, Developments and Noncompete Agreement and Section
4.2 of this Agreement shall survive the cessation of Executive's employment with
the Company, regardless of who causes the cessation and regardless of the
circumstances surrounding the cessation of employment.
5.2 Notice. All notices required or permitted to be given
under this Agreement shall be given in writing and shall be deemed sufficiently
given if delivered by hand or mailed by registered mail, return receipt
requested, to Executive's respective address and the principal offices of the
Company, both listed above. By giving notice to the other party in accordance
with this Paragraph, each party may change the address at which it is to receive
notices hereunder.
5.3 Applicable Law; Jurisdiction. This Agreement shall be
governed by, construed in, interpreted and enforced in accordance with the laws
of the State of Maine. In the event that any action is commenced concerning the
parties' obligations and rights under this Agreement, and such action is for
whatever reason not subject to the Arbitration provision of paragraph 8.4 below,
each of the Company and Executive agrees to submit itself to the personal
jurisdiction of a competent court sitting within the State of Maine.
5.5 Independent Advice. Executive acknowledges that Executive
has had the opportunity to evaluate this Agreement independently and with
Executive's own professional advisors, and has not received and is not relying
upon legal, tax or other professional advice from or on behalf of the Company in
connection with entering into this Agreement.
5.6 Section Headings. All section headings are included
herein for convenience and are not intended to affect in any way the meaning or
interpretation of this Agreement.
5.7 Severability. In the event any provision of this Agreement
is found to be invalid or unenforceable, such provision shall be severable from
the Agreement and shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
5.8 Entire Agreement. This Agreement, including the exhibits
thereto, and the Nondisclosure, Developments, and Noncompete Agreement
previously signed by Executive constitute the entire agreement between the
parties as to employment by the Company of Executive and may only be changed by
a written document signed by both parties. 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.
5.9 Prior Agreements. This Agreement revokes, replaces and
supersedes any prior agreements and understandings, whether written or oral
relating to the subject matter of this Agreement between the Company and
Executive. IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date set forth above, the Company acting herein by its duly
authorized officer.
I-MANY, INC.
By: /s/ A. Xxxxx Xxxxxx
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Name: A. Xxxxx Xxxxxx
Title: CEO
EXECUTIVE:
/s/ Xxxxx Xxxxxxx
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Xxxxx X. Xxxxxxx
EXHIBIT A TO EMPLOYMENT AGREEMENT
The following provisions referenced in Sections 1 and 2 of the Agreement shall
govern the employment of Xxxxx X. Xxxxxxx by the Company:
1. Position. Chief Financial Officer and Treasurer
2. Term of employment. As provided in the Agreement.
3. Base Salary. Base Salary shall be defined as $175,000 annualized to be
paid in accordance with the Company's regular payroll practices.
4. Employment "At Will". Neither Executive nor the Company must have
"cause" to terminate the Executive's employment relationship with the
Company. The Company reserves the right, in its sole discretion, to
make personnel changes for its own purposes and without limitation.
Either Executive or the Company can terminate the parties' employment
relationship at any time, for any or no reason, without prior notice,
without regard to cause and without incurring any liability other than
as specifically stated in Section 4 of the Agreement. None of the
policies, benefits, programs, or agreements referenced in this
Agreement, nor any such policies, benefits, programs, or agreements as
are later promulgated and/or amended from time to time by the Company,
shall change the at will nature of Executive's employment relationship.
The at will nature of Executive's employment can only be changed by a
written resolution by the Board of Directors of the Company.
5. Supervision. Reporting to the Chief Executive Officer, subject to
discretion of the Board of Directors of the Company.
