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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
BETWEEN
AREMISSOFT CORPORATION
AND
DR. LYCOURGOS X. XXXXXXXXX
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated June 1, 1998, is
entered into by and between AremisSoft Corporation, a Delaware corporation (the
"Company") and Dr. Lycourgos X. Xxxxxxxxx (the "Executive"), collectively
referred to herein as the "parties."
WHEREAS, the Company wishes to employ the Executive to serve as its
Chief Executive Officer and Chairman of the Board of Directors as well as to
perform other duties on behalf of the Company, as determined by the Board of
Directors of the Company (the "Board").
NOW, THEREFORE, for and in consideration of the mutual promises and
conditions made herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows.
ARTICLE I
EMPLOYMENT AND TERM OF EMPLOYMENT
1.1. EMPLOYMENT AND TERM. The Company hereby employs Executive to render
full-time services to the Company on an exclusive basis, upon the terms and
conditions set forth below, from the date of this Agreement until the employment
relationship is terminated in accordance with the provisions of this Agreement.
This Agreement is for a term of three (3) years (the "Stated Term") unless
terminated earlier as provided for herein (the "Employment Term").
1.2. ACCEPTANCE. Executive hereby accepts employment with the Company
and agrees to devote his full-time attention and best efforts exclusively to
rendering the services described below. The Executive shall accept and follow
the direction and authority of the Board in the performance of his duties, and
shall comply with all existing and future regulations applicable to employees of
the Company and to the Company's business.
ARTICLE II
DUTIES OF EMPLOYEE
2.1. GENERAL DUTIES. Executive shall serve as Chief Executive Officer
and Chairman of the Board of Directors of the Company. In such capacities,
Executive shall do and perform all services, acts, or other things necessary or
advisable to manage and conduct the business of the Company, including, but not
limited to, the supervision, direction and control of the business and other
employees of the Company, subject to the policies and direction of the Board. To
the extent consistent with the Company's Certificate of Incorporation
("articles") and Bylaws ("bylaws"), Executive shall have all
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powers, duties and responsibilities necessary to carry out his duties, and such
other powers and duties as the Board may prescribe consistent with the Company's
articles and bylaws.
2.2. EXCLUSIVE SERVICES. It is understood and agreed that the Executive
may not engage in any other business activity during the Employment Term,
whether or not for profit or other remuneration, without the prior written
consent of the Company; provided, however, that the Executive may make personal
financial investments which do not involve any material active participation on
his part, and may engage in charitable, philanthropic, educational, religious,
civic and similar types of activities to the extent that such activities do not
hinder or otherwise interfere with the business of the Company or any affiliate
or subsidiary of the Company, or the performance of the Executive's duties under
this Agreement. Notwithstanding the foregoing, during the Employment Term,
Executive shall not directly or indirectly acquire any stock or interest in any
corporation, partnership, or other business entity that competes, directly or
indirectly, with the business of the Company without obtaining the prior written
consent of the Company.
It is also understood and agreed that the Executive will not compete
with the Company during the Employment Term. For purposes of this Agreement, the
phrase "compete with the Company," or the substantial equivalent thereof, means
that Executive, either alone or as a partner, member, director, employee,
shareholder or agent of any other business, or in any other individual or
representative capacity, directly or indirectly owns, manages, operates,
controls, or participates in the ownership, management, operation or control of,
or works for or provides consulting services to, or permits the use of his name
by, or lends money to, any business or activity which is or which becomes, at
the time of the acts or conduct in question, directly or indirectly competitive
with the development, financing and/or marketing of the products, proposed
products or services of the Company.
2.3. REPORTING OBLIGATIONS. In connection with the performance of his
duties hereunder, unless otherwise instructed by the Board, the Executive shall
report directly to the Board.
ARTICLE III
COMPENSATION AND BENEFITS OF EMPLOYEE
3.1. ANNUAL BASE SALARY. The Company shall pay the Executive salary for
the services to be rendered by him during the term of this Agreement at the rate
of two hundred fifty thousand dollars ($250,000) annually (prorated for any
portion of a year), subject to increases, if any, as the Company's Compensation
Committee may determine in its sole discretion after periodic review of the
Executive's performance of his duties hereunder. Such base salary shall be
payable in periodic installments in accordance with the terms of the Company's
regular payroll practices in effect from time to time during the term of this
Agreement, but in no event less frequently than once each month.
3.2. BONUSES. In addition to the base salary and other benefits provided
to Executive hereunder, Executive is eligible to receive bonuses based on
performance and Executive's attainment of objectives established by the Board or
Compensation Committee periodically. The bonuses to be provided to the Executive
shall not exceed seventy five percent (75%) of his annual base salary, as
defined in Section 3.1. above, then in effect.
3.3. STOCK OPTIONS. Upon stockholder approval of the Company's 1998
Stock Option Plan, Executive may be granted stock options to purchase shares of
the Company's common stock, as
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determined from time to time by the Board or Compensation Committee and subject
to (a) the terms and conditions contained in the Company's 1998 Stock Option
Plan, (b) the terms and conditions set forth herein and (c) the Executive's
execution of a stock option agreement and all documents customarily required by
the Company to effect the grant of the options.
3.4. EXPENSES. The Company shall pay or reimburse the Executive for all
reasonable, ordinary and necessary business expenses actually incurred or paid
by the Executive in the performance of Executive's services under this Agreement
in accordance with the expense reimbursement policies of the Company in effect
from time to time during the Employment Term, upon presentation of proper
expense statements or vouchers or such other written supporting documents as the
Company may reasonably require.
3.5. VACATION. The Executive shall be entitled to four (4) weeks paid
vacation for each calendar year (prorated for any portion of a year, as
applicable). Notwithstanding anything to the contrary in this Agreement,
vacation time shall cease to accrue beyond eight weeks at any given time during
the Employment Term.
3.6. INDEMNIFICATION. Consistent with the terms of the Company's
articles and bylaws, the Company shall indemnify Executive against any losses,
costs, damages or expenses incurred as a direct consequence of the discharge of
his duties or by reason of his status as an agent of the Company and hold
Executive harmless for any actions taken or decisions made by him in good faith
while performing services in his capacity as Chief Executive Officer and
Chairman of the Board of the Company during the Employment Term.
3.7. GENERAL EMPLOYMENT BENEFITS. Except where expressly provided for
herein, the Executive shall be entitled to participate in, and to receive the
benefits under, any pension, health, life, accident and disability insurance
plans or programs and any other employee benefit or fringe benefit plans that
the Company makes available generally to its employees, as the same may be in
effect from time to time during the Employment Term.
ARTICLE IV
TERMINATION OF EMPLOYMENT
4.1. TERMINATION. This Agreement may be terminated earlier as provided
for in this Article IV, or extended by further written agreement of the parties.
4.2. TERMINATION FOR CAUSE. The Company reserves the right to terminate
this Agreement for cause upon: (a) Executive's willful and continued failure to
substantially perform his duties with the Company (other than such failure
resulting from his incapacity due to physical or mental illness) (b) Executive's
willful engagement in gross misconduct, as determined by the Board, which is
materially and demonstrably injurious to the Company; or (c) Executive's
commission of a felony, or an act of fraud against the Company or its
affiliates.
Executive shall not be entitled to any severance benefits and all
options which have not vested shall be canceled upon termination for cause.
4.3. TERMINATION WITHOUT CAUSE. Notwithstanding anything to the contrary
in this Agreement, the Company reserves the right to terminate this Agreement at
any time upon thirty (30) days written notice to Executive, without cause,
subject to the express terms and provisions below.
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4.4. SEVERANCE BENEFIT UPON TERMINATION WITHOUT CAUSE. Notwithstanding
anything to the contrary in this Agreement, if Executive is terminated without
cause, Executive shall receive a lump sum cash payment equal to the annual base
salary of Executive, as contained in Section 3.1 of this Agreement, then in
effect.
4.5. VOLUNTARY TERMINATION BY EXECUTIVE. Notwithstanding anything to the
contrary in this Agreement, Executive may terminate this Agreement at any time
upon thirty (30) days written notice to the Company, subject to the terms and
provisions below.
Other than termination "without cause", as contained in Section 4.4 of
this Agreement, or a "change of control" of the Company, as contained in Section
4.6 of this Agreement, the Company shall not be obligated to pay any severance
benefit to Executive if Executive terminates this Agreement pursuant to this
Section 4.5.
4.6. SEVERANCE BENEFIT UPON CHANGE IN CONTROL. Notwithstanding anything
to the contrary in this Agreement, if the Company terminates this Agreement for
any reason, other than "for cause" pursuant to Section 4.2 of this Agreement,
within one hundred eighty (180) days of a "change of control" as hereinafter
defined, the Company shall pay Executive a lump sum cash payment equal to 2.99
times the annual base salary of Executive, as contained in Section 3.1 of this
Agreement, or Executive's then current rate of compensation, whichever is
greater. For purposes of this Section 4.6, a "change of control" shall mean an
event involving one transaction or a series of related transactions in which (i)
the Company issues securities equal to more than fifty percent (50%) of the
issued and outstanding capital stock of the Company to any individual, firm,
partnership, or other entity, including a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"), (ii) the
Company issues securities equal to more than fifty percent (50%) of the issued
and outstanding capital stock of the Company in connection with a merger,
consolidation or other business combination (other than for purposes of
reincorporation), (iii) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than a reincorporation), or (iv) more than fifty percent (50%) of the
Company's consolidated assets or earning power are sold or transferred.
4.7. DISABILITY. If Executive becomes permanently and totally disabled,
this Agreement shall be terminated. Executive shall be deemed permanently and
totally disabled if he is unable to engage in the activities required by this
Agreement by reason of any medically determinable physical or mental impairment,
as confirmed by three independent physicians, which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months. Upon termination due to disability, Executive shall be
entitled to receive a lump sum payment equal to his annual base salary, as
contained in Section 3.1 of this Agreement, then in effect.
4.8. DEATH. If Executive dies during the term of this Agreement, this
Agreement shall be terminated on the last day of the calendar month of his death
subject to the express terms and provisions below.
Upon termination due to death, the designated beneficiary, as provided
in Section 6.8 below, or the estate or representative of Executive, shall be
entitled to receive a lump sum payment equal to his annual base salary, as
contained in Section 3.1 of this Agreement, then in effect.
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4.9. EFFECT OF TERMINATION. Except as expressly provided for in this
Agreement, the termination of employment shall not impair any obligation that
accrued prior to termination, nor shall it excuse the performance of any
obligation which is required or contemplated hereunder to be performed after
termination, and any such obligation shall survive the termination of employment
and this Agreement.
ARTICLE V
COVENANTS AND REPRESENTATIONS OF EMPLOYEE
5.1. UNFAIR AND NON-COMPETITION. The Executive acknowledges that he will
have access at the highest level to, and the opportunity to acquire knowledge
of, the Company's customer lists, customer needs, business plans, trade secrets
and other confidential and proprietary information from which the Company may
derive economic or competitive advantage, and that he is entering into the
covenants and representations in this Article V in order to preserve the
goodwill and going concern value of the Company, and to induce the Company to
enter into this Agreement. The Executive agrees not to compete with the Company
or to engage in any unfair competition with Employer during the Employment Term,
but not limited to the acts and conduct described below.
5.2. CONFIDENTIAL INFORMATION. During the Employment Term, Executive
agrees to keep secret and to retain in the strictest confidence all confidential
matters which relate to the Company or its "affiliate" (as that term is defined
in the Exchange Act), including, without limitation, customer lists, client
lists, trade secrets, pricing lists, business plans, financial projections and
reports, business strategies, internal operating procedures, and other
confidential business information from which the Company derives an economic or
competitive advantage, or from which the Company might derive such advantage in
its business, labeled "secret" or "confidential" or some similar term, and not
to disclose any such information to anyone outside of the Company, whether
during or after the Employment Term, except as required in connection with
performing the services to the Company.
5.3. NON-SOLICITATION OF CUSTOMERS. During the Employment Term, the
Executive will have access to confidential records and data pertaining to the
Company's customers, their needs, and the relationship between the Company and
its customers. Such information is considered secret and is disclosed during the
Employment Term in confidence. Accordingly, during the Employment Term,
Executive and any entity controlled by him or with which he is associated (as
the terms "control" and "associate" are defined in the Exchange Act) shall not,
directly or indirectly (i) solicit for a competitive purpose, interfere with,
induce or entice away any person or entity that is or was a client, customer or
agent of the Company or its affiliates (as the term "affiliate" is defined in
the Exchange Act), or (ii) in any manner persuade or attempt to persuade any
such person or entity (A) to discontinue its business relationship with the
Company or its affiliates, or (B) to enter into a business relationship with any
other entity or person the loss of which the Executive should reasonably
anticipate would be detrimental to the Company or its affiliates in any respect.
5.4. NON-SOLICITATION OF EXECUTIVES. The Executive and any entity
controlled by him or with which he is associated (as the terms "control" and
"associate" are defined in the Exchange Act) shall not, during the Employment
Term, directly or indirectly solicit, interfere with, offer to hire or induce
any person who is or was an officer or employee of the Company or any affiliate
(as the term "affiliate" is defined in the Exchange Act) (other than secretarial
personnel) to discontinue his or her relationship with the Company or an
affiliate of the Company, in order to accept employment by, or enter into a
business relationship with, any other entity or person. (These acts are
hereinafter referred to as the "prohibited
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acts of solicitation.") The foregoing restriction, however, shall not apply to
any business with which Executive may become associated after the Employment
Term.
5.5. RETURN OF PROPERTY. Upon termination of employment, and at the
request of the Company, the Executive agrees to promptly deliver to the Company
all Company or affiliate memoranda, notes, records, reports, manuals, drawings,
designs, computer files in any media, and other documents (including extracts
and copies thereof) relating to the Company or its affiliates, and all other
property of the Company.
5.6. INVENTIONS. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed by
the Executive, either alone or with others, during the Employment Term, whether
or not conceived or developed during Executive's working hours, and with respect
to which the equipment, supplies, facilities or trade secret information of the
Company was used, or that relate at the time of conception or reduction to
practice of the invention to the business of the Company, or to the Company's
actual or demonstrably anticipated research or development, or that result from
any work performed by Executive for the Company, shall be the sole property of
the Company. Upon the request of the Company, Executive shall disclose to the
Company all inventions or ideas conceived during the Employment Term, whether or
not the property of the Company under the terms of this provision, provided that
such disclosure shall be received by the Company in confidence. Upon the request
of the Company, Executive shall execute all documents, including patent
applications and assignments, required by the Company to establish the Company's
rights under this provision.
5.7. REPRESENTATIONS. The Executive represents and warrants to the
Company that he has full power to enter into this Agreement and perform his
duties hereunder, and that his execution and delivery of this Agreement and the
performance of his duties shall not result in a breach of, or constitute a
default under, any agreement or understanding, whether oral or written,
including, without limitation, any restrictive covenant or confidentiality
agreement, to which he is a party or by which he may be bound.
5.8. NON-PAYMENT UPON NON-COMPLIANCE. Should Executive breach any one of
the covenants set forth in this Article V, the Company shall have no obligation
to make the payments or to provide Executive the benefits described in Sections
4.4 or 4.6 above, as applicable, in addition to all other rights and remedies
the Company may have available at law or in equity. The Company shall provide
written notice to Executive, ten (10) days prior to an expected payment, of the
breach of a covenant and the ensuing non-payment thereof; provided, however,
that if the Company learns of the breach without sufficient time to provide ten
(10) days notice, the Company shall provide written notice as soon thereafter as
practicable.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. NOTICES. All notices to be given by either party to the other shall
be in writing and may be transmitted by personal delivery, facsimile
transmission, overnight courier or mail, registered or certified, postage
prepaid with return receipt requested; provided, however, that notices of change
of address or telex or facsimile number shall be effective only upon actual
receipt by the other party. Notices shall be delivered at the following
addresses, unless changed as provided for herein.
To the Executive:
Dr. Lycourgos X. Xxxxxxxxx
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To the Company:
AremisSoft Corporation
00 Xxxxxxxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Facsimile: 011-44-171-309-1555
With Copy to:
Xxxxx X. Xxxxxx
XXXXXX ENG XXXX & XXXXXXXX
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
6.2. NO ASSIGNMENT, IN GENERAL. Except as provided below, this
Agreement, and the rights and obligations of the parties, may not be assigned by
either party without the prior written consent of the other party.
6.3. WITHHOLDING TAXES. All amounts payable under this Agreement,
whether such payment is to be made in cash or other property, including without
limitation stock of the Company, shall be subject to withholding for Federal,
state and local income taxes, employment and payroll taxes, and other legally
required withholding taxes and contributions to the extent appropriate in the
determination of the Company, and the Executive agrees to report all such
amounts as ordinary income on his personal income tax returns and for all other
purposes, as called for.
6.4. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by any judgment of a tribunal of competent
jurisdiction, the remaining provisions and terms of this
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Agreement shall not be affected by such judgment, and this Agreement shall be
carried out as nearly as possible according to its original terms and intent
and, to the full extent permitted by law, any provision or restrictions found to
be invalid shall be amended with such modifications as may be necessary to cure
such invalidity, and such restrictions shall apply as so modified, or if such
provisions cannot be amended, they shall be deemed severable from the remaining
provisions and the remaining provisions shall be fully enforceable in accordance
with law.
6.5. EFFECT OF WAIVER. The failure of either party to insist on strict
compliance with any provision of this Agreement by the other party shall not be
deemed a waiver of such provision, or a relinquishment of any right thereunder,
or to affect either the validity of this Agreement, and shall not prevent
enforcement of such provision, or any similar provision, at any time.
6.6. DESIGNATION OF BENEFICIARY. If the Executive shall die before
receipt of all payments and benefits to which he is entitled under this
Agreement, payment of such amounts or benefits in the manner provided herein
shall be made to such beneficiary as he shall have designated in writing filed
with the Secretary of the Company or, in the absence of such designation, to his
estate or personal representative.
6.7. ATTORNEYS FEES. In the event of any litigation arising out of this
Agreement, or the parties' performance as outlined herein, the prevailing party
shall be entitled to an award of costs, including an award of reasonable
attorney's fees.
6.8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
COMPANY: AREMISSOFT CORPORATION
By:
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Roys Poyiadjis
President
EXECUTIVE:
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Dr. Lycourgos X. Xxxxxxxxx
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