EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into as of February 15, 2000
by and between MedPlus, Inc., and Ohio corporation with its
principal offices at 0000 Xxxxxxxx'x Xxxx Xxxxx, Xxxxxxxxxx, XX
00000 (the "Company") and Xxxxx Xxxxxxx, who resides at 0000 Xxxxx
Xxxx., Xxxxxx, XX 00000 (the "Employee").
WHEREAS, the Company desires to employ the Employee on
certain terms and conditions as set forth herein; and
WHEREAS, the Employee is willing to accept such employment.
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants and promises hereinafter contained, do hereby
agree as follows:
1. Employment. The Company hereby agrees to employ Employee in
the capacity of Vice President of Sales or in such other position
as the Company and Employee may mutually agree and the Employee
hereby accepts such employment on the terms and conditions
hereinafter set forth. Employee shall report to the Chief
Operating Officer of the Company.
2. Duties. The Employee's principal duties and responsibilities
shall include:
a. conceptualizing and implementing sales strategies to develop
new business opportunities;
b. coordinating sales efforts;
c. developing and executing comprehensive sales plans and
programs, both short and long range, to support MedPlus' sales,
revenue and profitability objectives;
d. establishing and maintaining relationships with industry
influencers and strategic partners;
e. ensuring effective control of sales results, including taking
corrective action to guarantee that achievement of objectives
falls within designated budgets;
f. determining target sales volume, budgets and sales strategies
to achieve satisfactory sales and market share in relation to
preset standards and industry and economic trends; and
g. preparing and presenting sales activity reports to corporate
officers and senior management.
Employee agrees well and faithfully to perform and discharge such
services and duties and hold such offices as may be assigned to
him from time to time by the Company and to devote substantially
his full time, energies, and best efforts to the performance
thereof, to exercise his best efforts, judgment, skills and
talents in performing such duties and, in general, with respect to
the business and affairs of the Company, and, in the performance
thereof, to comply with the policies of and be subject to the
direction of the Board of Directors of the Company (the "Board").
In addition, during the term of this Agreement, Employee shall
not, directly or indirectly, engage or participate in, or become
employed by or render services in connection with, any Competitive
Business, as that term is defined herein, without the prior
express written approval of the Board. In the event the Employee
is elected a Director of the Company or any of its subsidiaries
during the term hereof, the Employee agrees to serve in such
capacity without further compensation.
3. Term. The term of employment shall begin on February 15,
2000, shall continue until January 31, 2001 (the "Initial Term"),
and shall be automatically renewed for successive twelve-month
terms (the "Renewal Terms"), unless earlier terminated pursuant to
the provisions hereof or unless one party gives written notice to
the other 30 days prior to any Renewal Term of his or its desire
not to renew this Agreement (the Initial Term and any Renewal
Term(s) shall be referred to as the "Term).
4. Salary and Other Compensation. As compensation for the
services to be rendered by the Employee to the Company pursuant to
this Agreement the Employee shall be compensated as follows:
a. Base Salary. During the Term, Employee shall be paid at the
semi-monthly rate of $6,875.00, payable in arrears, unless
adjusted in accordance with Section 4(b) hereof.
b. Commission. During the Term, Employee shall be eligible for a
commission equal to 1% of Net Margin on new system sales,
including hardware and software upgrades, of the ChartMaxx and
OptiMaxx products. For purposes hereof, "Net Margin" shall mean
(i) gross hardware and software revenue received less hardware and
software costs and (ii) 25% of gross revenue received on
consulting, training, installation and integration services. Net
Margin shall not include any revenue related to support services.
c. Relocation. The Company will provide reasonable relocation
assistance to Employee per the attached Relocation and Moving
Expenses Guidelines (the "Guidelines"). The Company agrees to
reimburse Employee for reasonable expenses incurred in two house
hunting trips, actual relocation expenses, and movement of goods,
as described in the Guidelines. In addition, the Company will
reimburse Employee for (i) reasonable pre-approved closing costs
for the purchase of a new home and (ii) a realtor fee negotiated
to 6% or less on the sale of Employee's current home. The total
amount of all monies reimbursed to Employee or paid on Employee's
behalf in conjunction with his and his family's relocation to
Cincinnati, Ohio shall not exceed $30,000. Should Employee
voluntarily leave the Company or should his employment be
terminated for Just Cause (as hereinafter defined), within one
year following the date Employee has moved into his new home in
Cincinnati, Ohio, Employee will be required to reimburse the
Company immediately for all relocation assistance provided as
described herein.
d. Limited Disability. Should the Employee become disabled,
which for purposes of this subsection means that he is unable to
perform his duties hereunder for at least 40 hours per week due to
any physical or emotional illness, and such disability continues
for more than four consecutive weeks but for less than six months
("Limited Disability"), then Employee's base salary shall be
adjusted as follows: for a period beginning four weeks after the
onset of the Limited Disability and continuing until Employee is
no longer so disabled or until termination of this Agreement,
whichever occurs first (the "Disability Period"), Employee's base
salary shall be reduced in proportion to the number of hours per
week relative to 40 Employee is able to perform his duties
hereunder. In addition, if any payments are made to Employee as a
result of such Limited Disability which payments are made pursuant
to any type of insurance policy, the premiums of which were paid
by the Company, then any base salary owed Employee during such
Disability Period shall be reduced thereby. Nothing in this
paragraph 4(b) shall be interpreted to reduce or increase any
payments which may be due Employee pursuant to a long-term or
short-term disability insurance policy for which the Company has
made premium payments.
e. MedPlus, Inc. 1994 Long-Term Stock Incentive Plan. Subject to
approval by the Board of Directors of the Company, Employee shall
be granted the option to purchase 25,000 shares of the common
stock of the Company in accordance with the MedPlus, Inc. 1994
Long-Term Stock Incentive Plan (the "Plan"). After one year of
employment, the Company may, from time to time enter into
supplemental written agreements with Employee granting Employee
stock options to purchase shares of the Company's common stock
under the Plan. In the absence of any such agreements, the
Company shall not be obligated to award Employee any stock
options, regardless of whether stock options were awarded to
Employee in any other period or to any other employee of the
Company at any time.
f. Employee Benefit Plans. Commencing as of the Effective Date,
Employee shall be entitled to participate in or receive benefits,
to the extent he is eligible, under any Company-sponsored employee
benefit plans and arrangements in effect from time to time during
the Term; provided, however, that the Company shall not be
required to establish or maintain any such plan or arrangement.
5. Key Man Life Insurance. The Company, in its discretion, may
apply for and procure in its own name and for its own benefit life
insurance on the life of the Employee in any amount(s) considered
advisable by the Company. The Employee shall submit to any
medical or other examination and shall execute and deliver any
application or other instrument reasonably necessary to effect
such insurance.
6. Expenses. Commencing as of the Effective Date, the Company
shall pay or reimburse employee during the Term for all reasonable
travel and other business expenses, including the costs associated
with the use of a cellular telephone and a 128K home Internet
connection, incurred by the Employee in the performance of his
duties and obligations hereunder upon submission of appropriate
documentation to the Company therefor.
7. Vacation and Leave. All vacation accrues per pay period. The
Employee shall be entitled to three weeks of vacation during the
Initial Term of this agreement. Officers of the Company may not
carry unused vacation time from one calendar year to another.
8. Non-Disclosure of Confidential Information. The Employee
acknowledges that as a result of his employment by the Company, he
will be making use of, acquiring and/or adding to confidential
information of a special and unique nature and value relating to
the Company's intellectual property, proprietary information,
trade secrets, systems, procedures, manuals, confidential reports
and customer lists and all information specifically related to
customer lists and customer sales and service (collectively
"Confidential Information"). As a material inducement to the
Company to enter into this Agreement and to pay to Employee the
compensation stated in Section 4 hereof, Employee covenants and
agrees that he shall not, at any time during or following the
Term, directly or indirectly divulge or disclose for any purpose
whatsoever any Confidential Information. In the event of a breach
or threatened breach by Employee of any of the provisions of this
Section 8, the Company, in addition to and not in limitation of
any other rights, remedies or damages available to the Company at
law or in equity shall be entitled to a permanent injunction in
order to prevent or restrain any such breach by the Employee or by
Employee's partners, agents, representatives, servants, employers,
employees, family members and/or any and all persons directly or
indirectly acting for or with him.
9. Covenants Against Competition. The Employee acknowledges that
the services he is to render are of a special and unusual
character with a unique value to the Company, the loss of which
cannot adequately be compensated by damages in an action at law.
In view of the unique value to the Company of such services,
because of the confidential information to be obtained by or
disclosed to Employee as hereinabove set forth, and as a material
inducement to the Company to enter into this Agreement and to pay
Employee the compensation stated in Section 4, Employee covenants
and agrees that during Employee's employment and for a period of
one (1) year after he ceases to be employed by the Company for any
reason, he will not, except as otherwise authorized by this
Agreement, compete with the Company or any affiliate of the
Company, solicit the Company's customers or the customers of an
affiliate, or directly or indirectly solicit for employment any of
the Company's employees. For purposes of this Section 9:
a. the term "compete" means engaging in the same or any similar
business as the Company or any of its affiliates in any manner
whatsoever (other than as a passive investor), including without
limitation, as a proprietor, partner, investor, shareholder,
director, officer, employee, consultant, independent contractor,
or otherwise, within a geographic areas served by the Company or
any of its affiliates;
b. the term "affiliate" means any legal entity that directly or
indirectly through one or more intermediaries controls, is
controlled by, controls or is under common control with the
Company; and
c. the term "customers" means all persons to whom the Company or
any of its affiliates has sold any product or service, whether or
not for compensation, within a period of one (1) year prior to
the time the Employee ceases to be employed by the Company.
10. Reasonableness of Restrictions.
a. The Employee has carefully read and considered the provisions
of Sections 8 and 9, and, having done so, agrees that the
restrictions set forth in said Sections, including, but not
limited to, the time period of restriction and geographical areas
of restriction are fair and reasonable and are reasonably required
for the protection of the interests of the Company and its parent
or subsidiary corporations, officers, directors, shareholders, and
other employees.
b. In the event that, notwithstanding the foregoing, any of the
provisions of Sections 8 and 9 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. In the event
that any provision of Sections 8 or 9 relating to the time period
and/or the areas of restriction and/or related aspects shall be
declared by a court of competent jurisdiction to exceed the
maximum restrictiveness such court deems reasonable and
enforceable, the time period and/or areas of restriction and/or
related aspects deemed reasonable and enforceable by the court
shall become and thereafter be the maximum restriction in such
regard, and the restriction shall remain enforceable to the
fullest extent deemed reasonable by such court.
11. Remedies for Breach of Employee's Covenants of Non-Disclosure
and Non-Competition. In the event of a breach or threatened
breach of any of the covenants in Sections 8 and 9, the Company
shall have the right to seek monetary damages for any past breach
and equitable relief, including specific performance by means of
an injunction against the Employee or against the Employee's
partners, agents, representatives, servants, employers, employees,
family members, and/or any and all persons acting directly or
indirectly by or with him, to prevent or restrain any further
breach. In lieu thereof, or should a court refuse for any reason
to grant equitable relief to prevent continuing breaches of the
covenants in Sections 8 and 9, the Company shall be entitled to
liquidated damages equal to fifty percent (50%) of the gross
amount derived by the breaching party from all transactions in
breach of said covenants, it being agreed that such amount
represents the estimated amount of profit the Company could have
derived if it had transacted the business in question and is not a
penalty.
12. Termination. Employment of the Employee under this Agreement
will be terminated as follows:
a. By the Employee's death.
b. If the Employee is Totally Disabled. For the purposes of this
Agreement, the Employee will be Totally Disabled if he (1) has
been declared legally incompetent by a final court decree (the
date of such decree being deemed to be the date on which the
disability occurred), (2) receives disability insurance benefits
from any disability income insurance maintained by the Company for
a period of three (3) consecutive months, or (3) has been found to
be disabled pursuant of a Disability Determination. A "Disability
Determination" means a finding that the Employee, because of a
medically determinable disease, injury, or other mental or
physical disability, is unable to perform substantially all of his
regular duties to the Company and that such disability is
determined or reasonably expected to last at least six (6) months.
The Disability Determination shall be based on the written
opinion of the physician regularly attending the Employee whose
disability is in question. If the Company disagrees with the
opinion of this physician (the "First Physician"), it may engage
at its own expense another physician (the "Second Physician") to
examine the Employee. If the First and Second Physicians agree in
writing that the Employee is or is not disabled, their written
opinion shall, except as otherwise set forth in this Subsection,
be conclusive on the issue of disability. If the First and Second
Physicians disagree on the disability of the Employee, they shall
choose a third consulting physician (whose expense shall be borne
by the Company), and the written opinion of a majority of these
three physicians shall, except as otherwise provided in this
Subsection, be conclusive as to the Employee's disability. The
date of any written opinion conclusively finding the Employee to
be disabled is the date on which the disability will be deemed to
have occurred. If there is a conclusive finding that the Employee
is not Totally Disabled, the Company shall have the right to
request additional Disability Determinations, provided it agrees
to pay all the expenses of the Disability Determinations and does
not request an additional Disability Determination more frequently
than once every two (2) months. In conjunction with a Disability
Determination, the Employee hereby consents to any required
medical examination, and agrees to furnish any medical information
requested by any examining physician and to waive any applicable
physician-patient privilege that may arise because of such
examination. All physicians except the First Physician must be
board-certified in the specialty most closely related to the
nature of the disability alleged to exist.
c. At the election of either the Employee or the Company without
cause, upon ninety (90) days written notice.
d. When the Employee reaches mandatory retirement age under any
retirement policy applicable to all executive officers adopted by
the Company.
e. By mutual agreement of the Employee and the Company.
f. By the dissolution and liquidation of the Company (other than
as part of a reorganization, merger, consolidation, or sale of all
or substantially all of the assets of the Company whereby the
business of the Company is continued).
g. By the Company for Just Cause. For purposes of the Agreement
"Just Cause" shall mean the following: (i) a conviction of or a
plea of guilty or nolo contendre by the Employee to a felony or
misdemeanor involving fraud, embezzlement, theft, or dishonesty or
other criminal conduct against the Company; (ii) habitual neglect
of the Employee's duties or failure by the Employee to perform or
observe any substantial lawful obligation of such employment that
is not remedied within thirty (30) days after written notice
thereof from the Company or its Board of Directors; or (iii) any
material breach of this Agreement by the Employee. Should the
Employee dispute whether he was terminated for Just Cause, the
Company and the Employee shall enter immediately into binding
arbitration pursuant of the Commercial Arbitration Rules of the
American Arbitration Association, the cost of which shall be borne
by the non-prevailing party.
In the event of termination of this Agreement other than for
death, the Employee hereby agrees to resign from all positions
held in the Company, including without limitation any position as
a director, officer, agent, trustee, or consultant of the Company
or any affiliate of the Company. For the purposes of this
provision, the term "affiliate" has the same meaning as in Section
9.
13. Waiver. A party's failure to insist on compliance or
enforcement of any provision of this Agreement, shall not affect
the validity or enforceability or constitute a waiver of future
enforcement of that provision or of any other provision of this
Agreement by that party or any other party.
14. Governing Law. This Agreement shall in all respects be
subject to, and governed by, the laws of the State of Ohio.
15. Severability. The invalidity or unenforceability of any
provision in the Agreement shall not in any way affect the
validity of enforceability of any other provision and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision had never been in the Agreement.
16. Notice. Any and all notices required or permitted herein
shall be deemed delivered if delivered personally or if mailed by
registered or certified mail to the Company at its principal place
of business and to the Employee at the address first above set
forth, or at such other address or addresses as either party may
hereafter designate in writing to the other.
17. Assignment. This Agreement, together with any amendments
hereto, shall be binding upon and shall inure to the benefits of
the parties hereto and the respective successors, assigns, heirs
and personal representatives, except that the rights and benefits
of either of the parties under this Agreement may not be assigned
without the prior written consent of the other party.
18. Amendments. This Agreement may be amended at any time by
mutual consent of the parties provided, however, that no such
amendment shall be valid or enforceable unless in a writing signed
by the Company, as authorized by it Board of Directors, and the
Employee.
19. Applicability of Invention and Non-Disclosure Agreement.
This Employment Agreement is supplemented by that certain
Invention and Non-Disclosure Agreement of even date herewith
between the Company and the Employee, a copy of which is attached
hereto as Schedule A and made a part hereof. These two documents
contain the entire agreement and understanding by and between the
Employee and the Company with respect to the employment of the
Employee with the Company and supersedes and merges all prior
proposals, understandings and all other agreements, oral and
written between the parties. No representations, promises,
agreements, or understandings, written or oral, with respect to
such employment not contained in these two documents shall be of
any force or effect.
20. Headings. The various headings in this Agreement are
inserted for convenience only and are not part of the Agreement.
IN WITNESS WHEREOF, the Company and the Employee have duly
executed this Agreement as of the day and year first above
written.
MedPlus, Inc.: Employee:
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxx, President Xxxxx Xxxxxxx
February 17, 2000
Xxxxx X. Xxxxxxx
0000 Xxxxx Xxxx.
Xxxxxx, XX 00000
Dear Xxxx:
Per our conversation today, MedPlus agrees to the following amendment to
your relocation clause in your Employment Agreement. Section 4(c):
Relocation. The Company will provide reasonable relocation assistance to
Employee per the attached Relocation and Moving Expenses Guidelines (the
"Guidelines"). The Company agrees to reimburse Employee for reasonable
expenses incurred in two house hunting trips, actual relocation expenses,
and movement of goods, as described in the Guidelines. In addition,
the Company will reimburse Employee for (i) reasonable pre-approved closing
costs for the purchase of a new home and (ii) a realtor fee negotiated to 6%
or less on the sale of Employee's current home. The total amount of all
monies reimbursed to Employee or paid on Employee's behalf in conjunction
with his and his family's relocation to Cincinnati, Ohio shall not exceed
$30,000. In addition, during the period from February 11, 2000 through
April 30, 2000, MedPlus agrees to reimburse Employee for 100% of hotel costs
while Employee is commuting to Cincinnati on MedPlus business. During this
period, MedPlus will also reimburse Employee for automobile mileage for two
round-trips between Employee's home and the MedPlus corporate office.
Beginning May 1, 2000, Employee will be reimbursed for these same charges;
however, any reimbursements occurring after April 30, 2000 will go against
the above-mentioned $30,000 relocation limit. Should Employee voluntarily
leave the Company or should his employment be terminated for Just Cause (as
hereinafter defined), within one year following the date Employee has moved
into his new home in Cincinnati, Ohio, Employee will be required to
reimburse the Company immediately for all relocation assistance provided as
described herein.
I am looking forward to working with you.
Sincerely,
/s/ Xxx X. Xxxxx
Xxx X. Xxxxx, SPHR
Director of Human Resources
/s/ Xxxxx X. Xxxxxxx February 11, 2000
Xxxxx X. Xxxxxxx
