EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into effective as of the 1st day
of February, 2000 by and between MedPlus, Inc., an Ohio
corporation (the "Company"), and Xxxx Xxxxxxxx (the "Employee").
WHEREAS, the Company desires to employ or continue 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 employs or continues to
employ the Employee in the capacity of Vice President and Chief
Technology Officer, or in such other position as the Company may
direct or desire and Employee hereby accepts the employment, on
the terms and conditions hereinafter set forth.
2. Duties. The Employee's principal duties and responsibilities
shall include: planning and managing future product and
development activities of the Company; providing technical
support and training for the Company's sales force, assisting in
the promotion and sales of products through participation at
national, local, and regional trade shows and other appropriate
forums; participation in direct end-user sales presentations; and
such other duties which may be assigned to him from time to time
by the Company in connection with the conduct of its business.
Nothing herein shall preclude the Company from changing the
Employee's title and duties if the Company has concluded in its
reasonable judgement that such change is in the Company's best
interests. Employee agrees to well and faithfully 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
his full time, energies, and best efforts to the performance
thereof to the exclusion of all other business activities. In
the event the Employee is elected a Director of the Company or
any subsidiary during the term of this Agreement, the Employee
agrees to serve in such capacity without further compensation.
3. Term. The term of employment shall begin on February 1, 2000
and shall continue for a period of twelve (12) months, unless
earlier terminated pursuant to the provisions of this Agreement.
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 paid the following
compensation and other benefits:
(a) Salary. During the Term, Employee shall be paid at the semi-
monthly rate of Six Thousand and 00/100 ($6,000.00), payable in
arrears, unless adjusted in accordance with Section 4(b) hereof.
Should the employee become disabled, which for purposes of this
Subsection means the inability because of any physical or
emotional illness to perform his assigned duties under this
Agreement at least forty (40) hours per week, the Employee's
salary shall be adjusted in the proportion which the number of
hours the Employee is able to perform his assigned duties during
a week bears to forty (40). If the Employee, during any period
of disability, receives any periodic payments representing lost
compensation under any health and accident policy or under any
salary continuation insurance policy, the premiums for which have
been paid by the Company, the amount of salary that the Employee
would be entitled to receive from the Company during the
disability shall be decreased by the amounts of such payments.
(a) Incentive Compensation. For all ChartMaxx and OptiMaxx
hardware and software revenue (including new sales and upgrades)
over $50,000.00 per contract, Employee shall be paid 1% of such
revenue. Employee shall not be eligible for any incentive
compensation related to service revenue. In addition, Employee
shall be eligible for a $10,000.00 bonus upon successful
completion of the e-health project. Successful completion shall
be defined as the completion of lab connectivity for orders and
results for puposes of this bonus. Incentive Compensation shall
be paid to Employee within thirty days of the date on which the
Company has shipped to the customer system hardware & software
representing more than 50% of the dollar value of all hardware
and software to be shipped to such customer with respect to the
relevant system or major upgrade.
(b) Automobile Allowance. During the term of this Agreement,
the Company shall pay Employee a $450.00 per month automobile
allowance in order to reimburse Employee for the expense of
owning, operating, maintaining and insuring a personal automobile
for use in performing Employee's duties hereunder.
(c) Employee Benefit Plans. Employee shall be eligible to
participate, to the extent he may be eligible to participate
pursuant to the terms of such plans, in any profit sharing,
retirement, insurance or other employee benefit plans maintained
by the Company.
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 or
amounts considered advisable by the Company, and the Employee
shall submit to any medical or other examination, and shall
execute and deliver any application or other instrument in
writing, reasonably necessary to effectuate such insurance.
6. Expenses. The Company shall pay, or reimburse the Employee,
for all reasonable and necessary business expenses of the
Employee approved by the Company.
7. Vacation and Leave. The Employee shall be entitled to the
same vacation and leave time as the other executive level
employees of the Company. Unused vacation time may not be
carried from one calendar year to another calendar year.
8. Non-Disclosure of Confidential Information. The Employee
acknowledges that in and 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 such matters as the Company's patents, copyrights,
proprietary information, trade secrets, systems, procedures,
manuals, confidential reports, and lists of customers (which are
deemed for all purposes confidential and proprietary), as well as
the nature and type of services rendered by the Company, the
equipment and methods used and preferred by the Company's
customers, and the fees paid by them. As a material inducement
to the Company to enter into this Agreement and to pay to
Employee the compensation stated in Section 4, Employee covenants
and agrees that he shall not, at any time during or following the
term of his employment, directly or indirectly divulge or
disclose for any purpose whatsoever any confidential information
that has been obtained by, or disclosed to, him as a result of
his employment by the Company. 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 the services of
Employee, 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 to 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. In the event the
Employee ceases to be employed by the Company because the
Employee's work location for the Company is moved more than 100
miles from its present location, the preceding sentence shall not
apply to the Employee, provided, however, that in the event the
Employee ceases to be employed by the Company because the
Employee's work location for the Company is moved more than 100
miles from its present location, the Employee does not take a
position or otherwise compete with the Company at a location
which is also more than 100 miles from the Employee's current
work location. For purposes of this Section 9:
(i) the term "compete" means engaging in the design, development
and/or sale of an electronic patient record system similar to the
Company's ChartMaxx product or engaging in the design,
development and/or sale of a document archival system similar to
the Company's OptiMaxx product (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;
(ii) the term "affiliate" means any legal entity that directly
or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the Company; and
(iii) 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 two (2) years 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, employers, employees, and/or any and
all persons acting directly 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 upon the occurrence of any one or more of the
following events:
(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 policy maintained by the
Company for a period of three (3) consecutive months, or (3) has
been found to be disabled pursuant to 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 three (3)
months. The Disability Determination shall be based on the
written opinion of the physician regularly attending the
Employee. 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 advance written notice to
the other party.
(d) By mutual agreement of the Employee and the Company.
(e) 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).
(f) By the Company for Just Cause. For purposes of this
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 it 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, then the Company and the Employee shall enter
immediately into binding arbitration pursuant to 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 or 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 hereinafter
set forth following the Employee's signature, 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 benefit of
the parties hereto and their 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 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 Employee have duly executed
this Agreement as of the day and year first above written.
MEDPLUS, INC., Company: Xxxx X. Xxxxxxxx,
Employee:
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx, President Xxxx X. Xxxxxxxx
Address for Notice Purposes: Address for Notice Purposes:
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000 722 Miamiheights Court
Cincinnati, OH 45249 Xxxxxxxx, XX 00000
SCHEDULE A
INVENTION AND NON-DISCLOSURE AGREEMENT
This Agreement made and entered into effective as of the 1st day
of February, 2000 by and between MedPlus, Inc., an Ohio
corporation (hereinafter called the "Company," which term
includes
any parent or subsidiary corporation as defined in Section 425 of
the Internal Revenue Code), and Xxxx X. Xxxxxxxx (hereinafter
called "Employee").
In consideration of the employment or continued employment of
Employee by the Company and for other good and valuable
consideration, the parties hereto agree as follows:
1. Disclosure of Inventions to Employer. For the purpose of
this
Agreement, the word "invention" shall include, but not be limited
to, the following: any discovery, idea, device, process, design,
development, improvement, conception, concept, application,
technique, or invention whether patentable or not, and whether
reduced to practice or not; provided, however, that any invention
as so defined, conceived or made by Employee after termination of
employment with the Company, shall not be deemed to be within
this
Agreement if it is not within the scope of the Company's
business,
research, and investigations, or resulting from or suggested by
any of the work Employee has performed or may perform for the
Company. Employee will forthwith communicate to the President of
the Company (or such other individual as the President may
designate from time to time) a full and complete disclosure of
each and every invention conceived or made by Employee whether
solely or jointly with others (a) while in the employ of the
Company, whether or not while actually engaged in the Company's
affairs, and (b) within two years subsequent to termination of
the
employment for any reason.
2. Assignment of Inventions. Employee agrees to assign and
transfer to the Company, without any separate remuneration or
compensation other than the wages or salary received or
compensation paid to Employee from time to time in the course of
his employment by the Company, his entire right, title, and
interest in and to all inventions conceived or made by Employee,
together with all United States and foreign patent rights and any
other legal protection in and with respect to any and all such
inventions, (a) while in the employ of the Company, whether or
not
while Employee is actually engaged in the Company's affairs, or
(b) within two years subsequent thereto and as a direct or
indirect result of such employment. Upon request by the Company,
Employee agrees to execute, and deliver all appropriate patent
applications for securing all United States and foreign patents
on
all such inventions, and to do, execute, and deliver any and all
acts and instruments that may be necessary or proper to vest all
such inventions and patents in the Company or its designee, and
to
enable the Company or its designee to obtain all such letters
patent. Employee agrees to render to the Company or its designee
all such assistance as may be required in the prosecution of all
such patent applications and applications for the reissue of such
patents and in the prosecution or defense of all interferences
which may be declared involving any of said patent applications
or
patents. Employee further agrees not to contest the validity of
any patent, United States or foreign, which is issued to the
Company or its designee, on which Employee made any contribution,
or in which Employee participated in any way, and not to assist
any other party in any way in contesting the validity of any such
patent. Employee further agrees that the obligations and
undertakings stated in this Section 2 shall continue beyond the
termination of his employment by the Company, but if Employee
shall be called upon to render such assistance after the
termination of his employment, Employee shall be entitled to a
fair and reasonable per diem fee in addition to reimbursement of
any expenses incurred at the request of the Company.
3. Prior Inventions. As a matter of record, Employee may
include
a complete list of inventions made by him prior to the date of
employment by the Company as an appendix to this Agreement. Only
those inventions so listed shall be deemed to be excluded from
the
terms and conditions of this Agreement.
4. Unauthorized Disclosure. Except in connection with regularly
assigned duties for the Company, Employee agrees that he will
not,
without prior written approval of the President (or such other
person as the president may designate from time to time), divulge
or disclose to anyone outside of the Company, whether by private
communication or by public address or publication, or otherwise,
any invention or any specification, technical or engineering
data,
or report, or any other information relating to the business or
affairs of the Company, and will not during his employment by the
Company or at any time thereafter disclose or use for his own
benefit such information or any trade secrets or confidential
information pertaining to any of the business of the Company or
any of its clients, customers, consultants, licensees, or
affiliates, whether or not such information or trade secrets were
acquired while Employee was engaged in the Company's affairs and
regardless of by whom such information or trade secrets were
generated, either by the Company or by the Employee or others in
the employ of the Company. All copies of any such information,
however and wherever produced, shall be and remain the sole
property of the Company and shall not be removed from the
premises
or custody of the Company without prior written consent or
authorization of the President of the Company (or such other
person as the President may designate from time to time).
5. Remedies for Breach. Employee expressly recognizes that any
breach of this Agreement by him is likely to result in
irreparable
injury to the Company and agrees that the Company shall be
entitled, if it so elects, to institute and prosecute proceedings
in any court of competent jurisdiction, either in law or in
equity, to obtain damages for any breach of this Agreement, or to
enforce the specific performance of this Agreement by Employee,
or
to enjoin Employee from activities in violation of this
Agreement.
6. Modification. This instrument contains the entire Agreement
of the parties with respect to the subject matter contained
herein
and may be altered, amended, or superseded only by an agreement
in
writing, signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
No action or course of conduct shall constitute a waiver of any
of
the terms and conditions of this Agreement, unless such waiver is
specified in writing, and then only to the extent so specified.
A
waiver of any of the terms and conditions of this Agreement on
one
occasion shall not constitute a waiver of the other terms and
conditions of this Agreement, or of such terms and conditions on
any other occasion.
7. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if mailed to
the party to whom such notice is given at the address of such
party hereinafter set forth or at such other address as such
party
may provide in writing from time to time. Any such notice mailed
to such address shall be effective when deposited in the United
States mail, duly addressed and with first class postage prepaid.
Such notice may, but need not, be by certified mail, return
receipt requested.
8. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of Employee, without regard for the duration
of his employment by the Company or the reasons for the cessation
of such employment, and upon the administrators, executors,
heirs,
and assigns of Employee and shall be binding upon and shall inure
to the benefit of the successors and assigns of the Company, its
subsidiaries, and affiliates.
9. Governing Law. The validity, interpretation and performance
of this Agreement shall be governed and construed by the laws of
Ohio.
10. Severability. The invalidity or unenforceability of any
provision in this Agreement shall not in any way affect the
validity or 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.
11. References to Gender and Number Terms. In construing this
Agreement, feminine or neuter pronouns shall be substituted for
those masculine in form and visa versa, and plural terms shall be
substituted for singular and singular for plural in any place in
which the context requires.
12. Headings. The section numbers and 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 date and year first above
written.
MEDPLUS, INC., Company: Xxxx X. Xxxxxxxx,
Employee:
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx, President Xxxx X. Xxxxxxxx
Address for Notice Purposes: Address for Notice Purposes:
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000 000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
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