EXHIBIT 10.11
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of this 3rd
day of November, 1995, by and between ENTERPRISE SYSTEMS, INC., an Illinois
corporation ("Corporation") and Xxxxx X. Xxx ("Associate").
WITNESSETH:
WHEREAS, the Corporation is an Illinois corporation that specializes in the
design and development of computer software systems; and
WHEREAS, the Associate has extensive experience in the areas of financial
management and control; and
WHEREAS, the Corporation desires to retain the services of Associate and
Associate is willing to be employed by the Corporation;
NOW, THEREFORE, in consideration of the premises and the covenants herein
contained and other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged;
IT IS COVENANTED AND AGREED by and between the parties herein as follows:
SECTION 1. ESTABLISHMENT OF EMPLOYMENT. The Corporation hereby employs
Associate and Associate hereby agrees to remain in the employ of Corporation for
the duration of the term of his employment hereunder, as Senior Vice President,
Finance (or in such other positions, titles and duties assigned to him that are
consistent with a management role) and to perform such duties and services as
shall be assigned to him from time to time by the Corporation's Chief Financial
Officer. The Associate shall devote his best efforts and entire working time to
the interests of the Corporation and will perform his executive duties
faithfully and efficiently subject to the general direction of the Chief
Financial Officer; provided, that Associate shall be entitled to devote time to
personal investments and professional activities, to the extent such activities
do not unduly interfere with his duties hereunder;
SECTION 2. TERM OF EMPLOYMENT. The term of Associate's employment hereunder
shall be automatically extended from year to year, all subject however, to
termination by the Corporation pursuant to SECTION 9 of this Agreement.
Associate shall have the right to terminate upon 30 days written notice by
Associate to the Corporation.
SECTION 3. COMPENSATION. For all services rendered by the Associate under
this Agreement, the Corporation shall pay the Associate a basic salary at the
rate of no less than $105,000 per annum payable in semi-monthly installments.
The basic salary shall be reviewed by the Chief Financial Officer of the
Corporation a minimum of once per year. The Associate also shall be eligible to
participate in any Associate stock ownership, profit
sharing, pension, retirement or other plan maintained from time to time by the
Corporation for the benefit of all Associates generally of the Corporation. The
Corporation shall at all times during the term hereof, at its expense, maintain
and provide the Associate a life insurance policy equal to two times the
Associate's annual salary, to a maximum of $300,000 payable in the event of
death of the Associate to the Associate's designated beneficiary. If the
corporation owns the life insurance policy providing the benefit set forth in
this agreement, it agrees to transfer the policy to Associate at termination of
his employment.
SECTION 4. VACATION. The Associate will be entitled to three (3) weeks paid
vacation during the initial term hereof. Thereafter, Associate shall be entitled
to vacation as set forth in the Corporation's general vacation policy for other
Associates, as amended from time to time, except that in no event shall
Associate be entitled to less than three (3) weeks vacation. Attendance at
professional meetings shall not be treated as vacation time. Additional vacation
time may be taken without pay.
SECTION 5. DISABILITY. Associate will be provided with Short Term Disability
as specified by the policy maintained by the Corporation for the benefit of
Associates generally of the Corporation. In addition, Associate shall be
eligible for and the Corporation shall obtain on his behalf long term disability
insurance effective on the first day of the month following the date Associate
has worked full time for the Corporation for thirty (30) consecutive days. The
benefit under the long term disability insurance shall be sixty percent (60%) of
the Associate's basic monthly earnings up to a maximum benefit of $12,500 per
month.
SECTION 6. PROHIBITION AGAINST ASSIGNMENT. The Associate agrees on behalf of
himself or of his executors and administrators, heirs, legatees, distributees,
and any other person or persons claiming any benefits hereunder by virtue of
this Agreement, that this Agreement and the rights, interests and benefit
hereunder shall not be assigned, transferred, pledged or hypothecated in any way
by Associate or any executor, administrator, heir, legatee, distributee or other
person claiming under Associate by virtue of this Agreement and shall not be
subject to execution, attachment or similar process. Any attempt to assign,
transfer, pledge, hypothecate or otherwise dispose of this Agreement or of any
rights, interests and benefits contrary to the foregoing provisions, or the levy
of any attachment or similar process thereupon shall be null and void and
without effect.
SECTION 7. NOTICE. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein shall be given in
writing to the other party, with the receiving party signing and returning a
written verification of receipt.
SECTION 8. PROTECTIVE COVENANTS. The Associate acknowledges and agrees that
solely by virtue of his employment by, and relationship with, the Employer, he
will acquire "Confidential Information," as hereinafter defined, as well as
special knowledge of the Employer's relationships with its customers and
business brokers, and that, but for his association with the Employer, the
Associate will not have access to said Confidential Information or knowledge of
said relationships. The Associate further acknowledges and agrees (i) that the
Employer has long term, near-permanent relationships with its customers
2
and business brokers, and that those relationships were developed at great
expense and difficulty to the Employer over several years of close and
continuing involvement; (ii) that the Employer's relationships with its
customers and business brokers are and will continue to be valuable, special and
unique assets of the Employer and that the identity of its customers and
business brokers is kept under tight security with the Employer and cannot be
readily ascertained from publicly available materials available to the
Employer's competitors; and (iii) that the Employer has the following
protectable interests that are critical to its competitive advantage in the
industry and would be of demonstrable value in the hands of a competitor:
software designs, including but not limited to designs relating to health care
materials management, health care operating room management, health care patient
cost accounting, health care capital asset management, and health care
centralized patient scheduling; plans; processes and protocols; formulae; and
concepts, ideas and other matters not known to the general public. In return for
the consideration, the receipt and sufficiency of which are hereby acknowledged,
and as a condition precedent to the Employer entering into this Agreement, and
as an inducement to the Employer to do so, the Associate hereby represents,
warrants, and covenants as follows:
A. The Associate has executed and delivered this Agreement as his free
voluntary act, after having determined that the provisions contained herein
are of material benefit to him, and that the duties and obligations imposed
on him hereunder are fair and reasonable and will not prevent him from
earning a comparable livelihood following the termination of his employment
with the Employer;
B. The Associate has read and fully understands the terms and conditions
set forth herein, has had time to reflect on and consider the benefits and
consequences of entering into this Agreement, and has had the opportunity
to review the terms hereof with an attorney or other representative, if he
so chooses;
C. The execution and delivery of this Agreement by the Associate does not
conflict with, or result in a breach of or constitute a default under, any
agreement or contract, whether oral or written, to which the Associate may
be bound;
D. The Associate agrees that, during the time of his employment and for a
period of one (1) year after termination of the Associate's employment
hereunder for any reason whatsoever or for no reason, whether voluntary or
involuntary, the Associate will not, except on behalf of Employer:
(1) directly or indirectly, contact, solicit or direct any person,
firm, or Corporation to contact or solicit any of the Employer's
customers, prospective customers, or business brokers (as hereinafter
defined) for the purpose of selling or attempting to sell, any
products and/or services that are the same as or similar to the
products and services provided by the Employer to its customers during
the term hereof. In addition, the Associate will not disclose the
identity of any such business brokers, customers, or prospective
customers, or any part thereof, to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever, and
(2) directly or indirectly, whether as an investor (excluding
investments representing less than five percent (5%) of the common
stock of a public company), lender, owner, stockholder, officer,
director, consultant, employee, agent, salesperson or in any other
capacity, whether part-time or full-time, become associated with any
business involved in the design, manufacture, marketing, or servicing
of products then constituting ten percent (10%) or more of the annual
sales of the Employer; and
(3) solicit or accept if offered to him, with or without
solicitation, on his own behalf or on behalf of any other person, the
services of any person who is an associate of the Employer, nor
solicit any of the Employer's associates to terminate employment with
the Employer; and
(4) act as a consultant, advisor, officer, manager, agent, director,
partner, independent contractor, owner, or employee for or on behalf
of any of the Employer's business brokers, customers, or prospective
customers (as hereinafter defined), with respect to or in any way with
regard to any aspect of the Employer's business and/or any other
business activities in which Employer engages during the term hereof.
E. The Associate acknowledges and agrees that the scope described above
is necessary and reasonable in order to protect the Employer in the conduct
of its business and that, if the Associate becomes employed by another
employer, he shall be required to disclose the existence of this Paragraph
8 to such employer.
F. For purposes of this Paragraph 8, "customer" shall be defined as any
person, firm, or entity that purchased any type of product and/or service
from Employer or is or was doing business with the Employer or the
Associate within the twelve (12) month period immediately preceding
termination of the Associate's employment. For purposes of this Paragraph
8, "prospective customer" shall be defined as any person, firm, or entity
contracted or solicited by the Employer or the Associate (whether directly
or indirectly) or who contacted the Employer or the Associate (whether
directly or indirectly) within the twelve (12) month period immediately
preceding termination of the Associate's employment for the purpose of
having such persons, firms, or entities become a customer of the Employer.
For purposes of this Paragraph 8, "business broker" shall be defined as any
person, firm, or entity who is or was doing business with the Employer or
the Associate who was contacted or solicited by the Employer or the
Associate (whether directly or indirectly) or who contacted or solicited
the Employer or the Associate (whether directly or indirectly) within the
twelve (12) month period immediately preceding termination of the
Associate's employment.
4
G. The Associate agrees that both during his employment and thereafter
the Associate will not, for any reason whatsoever, use for himself or
disclose to any person not employed by the Employer any "Confidential
Information" of the Employer acquired by the Associate during his
relationship with the Employer, both prior to and during the term of this
Agreement. The Associate further agrees to use Confidential Information
solely for the purpose of performing duties with the Employer and further
agrees not to use Confidential Information for his own private use or
commercial purposes or in any way detrimental to the Employer. The
Associate agrees that "Confidential Information" includes but is not
limited to: (a) any financial, business, planning, software, operations,
services, potential services, products, potential products, designs,
technical information and/or know-how, formulas, production, purchasing,
marketing, sales, personnel, customer, broker, supplier, or other
information of the Employer; (b) any papers, data, records, processes,
methods, techniques, systems, models, samples, devices, equipment,
compilations, invoices, customer lists, or documents of the Employer; (c)
any confidential information or trade secrets of any third party provided
to the Employer in confidence or subject to other use or disclosure
restrictions or limitations; and (d) any other information, written, oral,
or electronic, whether existing now or at some time in the future, whether
pertaining to current or future developments, and whether previously
accessed during the Associate's tenure with the Employer or to be accessed
during his future employment with the Employer, which pertains to the
Employer's affairs or interests or with whom or how the Employer does
business. The Employer acknowledges and agrees that Confidential
Information does not include (i) information properly in the public domain,
or (ii) information in the Associate's possession prior to the date of his
original employment with the Employer.
H. During and after the term of employment hereunder, the Associate will
not remove from the Employer's premises any documents, records, files,
notebooks, correspondence, computer printouts, computer programs, computer
software, price lists, microfilm, or other similar documents containing
Confidential Information, including copies thereof, whether prepared by him
or others, except as his duty shall require, and in such cases, will
promptly return such items to the Employer. Upon termination of his
employment with the Employer, all such items including summaries or copies
thereof, then in the Associate's possession, shall be returned to the
Employer immediately. The Associate agrees to return of such items, which
shall be a requirement in order for the Associate to receive, at the time
of such termination, or any time thereafter, any compensation due him
pursuant to any paragraphs hereunder or otherwise.
I. The Associate recognizes and agrees that all ideas, inventions,
enhancements, plans, writings, and other developments or improvements (the
"Inventions") conceived by the Associate, alone or with others, during the
term of his employment, whether or not during working hours, that are
within the scope of the Employer's business operations or that relate to
any of the Employer's work or projects, are the sole and exclusive property
of the Employer. The Associate further agrees that (a) he
5
will promptly disclose all Inventions to the Employer and hereby assigns to
the Employer all present and future rights he has or may have in those
Inventions, including without limitation those relating to patent,
copyright, trademark or trade secrets; and (b) all of the Inventions
eligible under the copyright laws are "work made for hire." At the request
of and without charge to the Employer, the Associate will do all things
deemed by the Employer to be reasonably necessary to perfect title to the
Inventions in the Employer and to assist in obtaining for the Employer such
patents, copyrights or other protection as may be provided under law and
desired by the Employer, including but not limited to executing and signing
any and all relevant applications, assignments or other instruments.
Notwithstanding the foregoing, pursuant to the Employee Patent Act,
Illinois Public Act 83-493, the Employer hereby notifies the Associate that
the provisions of this Paragraph 8 shall not apply to any Inventions for
which no equipment, supplies, facility or trade secret information of the
Employer was used and which were developed entirely on the Associate's own
time, unless (a) the Invention relates (i) to the business of the Employer,
or (ii) to actual or demonstrably anticipated research or development of
the Employer, or (b) the Invention results from any work performed by the
Associate for the Employer.
J. The Associate acknowledges and agrees that all customer lists,
supplier lists, and customer and supplier information, including, without
limitation, addresses and telephone numbers, are and shall remain the
exclusive property of the Employer, regardless of whether such information
was developed, purchased, acquired, or otherwise obtained by the Employer
or the Associate. The Associate agrees to furnish to the Employer on demand
at any time during the term of this Agreement, and upon termination of this
Agreement, his complete list of the correct names and places of business
and telephone numbers of all of its customers served by him and located
within any and or all of the territories to which he has been assigned,
including all copies thereof wherever located. The Associate further agrees
to immediately notify the Employer of the name and address of any new
customer, and report all changes of location of old customers, so that upon
the termination of this Agreement, the Employer will have a complete list
of the correct names and addresses of all of its customers with which the
Associate has had dealings. The Associate also agrees to furnish to the
Employer on demand at any time during the term of this Agreement, and upon
the termination of this Agreement, any other records, notes, computer
printouts, computer programs, computer software, price lists, microfilm, or
any other documents related to the Employer's business, including originals
and copies thereof; and
K. It is agreed that any breach or anticipated or threatened breach of
any of the Associate's covenants contained in this Paragraph 8 will result
in irreparable harm and continuing damages to the Employer and its business
and that the Employer's remedy at law for any such breach or anticipated or
threatened breach will be inadequate and, accordingly, in addition to any
and all other remedies that may be available to the Employer at law or in
equity in such event, any court of competent jurisdiction may issue a
decree of specific performance or issue a temporary and permanent
injunction, without providing special damages or irreparable injury,
6
enjoining and restricting the breach, or threatened breach, of any
such covenant, including, but not limited to, any injunction
restraining the Associate from disclosing, in whole or in part, any
Confidential Information. The Associate acknowledges the truthfulness
of all factual statements in this Agreement and agrees that he is
estopped from and will not make any factual statement in any
proceeding that is contrary to this Agreement or any part thereof. The
Associate further agrees to pay all of the Employer's costs and
expenses, including reasonable attorneys' fees and accountants' fees,
incurred in enforcing such covenants.
SECTION 9. TERMINATION. The Corporation shall have the right to discharge
Associate at any time. Unless otherwise stated under SECTION 2 of this
Agreement, or as defined hereafter:
a) The Corporation shall have the right to discharge Associate and to
cancel its obligations under this Agreement at any time upon written
notice to Associate if any of the following shall occur:
i) Associate commits significant fraud or gross misconduct which
arises in any manner out of his duties and responsibilities as an
officer or Associate of the Corporation.
b) In the event that Associate dies during the term of his Agreement,
the date of death shall constitute the date of termination.
c) In the event the Associate becomes disabled during the period of
this Agreement, the date of disability shall constitute the date of
termination. For the purposes of his Agreement, disability shall be
defined as occurring at the time at which the Associate has been
unable to be actively employed at work for any twelve (12) week period
within a six (6) month period and qualifies for the Corporation's long
term disability insurance. Actively at work means Associate is able to
perform all material and substantial duties of regular work while
working the usual number of hours at the normal place of business, or
other places of business as directed by the Corporation.
If Associate's service with the Corporation shall be terminated for any reason
other than as set forth in Subsections 9a), b) or c) above or in the event that
the Associate should voluntarily retire, including without limitation any
termination without cause, Associate shall continue to be paid and provided the
basic salary and insurance (as described in Section 3 hereof), as in effect on
the date of termination, in accordance with the following terms:
Twelve (12) months of severance pay will be given.
SECTION 10. GOVERNING LAW. This Agreement shall be subject to and governed by
the laws of the state of Illinois, irrespective of the fact that Associate may
become a resident of a different state.
7
SECTION 11. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Corporation and Associate and their respective heirs, legal
representatives, executors, administrators, successors and assigns.
SECTION 12. ENTIRE AGREEMENT. This Associate, and the stock option agreement
between you and the Corporation, collectively constitute the entire agreement
between the parties and contains all of the agreements between the parties with
respect to the subject matter hereof, and supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter hereof. No change or modification of this Agreement shall
be valid unless the same be in writing and signed by the Associate and the
Corporation. No waiver of any provision of this Agreement shall be valid unless
in writing and signed by the person or party to be charged.
SECTION 13. SEVERABILITY. If any portion or portions of this Agreement shall
be for any reason invalid or unenforceable, the remaining portion or portions
shall nevertheless be valid, enforceable and carried into effect, unless to do
so would clearly violate the present legal and valid intention of the parties
hereto.
SECTION 14. HEADINGS. The headings in this Agreement are inserted for
convenience only and are not to be considered in construction of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
and sealed the day and year first above written.
CORPORATION ENTERPRISE ASSOCIATE:
SYSTEMS, INC.:
/s/ Xxxx X. Xxxxxxx /s/ Xxxxx X. Xxx
By: _______________________________ By: _____________________________________
Xxxxx X. Xxxxxxx Xxxxx X. Xxx
Chief Executive Officer Vice President, Finance
1-11-96 1-7-96
Date: _____________________________ Date: ___________________________________
8
