Exhibit (10)
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of May 27, 1997 , between Shared Medical Systems
Corporation ("Employer" or "Company"), a Delaware corporation having its
principal office at Malvern, PA, and X. Xxxxxxxx Xxxxx, an individual residing
at 00000 Xxxxxx'x Xxxx, Xxxxxxx, Xxxxxxxx 00000 ("Executive").
Executive and Employer agree as follows:
1.0 EMPLOYMENT, COMPENSATION AND BENEFITS.
1.1 Employer hereby provides to Executive, in consideration for
Executive's covenants contained herein, employment,
compensation and benefits as outlined in the letter
attached and incorporated by reference herein ("Letter"),
and Executive hereby accepts such employment, compensation
and benefits, upon the terms and conditions hereinafter set
forth.
1.2 Executive's salary shall remain as described in the Letter
until such time a change is determined by the Company's
chief executive officer ("CEO") in his sole discretion.
Executive's monthly salary (as may be increased from time
to time) is referred to herein as "Base Compensation."
1.3 Executive shall perform such duties as may be assigned from
time to time by Employer, shall devote full time,
attention, and energies to the business of Employer, and
shall faithfully perform his duties in accordance with the
direction of Employer. Executive also agrees to adhere to
all policies of the Employer.
1.4 Executive shall be entitled to participate in all group
life insurance, medical, and other benefit plans, except as
provided herein, established by Employer in accordance with
the applicable terms and conditions of such plans.
1.5 Executive shall be entitled to an annual vacation of four weeks,
and holidays and sick leave as set forth in Employer's policy
manual.
1.6 In addition to the annual salary described in the Letter
and Section 1.2 above, Executive shall be entitled to such
annual bonus or incentive compensation of the Employer as
set forth in the Letter, and as may be approved from time
to time by the CEO in his sole discretion. Such additional
compensation is referred to herein as "Incentive
Compensation."
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1.7 This Agreement shall remain in full force and effect until
Executive's change to a non-Executive level position or
upon Termination of Employment and those post-employment
obligations described in Sections 4.0 and 5.0 shall
continue in full force and effect thereafter.
2.0 DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply.
2.1 "Severance Pay" is a monthly payment made up of three
components: (i) Base Compensation; (ii) the monthly cost of
continued medical insurance coverage under COBRA; and (iii)
a pro rata portion of the maximum amount of Incentive
Compensation, if any, which could have been paid to the
Executive for the year. The right to premium payments does
not expand an Executive's right to medical coverage.
2.2 "Cause" shall mean termination of Executive due to
Executive's (i) dishonest or illegal conduct; (ii) breach
of his obligations under this Agreement; (iii) conduct
contrary to the best interests of Employer; (iv)
insubordination, incompetence, misconduct, poor performance
or neglect of his duties; or (v) willful violation of any
express direction of the CEO.
2.3 "Change in Control" shall mean the acquisition by any
person (other than the Company or any affiliate or
associate of the Company) as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act)
of 40% or more of the combined voting power of the
Company's then outstanding securities, or the approval by
the stockholders of the Company of (i) any merger or
consolidation where stockholders of the Company immediately
prior to the merger or consolidation do not immediately
thereafter hold more than 50% of the combined voting power
of the surviving company's then outstanding securities;
(ii) a liquidation or dissolution of the Company; or (iii)
a sale of all or substantially all of the Company's assets.
2.4 "Termination of Employment" shall mean the termination of
employment of the Executive by the Employer, including
constructive discharge which is defined for this purpose to
mean an act by the Employer regarding Executive's terms or
conditions of employment which would cause a reasonable
person in Executive's position to resign from employment.
3.0 SEVERANCE PAY.
3.1. Notwithstanding any provision in this Agreement, the Company
retains its right to terminate Executive's employment without
Cause. Upon
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Termination of Employment without Cause, Company shall pay to
Executive Severance Pay for a period of eighteen (18) months.
Except as provided in Section 3.2, the payments required to
be made by Employer to Executive pursuant to this Section
3.1 shall be Executive's sole severance benefit in the
event of Executive's discharge without cause. Payment of
such severance benefit is conditioned upon Executive
executing a general release of all claims against the
Company, and Executive's continued adherence to his/her
obligations under Sections 4.0 and 5.0 of this Agreement.
3.2 In the event (a) there is a "Change of Control" of the
Company, and (b) within twenty four (24) months after the
Change in Control (i) the Chief Executive Officer of the
Company immediately prior to the Change in Control is
replaced and (ii) there is a Termination of Employment of
Executive, Employer shall pay to Executive in a lump sum an
amount equal to eighteen (18) months of Severance Pay. Such
payment required to be made by Employer to Executive
pursuant to this Section 3.2 shall be in lieu of those
referred to in Section 3.1 and shall be Executive's sole
severance benefit. Payment of such severance benefit is
conditioned upon Executive executing a general release of
all claims against the Company, and Executive's continued
adherence to his/her obligations under Sections 4.0 and 5.0
of this Agreement. Executive hereby agrees to repay to
Company any severance benefit paid to Executive should
he/she violate his/her obligations under Sections 4.0
and/or 5.0.
3.3 Employer may terminate Executive's employment immediately
at any time for Cause, provided that Employer has given
Executive prior written notice of such Cause and Executive
has failed to cure such Cause within 21 days after receipt
of such notice. In the event of Termination for Cause,
Employer shall not be obligated to make any payments other
than the payment of earned but unpaid salary and benefits.
3.4 If Executive is unable to perform his duties and
responsibilities by reason of a disability as defined under
Company's short term disability plan, Company shall provide
Executive with short term disability for a period of six
(6) months equal to Executive's Base Compensation and a pro
rata portion of the maximum amount of Incentive
Compensation, if any, which could have been paid to
Executive for the year during which Executive first became
disabled. This short term disability benefit shall be
reduced by the amount of payments due Executive for this
time period under any applicable disability benefit
programs, including Social Security disability, workers'
compensation and disability retirement benefits.
3.5 In the event that Executive dies during the term of his
Employment,
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Employer shall pay to his executors or administrators, as
appropriate, for a period of three (3) months, Executive's Base
Compensation and a pro rata portion of the maximum amount of
Incentive Compensation, if any, which could have been paid to
Executive for the year in which he/she died. To the extent
possible, such payments will be non-taxable death benefits under
the Internal Revenue Code.
4.0 CONFIDENTIAL INFORMATION.
4.1 Executive represents and warrants that Executive is free of
any contractual restrictions and restraints in entering
this Agreement, and has not, and will not, in connection
with this employment, divulge any confidential information,
trade secrets, or copyright-protected information of any
prior employer or of any other third party.
4.2 Employer will provide to Executive or Executive will learn,
trade secrets and other proprietary information of Employer
and third parties which are not generally available to the
public. Examples of this information include computer
programs, marketing and development plans, proprietary
product and service offerings data about Employer, customer
and prospect lists and requirements, employee lists,
salaries and benefits, financial information and customer
and vendor data. During Executive's employment and at all
times afterward, Executive shall keep confidential all such
information and material and will not disclose such
information to any person or entity or make any use of this
information, except as required in the performance of
Executive's current employment responsibilities. When
Executive leaves Employer's employment, Executive will
immediately return to Employer all materials containing
such information. Such materials shall, at all times, be
the property of the Employer.
4.3 Employer may seek and obtain injunctive relief against the
breach or threatened breach of Executive's obligations
under this paragraph, in addition to any other legal
remedies which may be available.
5.0 NON-COMPETITION.
5.1 During the term of this Agreement and for eighteen (18) months
following termination of Executive's employment for any reason:
(i) Executive will not, without Employer's prior written
consent, (i) compete with Employer's business
activities or accept similar employment with a
competitor of Employer, or (ii) solicit any customer
or prospect of Employer that Executive or his
subordinates solicited or serviced for Employer, or
(iii) solicit for
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hire other individuals who were Employer's employees
on the date Executive left Employer to also leave
Employer. If Executive's responsibilities for Employer
have a geographic territory, this provision will apply
only within the geographic territory for which
Executive had responsibility during the year before
Executive left Employer; otherwise it will apply where
Employer does or has plans to do business.
(ii) Executive hereby acknowledges that the limitation as
to time and the limitation on the character or nature
placed on his subsequent employment are reasonable and
fair and will not prevent or materially impair his/her
ability to earn a livelihood.
5.2 Employer may seek and obtain injunctive relief against the
breach or threatened breach of Executive's obligations under
this paragraph, in addition to any other legal remedies which
may be available.
6.0 OWNERSHIP OF WORK PRODUCT.
The parties agree that all "Work" (which shall include for purposes of
this Section all ideas, processes, methodologies, software, algorithms,
formulae, notes, outlines, photographs, inventions, improvements, and
other information and work product developed or generated by or on behalf
of Employer during the course of the Executive's employment), shall be
considered "works made for hire" within the meaning of the Copyright Act
of 1976, 17 U.S.C. ss.101 et seq., and that Employer is and shall be the
sole owner of all rights therein, including but not limited to all rights
of copyright. In the event any of the Work is deemed not to be a "work
made for hire," then Executive hereby transfers to Employer, without
further consideration, all right, title, and interest to such Work,
including any and all patents, copyrights, trade secrets and other
proprietary rights related thereto. Executive agrees to promptly execute
and deliver, or cause to be promptly executed and delivered, all documents
and instruments requested by Employer to evidence the foregoing
assignment.
7.0 MISCELLANEOUS.
This Agreement: (i) may not be amended except in a writing executed by
both parties; (ii) shall only be governed by and construed in accordance
with the laws of the State of Delaware; (iii) shall be binding upon and
inure to the benefit of Employer and Executive and their respective
successors and permitted assigns; and (iv) represents the entire Agreement
and understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings of the parties in
connection therewith. If any portion of this Agreement is deemed to be
unenforceable, the balance of this Agreement shall nevertheless continue
in effect and any court may enforce any provision to the
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extent permitted by law, even though the entire provision may not be
enforced. This Agreement shall not be assignable by Executive, and shall
be assignable by Employer only to any person, firm, or corporation which
may become a successor in interest by purchase, merger or otherwise.
IN WITNESS WHEREOF, the undersigned, intended to be legally bound, have duly
executed this Agreement as of the date first above written.
ACCEPTED:
X. Xxxxxxxx Xxxxx Shared Medical Systems Corporation
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/S/X. Xxxxxxxx Xxxxx /S/Xxxxxx X. Xxxxxxx
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(Signature) By (Signature)
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
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