Employment Agreement - Medical Software Integrators Inc. and Kurt I. Lawrence
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") by and between Medical Software
Integrators, Inc., a Georgia corporation ("Company") and Kurt I. Lawrence
("Employee") is hereby entered this 26th day of February, 1998, but effective as
of the 1st day of January, 1998 (the "Effective Date").
WHEREAS, Company is engaged or shall be engaged primarily in the business
(the "Business") of developing, marketing, selling, installing, licensing and
servicing computer hardware and software to healthcare providers and
specifically excluding the anesthesiology practice management business
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historically conducted prior to the date hereof by Physician's Equity Resources,
Inc., a Georgia corporation (the "PER Business"), which PER Business Employee
represents does not compete with the Business presently being conducted by
Company;
WHEREAS, pursuant to that certain Stock Purchase Agreement by and among
InfoCure Corporation, a Delaware corporation ("InfoCure"), Kurt I. Lawrence,
Karen A. Lawrence and Philip E. Warenik, dated February 26, 1998, but effective
as of January 1, 1998 (the "Acquisition Agreement"), InfoCure has agreed to
purchase all of the stock of Company (the "Acquisition");
WHEREAS, Employee has been the President of Company and is associated in
the view of its customers and employees with Company's success and the quality
of its services;
WHEREAS, Company has a reasonable, competitive business interest in
protecting the value of the assets of Company which it is acquiring, including,
without limitation, its goodwill, trade secrets and its customer identities;
WHEREAS, it is a condition of closing of the Acquisition (as set forth in
Section 2.4.A.(iv) of the Acquisition Agreement) that Employee enter into this
Agreement; and
WHEREAS, Employee desires to be employed by Company and Company desires to
employ and assure itself of the continued services of Employee on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and in the Acquisition Agreement and the
performance of each, it is hereby agreed as follows:
1. Employment and Duties.
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A. Company shall employ Employee as an executive during the term of
his employment as set forth in this Agreement and Employee hereby accepts such
employment. Employee shall report to the President of Company and shall have
duties and responsibilities as set forth on Exhibit A and/or as may be assigned,
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from time to time, by the President and Board of Directors of Company (the "New
Duties"), provided the New Duties are either reasonably consistent with the
duties previously performed by Employee or consented to by Employee.
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B. Employee shall keep James K. Price, Executive Vice President,
and/or the President of InfoCure timely advised of all significant developments
and opportunities and shall timely consult with Mr. Price and/or the President
of InfoCure on all significant policies and contracts. Employee's powers and
duties are subject to the supervision and instructions of Mr. Price and/or the
President of InfoCure.
C. Employee shall use his best efforts to perform his duties in
accordance with any applicable business plans and budgets and policies in
effect.
D. Employee agrees that he shall at all times faithfully and to the
best of his ability and experience faithfully perform all of the duties that may
be required of him pursuant to the terms of this Agreement. Employee shall
devote his full business time to the performance of his obligations hereunder;
provided, however, Employee shall be entitled to perform services four (4) hours
per week (outside of normal working hours) which four (4) hours shall be
substantially provided for Physician's Equity Resources, Inc., a Georgia
corporation ("PER"), provided the performance of said services for PER do not
materially interfere with the performance by Employee of his duties for Company.
2. Compensation.
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A. Base Salary. During the twenty-four (24) month term of his
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employment (the "Term"), Company shall pay to Employee a base salary ("Base
Salary") of One Hundred Ten Thousand and No/100 Dollars ($110,000.00) per year,
payable in arrears in equal semi-monthly payments. In the event of a Disability,
to the extent payments are received under an employer-sponsored disability
program, the payments hereunder are to be reduced by an amount equal to such
disability payments.
B. Incentive Bonus. During the Term of this Agreement, in addition
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to the Base Salary as provided in Section 2.A. above, Employee shall be eligible
for annual incentive compensation (the "Incentive Bonus") pursuant to a program
established by Company's Board of Directors in its sole and absolute discretion,
from time to time, provided that the Goals (as defined below) of said program
are met by Employee. The Incentive Bonus program and Employee's eligibility to
earn an Incentive Bonus shall be reasonably comparable to other chief executive
and operating officers of other affiliates of InfoCure. The Incentive Bonus
program shall be based upon the achieving of certain revenue and/or profit goals
and/or other goals (the "Goals") of Company and/or of the business unit of
Company for which Employee performs duties. Upon the establishment of the
program and Goals, the parties agree to enter into an agreement setting forth
the Incentive Bonus program and Employee's eligibility to participate in said
program, which agreement shall be attached hereto as Exhibit B and shall
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constitute a part of this Agreement.
C. Employee Benefit Program. Employee shall be eligible to
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participate in all employee benefit programs; including medical and
hospitalization programs; employee stock option and bonus plans generally made
available to employees of Employee's employment status; now or hereafter made
available, subject to the terms and conditions of such programs, including
eligibility. It is understood that Company reserves the right to modify and
rescind any
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program or adopt new programs in its sole discretion. Company may, in its sole
discretion, maintain key man life insurance on the life of Employee and
designate Company as the beneficiary. Employee agrees to execute any documents
necessary to effect such policy. Company shall use commercially reasonable
efforts to provide Employee with medical and hospital coverage. The parties
acknowledge that InfoCure intends to implement uniform employee benefits
throughout InfoCure and its subsidiaries (including Company) at reasonable
costs.
D. Business Allowance. Employee shall be paid a business allowance
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of Five Hundred and No/100 Dollars ($500.00) per month to cover expenses which
are not accounted for and submitted to Company pursuant to Section 2.E. below.
Employee acknowledges that this stipend shall be reported as additional
compensation and taxable to Employee under applicable federal and state income
tax laws.
E. Expenses. In addition to the Business Allowance set forth in
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Section 2.D. above, Employee shall be reimbursed for accountable expenses
reasonably incurred by Employee in the performance of his duties hereunder which
are submitted on expense reports in accordance with the policies of Company then
in effect.
F. Vacation. Employee shall accrue five (5) weeks of vacation during
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each calendar year during the term of this Agreement. Vacation time shall be
taken at such time as not to materially interfere with the Business of Company
and must be pre-approved by Company. Vacation time may not be carried forward
from one (1) calendar year to another.
G. Automobile Allowance. Employee shall be entitled to receive an
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automobile allowance of One Thousand and No/100 Dollars ($1,000.00) per month to
cover Employee's automobile and related operating costs. The automobile
allowance shall be payable semi-monthly.
3. Term. The term of employment of Employee under this Agreement shall
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be for a period of twenty-four (24) consecutive months (the "Term") commencing
on the date hereof and ending on the second (2nd) anniversary thereof, subject
to earlier termination as provided in Section 4. If the employment of Employee
continues thereafter, absent a written agreement, the employment following the
Term shall be at will and the provisions of this Agreement shall be of no force
and effect with respect to any such subsequent period, except for the provisions
of Sections 5. through 10. below.
4. Early Termination.
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A. For Cause.
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(i) Notwithstanding the foregoing, Company may terminate the
employment of Employee "for cause" (as hereinafter defined) at any time upon
written notice effective immediately. The term "for cause" shall mean (1) the
continued failure by Employee substantially to perform his duties with Company
in a reasonably professional manner other than due to a Total and Permanent
Disability or death for a period of thirty (30) days after a written
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demand for substantial performance is delivered to Employee by the Board of
Directors or President of Company, which demand identifies the manner in which
the Board of Directors or President believes Employee has not substantially
performed his duties; (2) the unauthorized dissemination of Confidential
Information (as defined below) of Company or InfoCure or InfoCure's other
subsidiaries; (3) the commission of a felony or any other crime involving moral
turpitude or the pleading of nolo contendere to any such act; (4) the commission
of any act of dishonesty when such act is intended to result or results,
directly or indirectly, in gain or personal enrichment of Employee or any
related person or affiliate of Employee or is intended to cause harm or damage
to Company or InfoCure or any of InfoCure's other subsidiaries; (5) the illegal
use of controlled substances; (6) the use of alcohol so as to have a material
adverse effect on the performance of his duties; (7) the misappropriation or
embezzlement of assets of Company or InfoCure or any of InfoCure's other
subsidiaries; (8) the making of material disparaging remarks regarding Company
or InfoCure or any of InfoCure's other subsidiaries or the products or services
of any such person to suppliers and/or customers of Company, InfoCure or any of
InfoCure's other subsidiaries or (9) the breach of any other material term or
provision of this Agreement to be performed by Employee which has not been cured
within thirty (30) days of receipt of written notice of such breach.
(ii) Upon termination of Employee's employment for cause,
Company shall have no further obligation to pay any compensation to Employee for
periods after the effective date of the termination for cause, except for Base
Salary which accrued as of the termination date. In addition, the right to
exercise any vested stock option shall terminate on the thirtieth (30th) day
following the effective date of the termination of employment for cause.
B. Termination Upon Death or Total and Permanent Disability.
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(i) The employment of Employee shall terminate upon his death
or, ten (10) business days after written notice by Company of termination, upon
or during the continuance of the Total and Permanent Disability (as hereinafter
defined) of Employee.
(ii) Upon termination by reason of death or during Employee's
Total and Permanent Disability, Company shall have no further obligation to pay
any compensation for periods after the effective date of such termination,
except for Base Salary which accrued as of the termination date. The term "Total
and Permanent Disability" means the suffering by Employee of a Disability for a
period (whether or not continuous) in excess of ninety (90) days, unless
extended in writing by Company. A Total and Permanent Disability shall be deemed
to commence upon the expiration of such ninety (90) day period.
(iii) For purposes hereof, the terms "Disabled" or "Disability"
shall mean the suffering by Employee of a physical or mental condition resulting
from bodily injury, disease, or mental disorder which renders Employee incapable
of continuing substantially all of his or her usual and customary duties in an
efficient manner as an employee of Employer, as determined by the Board of
Directors. No Disability shall be deemed to exist until Employee shall be unable
to perform such duties hereunder for seven (7) consecutive days, and after such
Disability continues for seven (7) consecutive days, then the same shall be
deemed to have
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existed from the first (1st) day of such Disability. At the end of any
Disability (other than a Disability that results in a Total and Permanent
Disability as defined below), Employee shall return to work, and this Agreement
shall continue as though such Disability had not occurred.
If Employee desires to return to work at the end of any Disability, but
there is a dispute as to whether Employee is able to perform his or her duties
hereunder or if there is a dispute as to whether Employee is Disabled or has
suffered a Total and Permanent Disability, the issue shall be submitted to a
Board of Arbiters consisting of three (3) persons: one (1) physician who
specializes in the physical or mental condition which resulted in the Disability
(hereinafter referred to as a "Specialist") shall be appointed on behalf of
Employer by the Board of Directors of Employer (with Employee having no vote on
this question); the second (2nd) Specialist shall be appointed by Employee and a
third (3rd) Specialist shall be appointed by the two (2) Specialists so
appointed. If a dispute remains following the completion of this procedure, the
matter shall be determined as set forth in Section 16. below. If a majority of
the Specialists determine that Employee is able to perform his or her duties
hereunder on a full-time basis, Employee shall be permitted to return to work
under the provisions hereof. Employee agrees to submit medical records
requested and to submit to such examination and testing requested by such
physician.
C. Termination by Company Without Cause. In the event Company
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terminates the employment of the Employee, except for cause, prior to the
expiration of term of this Agreement as set forth in Section 3. hereof, Company
shall pay Employee, as its sole and exclusive liability hereunder, an amount
equal to six (6) months of the Employee's then current monthly base salary.
Payment shall be made within five (5) days of such termination.
5. Company Property. All records, designs, patents, business plans,
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financial statements, manuals, memoranda, lists and other property delivered to
or compiled by Employee by or on behalf of Company or its representatives,
vendors or customers which pertain to the Business of Company shall be and
remain the property of Company, as the case may be, and be subject at all times
to its discretion and control.
6. Confidential Information.
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A. Company may disclose to Employee certain Confidential Information
(defined below). Employee acknowledges and agrees that Company has a
reasonable, competitive business interest in the Confidential Information and
the Confidential Information is the sole and exclusive property of Company (or a
third party providing such information to Company) and that Company or such
third party owns all worldwide rights therein under patent, copyright, trade
secret, confidential information, moral right or other property right. Employee
acknowledges and agrees that the disclosure of the Confidential Information to
Employee does not confer upon Employee any license, interest or rights of any
kind in or to the Confidential Information. Employee may use the Confidential
Information solely for the benefit of Company while Employee is employed by
Company. Except in the performance of services for Company, Employee shall hold
in confidence and not reproduce, distribute, transmit, reverse engineer,
decompile, disassemble, or transfer, directly or indirectly, in any form, by any
means, or for any
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purpose, the Confidential Information or any portion thereof. Employee agrees to
return to Company, upon request by Company, the Confidential Information and all
materials relating thereto.
B. Employee acknowledges that his obligations with regard to the
Confidential Information shall remain in effect while Employee is employed by
Company and for a period of two (2) years thereafter.
"Confidential Information" shall mean any confidential or proprietary
information possessed by Company or InfoCure or relating to the Business of
Company (but specifically excluding confidential or proprietary information
related solely to the PER Business and which is not in any way related to the
Owned Software, as defined in the Acquisition Agreement), including, without
limitation, any confidential "know-how", trade secrets, customer lists, details
of client or consultant contracts, current and anticipated customer
requirements, pricing policies, price lists, market studies, business plans,
operational methods, marketing plans or strategies, product development
techniques or plans, computer software programs (including object code and
source code), data and documentation, data base technologies, systems,
structures and architectures, inventions and ideas, past, current and planned
research and development, compilations, devices, methods, techniques, processes,
financial information and data, business acquisition plans and new personnel
acquisition plans; provided, however, that Employee shall not be restricted from
disclosing or using Confidential Information that: (i) is or becomes generally
available to the public other than as a result of an unauthorized disclosure;
(ii) becomes available to Employee in a manner that is not in contravention of
applicable law from a source that is not bound by a confidential relationship
with either InfoCure or Company or by a confidentiality or other similar
agreement; (iii) was known to Employee on a non-confidential basis and not in
contravention of applicable law or a confidentiality or other similar agreement
before its disclosure to Employee by Company, InfoCure or one of Company or
InfoCure's principals or representatives or (iv) is required to be disclosed by
law, court order or other legal process; provided, however, that in the event
disclosure is required by law, Employee shall provide Company with prompt notice
of such requirement so that Company may seek an appropriate protective order
prior to any such required disclosure by Employee. Confidential Information may
include, but not be limited to, future business plans, licensing strategies,
advertising campaigns, information regarding customers, employees and
independent contractors and the terms and conditions of this Agreement.
7. Non-Solicitation.
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A. Customers. During Employee's employment with Company and for a
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period of two (2) years thereafter (the "Restricted Period"), Employee shall
not, on his own behalf or on behalf of any person, firm, partnership,
association, corporation or business organization, entity or enterprise ("Other
Entity"), solicit, contact, call upon, communicate with or attempt to
communicate with any customer of Company, or any representative of any customer
of Company, with a view to providing products and/or services in the Business
provided that the restrictions set forth in this Section 7.A. shall apply only
to customers of Company, or representatives of customers of Company, with which
Employee had contact during
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the two (2) year period immediately preceding termination of his employment with
Company (or shorter period if Employee has not then been engaged by Company for
two (2) years).
B. Employees/Independent Contractors. During the Restricted Period,
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Employee shall not, on his own behalf or on behalf of any Other Entity, recruit
or hire, or attempt to recruit or hire, any employees or independent contractors
of Company who were employed or engaged by Company, as the case may be, during
the one (1) year period prior to the termination of his employment with Company
(or shorter period if Employee has not then been engaged by Company for one (1)
year).
8. Non-Competition. During the Restricted Period, Employee shall not on
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his own behalf or on behalf of any Other Entity, perform the duties and services
Employee performs for Company for any Other Entity in the Business within a one
hundred (100) mile radius of the following location, said location being the
location at which Employee performs services for Company (the "Territory"):
3939 Roswell Road, N.E., Suite 300, Marietta, Georgia 30062.
9. Acknowledgment. The parties hereto agree that: (i) the Restricted
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Period and Territory contained in this Agreement are reasonably necessary for
the protection of InfoCure and Company's legitimate business interests and that
the Territory is the area in which Employee shall perform (or currently perform)
services for Company; (ii) by having access to information concerning employees,
independent contractors and customers of Company, Employee shall obtain a
competitive advantage as to such parties; (iii) Employee's covenants and
agreements contained in this Agreement are reasonably necessary to protect the
interests of Company in whose favor said covenants and agreements are imposed in
light of the nature of Company's Business and Employee's involvement in such
Business; (iv) the restrictions imposed by this Agreement are not greater than
are necessary for the protection of Company in light of the substantial harm
that Company shall suffer should Employee breach any of the provisions of said
covenants or agreements and (v) Employee's covenants and agreements contained in
this Agreement form material consideration for this Agreement, the Acquisition
Agreement and Employee's employment by Company.
10. Remedy for Breach. Employee agrees that the remedies at law of
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Company for any actual or threatened breach by Employee of the covenants
contained in Sections 6. through 8. of this Agreement would be inadequate and
that Company shall be entitled to specific performance of the covenants in such
paragraphs, including entry of an ex parte, temporary restraining order in state
or federal court, preliminary and permanent injunctive relief against activities
in violation of such paragraphs, or both, or other appropriate judicial remedy,
writ or order, in addition to any damages and legal expenses (including
attorney's fees) which Company may be legally entitled to recover. Employee
acknowledges and agrees that the covenants contained in Sections 6. through 8.
of this Agreement shall be construed as agreements independent of any other
provision of this or any other agreement between the parties hereto, and that
the existence of any claim or cause of action by Employee against Company,
whether predicated upon this or any other agreement, shall not constitute a
defense to the enforcement by Company of said covenants.
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11. No Prior Agreements. Employee hereby represents and warrants to
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Company that the execution of this Agreement by Employee and Employee's
employment by Company and the performance of Employee's duties hereunder shall
not violate or be a breach of any agreement with a former employer, client or
any other person or entity.
12. Assignment; Binding Effect. Employee understands that Employee has
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been selected for employment by Company on the basis of Employee's personal
qualifications, experience and skills. Employee agrees, therefore, that
Employee cannot assign all or any portion of Employee's performance under this
Agreement. Subject to the preceding two (2) sentences and the express
provisions of Section 13. below, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns.
13. Complete Agreement. This Agreement is not a promise of future
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employment. Employee has no oral representations, understandings or agreements
with Company or any of its officers, directors or representatives covering the
same subject matter as this Agreement. This Agreement hereby supersedes any
other employment agreements or understandings, written or oral, between Company
and Employee. This written Agreement is the final, complete and exclusive
statement and expression of the agreement between Company and Employee and of
all the terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of Company and Employee, and
no term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term.
14. Notice. Whenever any notice is required hereunder, it shall be given
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in writing addressed as follows:
To Company: Medical Software Integrators, Inc.
c/o InfoCure Corporation
1765 The Exchange
Suite 450
Atlanta, Georgia 30339
Attention: Frederick L. Fine
With a copy to: Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attention: Richard L. Haury, Jr., Esq.
To Employee: Kurt I. Lawrence
4660 Jefferson Township Lane
Marietta, Georgia 30066
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With a copy to: Manko & Hogan
332 Lawrence Street, N.E.
Marietta, Georgia 30060
Attention: J. Stephen Manko, Esq.
James D. Hogan, Jr., Esq.
Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. Mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 14.
15. Severability; Headings. If any portion of this Agreement is held
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invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
Agreement shall be enforced separately and independently of any other agreement
involving the parties hereto. The Section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of the Agreement or of any part hereof.
16. Arbitration. Except as otherwise set forth in Sections 4.B.(iii) and
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6. through 10., any dispute, controversy or claim arising out of, relating to or
in connection with, this Agreement, or the breach, termination or validity
thereof shall be finally settled by arbitration conducted in accordance with
this Section. The arbitration shall be conducted in accordance with the Rules
of the American Arbitration Association (the "AAA") in effect at the time of the
arbitration, except as they may be modified herein or by mutual agreement of the
parties. The seat of the arbitration shall be Atlanta, Georgia, and each party
hereto irrevocably submits to the jurisdiction of the arbitration panel in
Atlanta, Georgia. The arbitration shall be conducted by three (3) arbitrators.
The party initiating arbitration (the "Claimant") shall identify its arbitrator
within twenty (20) days of receipt of the request for arbitration (the
"Request") and shall notify the Claimant of such appointment in writing. If the
Respondent fails to identify an arbitrator within such twenty (20) day period,
the arbitrator named in the Request shall decide the controversy or claim as the
sole arbitrator. Otherwise, the two (2) arbitrators appointed by the parties
shall appoint a third (3rd) arbitrator within twenty (20) days after the
Respondent has notified Claimant of the appointment of the Respondent's
arbitrator. When the third (3rd) arbitrator has accepted the appointment, the
two (2) party-appointed arbitrators shall promptly notify the parties of the
appointment. If the two (2) arbitrators appointed by the parties fail or are
unable to so appoint a third (3rd) arbitrator, then the appointment of the third
(3rd) arbitrator shall be made by the AAA, which shall promptly notify the
parties of the appointment. The third (3rd) arbitrator shall act as chair of
the panel. The arbitration award shall be in writing and shall be final and
binding on the parties. The award may include an award of costs, including
reasonable attorneys' fees and disbursements. Judgment upon the award may be
entered by any court having jurisdiction thereof or having jurisdiction over the
parties or their assets. Notwithstanding the foregoing, the parties may apply
to any court of competent jurisdiction for an ex parte temporary restraining
order, preliminary injunction, or other interim or conservatory
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relief, as necessary, without breach of this Section and without any abridgment
of the powers of the arbitrators.
17. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of Georgia.
18. Counterparts. This Agreement may be executed simultaneously in two
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(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute, but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
Medical Software Integrators, Inc.
By: /s/ James K. Price
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Its: Executive Vice President
EMPLOYEE:
/s/ Kurt I. Lawrence
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Kurt I. Lawrence
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EXHIBIT A
TO EMPLOYMENT AGREEMENT
Duties of Executive
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OVERALL RESPONSIBILITY:
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<PAGE>
EXHIBIT B
TO EMPLOYMENT AGREEMENT
Incentive Bonus
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The Incentive Bonus Program shall be attached hereto once completed by
InfoCure and Company. However, the parties understand and agree that the
Incentive Bonus shall be in the form of cash and shall not exceed Employee's
Base Salary as set forth in Section 2.A. of this Employment Agreement.