EXHIBIT 10.25
LETTER AGREEMENT OF EMPLOYMENT
INNOSERV TECHNOLOGIES, INC.
PERSONAL & CONFIDENTIAL
December 8, 1995
Mr. Michael G. Puls
8595 Calumet Way
Cincinnati, OH 45249
RE: OFFER OF EMPLOYMENT
Dear Mike:
InnoServ Technologies, Inc.-Registered Trademark- ("The Company") is pleased
to extend to you an offer of employment as set forth in this letter. In
accordance with the proposed terms of employment, you will be named President
and Chief Executive Officer of the Company and its subsidiaries, reporting to
the Board of Directors, with all powers and duties consistent with these titles.
You will also become a member of the Board of Directors of the Company on the
day you begin employment.
Your annual base salary will be $200,000 with the opportunity for annual
merit increases with the first salary review occurring on or about July 1, 1996.
You will be eligible for an annual bonus based on your performance against
established objectives up to a maximum of 50% of your base salary.
You will also receive a grant of options to purchase 150,000 shares of the
Company's common stock pursuant to the Company's Stock Incentive Plan. The stock
options will have an exercise price equal to the fair market value of the common
stock as defined in the Company's Stock Incentive Plan on the date you become an
employee of the Company and a term of ten years, and one-third of the stock
options will vest on an annual basis so that after three years of employment the
options will be fully vested. As you are aware, there are stock options
available for grant to key employees in the discretion of the Company's
Compensation Committee as part of an overall management group incentive program.
Upon employment with the Company you will be eligible to participate in the
Company's medical and dental insurance plans which are available to other
officers and employees of the Company. You will be entitled to four weeks of
paid vacation per year.
If your employment is terminated by the Company for any reason other than
for cause (which shall mean for all purposes herein fraud, dishonesty or willful
misconduct), you will receive a severance payment by the continuation of your
then current monthly salary (less appropriate withholding amounts) for 12 months
following your separation. In addition, the Company will pay for your
participation in its medical and insurance plans for 12 months following your
separation. Payment of the severance benefit is conditioned upon your providing
to the Company at the time of your separation a written release of any and all
claims against the Company and your agreement not to compete with the Company or
to hire any of its employees for a period of two years following your separation
from the Company.
If a Change of Control (as defined below) occurs, all or your then unvested
stock options will vest immediately. Furthermore, if within six months following
a Change of Control, your employment is terminated without cause, you will also
receive a severance payment as provided for above plus a one-
Mr. Michael G. Puls
December 8, 1995
Page 2
time payment equivalent to your prior year's bonus. If an employment termination
as a result of a Change of Control occurs prior to your receiving a full year's
bonus, your bonus for the purposes of the prior sentence shall be assumed to be
50% of your then base salary. Such payments shall be subject to the same
conditions as set forth in the preceding paragraph.
For purposes of the preceding paragraph a "Change of Control" shall be
deemed to have occurred if (x) any "person" or "group" of "persons" (as the
terms "person" and "group" are used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934 and the rules and regulations thereunder) is
or becomes, after the date of your employment by the Company, the beneficial
owner, directly or indirectly, of the securities of the Company representing 50%
of the combined voting power of the then outstanding voting securities of the
Company (whether by purchase or acquisition of such securities or by agreement
to act in concert with respect to the voting of such securities or otherwise);
(y) all or substantially all of the assets and/or business of the Company is
sold, transferred or otherwise disposed of to a third party; or (z) a majority
of the Board of Directors of the Company shall be comprised of persons who were
not elected to such offices as part of the "Company nominated slate" of
directors (i.e., the slate of nominees proposed by the Board of Directors in
office immediately prior to the election). Notwithstanding the foregoing, there
shall be excluded from the definition of "Change of Control" any direct or
indirect beneficial ownership change resulting in 50% or more of the combined
voting power of the then outstanding securities of the Company being
beneficially owned individually, jointly or as a group by Dudley A. Rauch,
Samuel Salen, M.D., Donald G. Moehering, Michael M. Sachs, MEDIQ Incorporated or
the trust created by agreement dated November 18, 1983 by Bernard B. Rotko as
grantor (the "Rotko Trust") or any of affiliates, personal representatives,
heirs, testamentary trusts or donees who are members of their family or any of
them.
In connection with your relocation to the Dallas area as soon as possible
after commencing employment with the Company, the Company will pay your moving
expenses to relocate you and your family from Cincinnati to Dallas and will pay
you $100,000, less the aggregate amount of the moving expenses paid by the
Company as provided above. This payment (the "Relocation Payment") will be made
in two installments, $50,000 on the date you commence employment with the
Company and the balance on March 15, 1996. In addition, the Company will make
you a $100,000 loan (the "Relocation Loan") for up to one year in order to
initially fund the down payment on the purchase of a residence in the Dallas
area. The loan will be secured by a second lien on the residence and will bear
interest at the same rate as the first mortgage you obtain from a commercial
lender in connection with the purchase of the residence. Interest on the loan
will be payable monthly and the full amount of the principal and accrued but
unpaid interest will be due and payable on the first anniversary of the loan. In
the event that the loan is not paid in full when due, any subsequent bonus
payments from the Company to which you would otherwise be entitled will be used
by the Company to repay the principal and accrued interest then outstanding on
the loan.
If during the first year of your employment, you voluntarily terminate your
employment or are terminated by the Company for cause, you shall repay to the
Company the Relocation Payment and the Relocation Loan shall immediately become
due and payable. If prior to the full repayment of all principal of and interest
on the Relocation Loan, you are terminated by the Company without cause, the
Relocation Loan shall immediately become due and payable and the Company may use
the severance benefits otherwise due you to satisfy the Relocation Loan, if not
separately paid by you.
Your employment will be governed by the legal principles applicable to
employment at will and noting contained in this letter shall constitute a
contract of employment.
Mr. Michael G. Puls
December 8, 1995
Page 3
We look forward to working with you in the future and are confident of the
many contributions which you will make to the success of the Company.
Very truly yours,
INNOSERV TECHNOLOGIES,
INC.-REGISTERED TRADEMARK-
By: /s/ SAMUEL SALEN
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Samuel Salen, M.D.
Agreed to and Acknowledged this
12th day of December, 1995
By: /s/ MICHAEL G. PULS
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Michael G. Puls
SS:sb