Exhibit 10.3 INNOSERV TECHNOLOGIES, INC. BONUS AGREEMENT This Bonus Agreement (this "Agreement") is entered into between InnoServ Technologies, Inc. (the "Company") and Michael G. Puls, President and Chief Executive Officer of the Company (the "Executive"). WITNESSETH: WHEREAS, the Executive is currently employed by the Company in the capacity of President and Chief Executive Officer; and WHEREAS, the board of directors of the Company (the "Board of Directors") has determined that it is in the best interests of the Company and the shareholders of the Company that the Company from time to time investigate strategic alternatives in order to maximize shareholder value; and WHEREAS, the Executive is a member of senior management of the Company and has access to proprietary information pertaining to the business and operations of the Company; and WHEREAS, the Board of Directors has determined that it is in the best interests of the Company to provide an incentive to the Executive to remain in the employ of the Company while the Company is investigating such strategic alternatives; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Company and Executive agree as follows: 1. Subject to paragraph 2 below, if Executive is a full-time employee of the Company in good standing on the closing of a Sale of the Company (as defined in paragraph 3 below), then Executive will be entitled to a one-time bonus of $150,000, less all applicable withholdings (the "Bonus"). The Bonus will be payable in full, in cash on the closing date of such Sale of the Company. 2. Executive will not be eligible for benefits hereunder if he resigns, retires, becomes disabled, fails to return from a leave of absence, dies, or is terminated for cause prior to the close of the Sale of the Company. 3. For purposes of this Agreement, a Sale of the Company shall be deemed to have occurred if the Company disposes of all of its stock or substantially all of its assets to another party, whether by way of merger, transfer of assets or otherwise, for cash or securities, in one or a series of transactions. 4. This Agreement is not and shall not be deemed an employment agreement, and shall not give the Executive the right to be retained in the employment of the Company. 5. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives, and assigns. 6. Neither this Agreement nor any right or interest hereunder shall be assignable by the Executive, his beneficiaries or legal representatives. 7. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable in whole or in part, neither the validity of the remaining part of such provision nor the validity of any other provision of this Agreement shall in any way be affected thereby. In lieu of such invalid, illegal or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such invalid, illegal or unenforceable provision as may be possible and be valid, legal and enforceable. 8. This Agreement shall be governed by Texas law. 9. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof. This Agreement may be modified or amended only by an instrument in writing signed by both parties hereto. 10. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. [SIGNATURES ON THE NEXT PAGE] IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the day and year indicated below. INNOSERV TECHNOLOGIES, INC. Dated: December 20, 1996 By: /s/ Dudley A. Rauch ------------------------ ------------------------------ Name: Dudley A. Rauch ---------------------------- Its: Chairman ----------------------------- EXECUTIVE: Dated: December 20, 1996 /s/ Michael G. Puls ------------------------ --------------------------------- Printed Name: Michael G. Puls --------------------