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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
as of the 1st day of June 1999, by and between Per-Se Technologies, Inc., a
Delaware corporation (the "Company") and a wholly-owned subsidiary of Medaphis
Corporation, a Delaware corporation ("Medaphis"), and Philip M. Pead, a
resident of the State of Georgia (the "Employee").
Statement of Background Information
The Company : (a) develops, markets and licenses to hospitals,
integrated healthcare delivery systems, and other healthcare providers and
other end users (collectively "Providers"), (i) strategic, operational and
financial information systems and services and decision support tools for
healthcare providers, (ii) software systems which provide claims and
reimbursement services and electronic claims processing, and (iii) software
applications which assist Providers with automated scheduling and resource
management (the items discussed in Sections (a)(i), (a)(ii) and (a)(iii) of
this paragraph are referred to as "Systems"), which Systems include, but are
not limited to, nurse scheduling and management information systems, operating
room patient scheduling and surgery information systems, enterprise wide
patient scheduling and resource management systems, enterprise-wide employee
scheduling and management information systems and related software interfaces
to other information systems; and (b) provides to Providers installation and
support services related to the Company's Systems (the "Systems Business")(the
Systems Business and any other distinct business segment in which the Company
engages during Employee's employment are collectively referred to herein as the
"Business").
In consideration of the mutual covenants, promises and conditions set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Employment. The Company hereby employs Employee and Employee hereby
accepts such employment upon the terms and conditions set forth in
this Agreement.
2. Duties of Employee. Employee's title will be President of the Company.
Employee agrees to perform and discharge such other duties as may be
assigned to Employee from time to time by the Company to the
reasonable satisfaction of the Company, and such duties will be
consistent with those duties regularly and customarily assigned by the
Company to the position of President and by Medaphis to heads of
operating subsidiaries. Employee also agrees to comply with all of
Medaphis' and the Company's policies, standards and regulations as
promulgated and in effect from time to time, and to follow the
instructions and directives of Employee's superiors within Medaphis.
Employee will devote Employee's full professional and business-related
time, skills and best efforts to such duties and will not, during the
term of this
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Agreement, be engaged (whether or not during normal business hours) in
any other business or professional activity, whether or not such
activity is pursued for gain, profit or other pecuniary advantage,
without the prior written consent of the Chief Executive Officer of
Medaphis, which consent will not be unreasonably withheld. This
Section will not be construed to prevent Employee from (a) investing
personal assets in businesses which do not compete with the Company in
such form or manner that will not require any services on the part of
Employee in the operation or the affairs of the companies in which
such investments are made and in which Employee's participation is
solely that of an investor; (b) purchasing securities in any
corporation whose securities are listed on a national securities
exchange or regularly traded in the over-the-counter market, provided
that Employee at no time owns, directly or indirectly, in excess of
one percent (1%) of the outstanding stock of any class of any such
corporation engaged in a business competitive with that of the
Company; or (c) participating in conferences, preparing and publishing
papers or books or teaching, so long as the Chief Executive Officer of
Medaphis approves such participation, preparation and publication or
teaching prior to Employee's engaging therein.
3. Term. The term of this Agreement will be for a two (2) year period of
time, commencing as of May 1, 1999 and expiring on the second
anniversary thereof subject to earlier termination as provided for in
Section 4 of this Agreement. This Agreement shall be automatically
renewed for successive one (1) year periods at the end of the initial
term, unless either party gives notice to the other of its intent to
terminate this Agreement not less than sixty (60) days prior to the
commencement of any such one (1) year period. In the event such notice
is properly and timely given, this Agreement shall terminate at the
end of the initial term or one (1) year period in which such notice is
given without further payment by or obligation on the part of the
Company.
4. Termination.
(a) Termination by Company for Cause. Notwithstanding anything
contained in Section 3 to the contrary, the Company may terminate this
Agreement and all of its obligations hereunder immediately if any of
the following events occur:
(i) Employee materially breaches any of the terms or
conditions set forth in this Agreement and fails to cure such
breach within ten (10) days after Employee's receipt from the
Company of written notice of such breach (notwithstanding the
foregoing, no cure period shall be applicable to breaches by
Employee of Sections 6, 7 or 8 of this Agreement);
(ii) Employee commits any other act materially detrimental to
the business or reputation of the Company;
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(iii) Employee commits or is convicted of any crime involving
fraud, deceit or moral turpitude; or
(iv) Employee dies or becomes mentally or physically
incapacitated or disabled so as to be unable to perform
Employee's duties under this Agreement. Without limiting the
generality of the foregoing, Employee's inability adequately
to perform services under this Agreement for a period of
sixty (60) consecutive days will be conclusive evidence of
such mental or physical incapacity or disability, unless such
inability adequately to perform services under this Agreement
is pursuant to a mental or physical incapacity or disability
covered by the Family Medical Leave Act, in which case such
sixty (60)-day period shall be extended to a one hundred and
twenty (120)-day period.
(b) Termination by Company Without Cause.
Notwithstanding anything contained in Section 3 to the contrary, the
Company may terminate Employee's employment pursuant to this Agreement
without cause upon at least thirty (30) days' prior written notice to
Employee. In the event Employee's employment with the Company is
terminated by the Company without cause or Employee elects to
terminate voluntarily his employment following the occurrence of
events constituting "Good Reason" for his voluntary termination of
employment (in each case, other than in connection with a Change in
Control in which event the provisions of subsection (c) of this
section 4 will apply, it being understood that the provisions of
subsection (c) of this section and this subsection (b) are mutually
exclusive), the Company shall pay to Employee an amount equal to his
then current salary (not including the right to receive any incentive
bonus payments) multiplied by the greater of (i) the number of months
remaining in the initial or any renewal term of this Agreement, as
applicable or (ii) twelve (12). Such amount shall be paid pursuant to
the Company's normal payroll practices over the period of such
payments. For purposes of this Agreement, "Good Reason" is defined as
(w) a material reduction (greater than 10%) in Employee's annual base
salary; (x) a change in Employee's work location to a work location
more than 50 miles from Employee's existing work location, except for
required travel on the Company's business to an extent consistent with
Employee's then present business travel obligations; (y) an assignment
to any duties inconsistent in any material adverse respect with
Employee's current position, duties or responsibilities, other than an
insubstantial and inadvertent act that is remedied by the Company
promptly after receipt of notice thereof given by Employee; or (z) the
failure by the Company to continue any material benefit or
compensation plan in which Employee is participating unless Employee
is provided with comparable benefits.
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(c) Change in Control. In the event there is a Change in
Control (as defined herein) of the Company or Medaphis and if: (A)
Employee's employment is terminated by the Company without cause or by
Employee for Good Reason within one (1) year following any such Change
in Control; (B) if Employee's employment is terminated by the Company
at the request of or pursuant to an agreement with a third party who
has taken steps reasonably calculated to effect a Change in Control;
or (C) if Employee's employment is terminated by the Company or by
Employee for Good Reason in connection with or in anticipation of a
Change in Control, then Employee will be entitled to receive severance
payments, payable over a two year period, equal in the aggregate to
two times the sum of: (i) Employee's then current annual base salary;
and (ii) the most recent incentive bonus payment received by Employee
prior to the Change in Control. In addition, Employee shall be
entitled to receive monthly for a period of eighteen (18) months
commencing on the date of termination in connection with a Change in
Control an amount equal to the difference between the monthly cost to
Employee of healthcare coverage at the levels at which Employee is
participating on the date of such termination and the monthly cost of
comparable COBRA coverage actually incurred. All amounts payable
pursuant to this Section 4 (c) shall be paid in accordance with the
Company's normal payroll practices. For purposes of this Agreement, a
"Change in Control" of the Company shall be deemed to occur upon any
of the following:
(i) a consolidation or merger of Medaphis or the Company with
or into any other corporation, or any other entity or person,
in the case of the Company, other than Medaphis or a
wholly-owned subsidiary of Medaphis, excluding any
transaction in which the shares of Medaphis common stock or
the Company's common stock, as applicable, outstanding
immediately prior to any such consolidation or merger
represent immediately thereafter more than 50% of the
combined voting power of the resulting entity after the
transaction;
(ii) any corporate reorganization, including an exchange
offer, in which Medaphis or the Company shall not be the
continuing or surviving entity resulting from such
reorganization, excluding any transaction in which the shares
of Medaphis common stock or the Company's common stock
outstanding immediately prior to any such reorganization
represent immediately thereafter more than 50% of the
combined voting power of the resulting entity after the
transaction; or
(iii) the failure for any reason of individuals who
constitute the Incumbent Board to continue to constitute at
least a majority of the Board. For purposes of this Section 4
(d), the term "Board" shall mean the Board of Directors of
Medaphis or the Company, as applicable, and the term
"Incumbent Board" shall mean the members of the Board as of
the date hereof and any person
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becoming a member of the Board hereafter whose election or
nomination is by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of the
directors of Medaphis or the Company, as applicable, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended).
5. Compensation and Benefits.
a) Annual Salary. During the term of this Agreement and for all
services rendered by Employee under this Agreement, the Company will
pay Employee a base salary of Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00) per annum to be paid in accordance with the
Company's regular payroll practices, provided, however, that such
payments shall be made no less frequently than in equal monthly
installments. Such annual salary will be subject to adjustments in the
normal course of business.
b) Incentive Compensation. Employee shall be eligible to
participate in the current Medaphis Incentive Compensation Plan (and
any comparable future incentive compensation plans during the term of
this Agreement) at a participation category of up to Eighty Percent
(80 %) of Employee's base salary, payable at the discretion of the
Board of Directors of the Company.
c) Other Benefits. Employee will be entitled to such fringe
benefits as may be provided from time-to-time by the Company to its
Employees, including, but not limited to, group health insurance, life
and disability insurance, vacation and any other fringe benefits, in
each case as now or hereafter provided by the Company to its
Employees, if and when, and for so long as, Employee meets the
eligibility requirements for such benefits. The Company reserves the
right to change or discontinue any employee benefit plans or programs
now being offered to its employees; provided, however, that all
benefits provided for employees of the same position and status as
Employee will be provided to Employee on an equal basis.
d) Business Expenses. Employee will be reimbursed for all
reasonable expenses incurred in the discharge of Employee's duties
under this Agreement pursuant to the Company's standard reimbursement
policies.
e) Withholding. The Company will deduct and withhold from the
payments made to Employee under this Agreement, state and federal
income taxes, FICA and other amounts normally withheld from
compensation due employees.
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6. Non-Disclosure of Proprietary Information. Employee recognizes and
acknowledges that the Trade Secrets (as defined below) and
Confidential Information (as defined below) of the Company and its
affiliates and all physical embodiments thereof (as they may exist
from time-to-time, collectively, the "Proprietary Information") are
valuable, special and unique assets of the Company's and its
affiliates' businesses. Employee further acknowledges that access to
such Proprietary Information is essential to the performance of
Employee's duties under this Agreement. Therefore, in order to obtain
access to such Proprietary Information, Employee agrees that, except
in connection with performing duties assigned to him by the Company,
Employee shall hold in confidence all Proprietary Information and will
not reproduce, use, distribute, disclose, publish or otherwise
disseminate any Proprietary Information, in whole or in part, and will
take no action causing, or fail to take any action necessary to
prevent causing, any Proprietary Information to lose its character as
Proprietary Information, nor will Employee make use of any such
information for Employee's own purposes or for the benefit of any
person, firm, corporation, association or other entity (except the
Company) under any circumstances.
For purposes of this Agreement, the term "Trade Secrets" means
information, without regard to form, including, but not limited to,
any technical or non-technical data, formula, pattern, compilation,
program, device, method, technique, drawing, process, financial data,
financial plan, product plan, list of actual or potential customers or
suppliers, or other information similar to any of the foregoing, which
is not commonly known by or available to the public and (i) derives
economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other
persons who can derive economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. For purposes of this Agreement,
the term "Trade Secrets" does not include information that Employee
can show by competent proof (i) was known to Employee and reduced to
writing prior to disclosure by the Company (but only if Employee
promptly notifies the Company of Employee's prior knowledge); (ii) was
generally known to the public at the time the Company disclosed the
information to Employee; (iii) became generally known to the public
after disclosure by the Company through no act or omission of
Employee; or (iv) was disclosed to Employee by a third party having a
bona fide right both to possess the information and to disclose the
information to Employee. The term "Confidential Information" means any
data or information of the Company, other than trade secrets, which is
valuable to the Company and not generally known to competitors of the
Company. The provisions of this Section 6 will apply to Trade Secrets
for so long as such information remains a trade secret and to
Confidential Information during Employee's employment with the Company
and for a period of two (2) years following any termination of
Employee's employment with the Company for whatever reason.
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7.A. Non-Competition Covenant. During Employee's employment by the Company
Employee will be a member of the Company's management team. Employee
agrees that during his employment and for a period of two (2) years
following any termination of Employee's employment for whatever
reason, Employee will not, directly or indirectly, on Employee's own
behalf or in the service of or on behalf of any other individual or
entity, compete with the Company within the Geographical Area (as
hereinafter defined). The term "compete" means to engage in, have any
equity or profit interest in, make any loan to or for the benefit of,
or render services of any marketing, management, sales,
administrative, supervisory or consulting nature, directly or
indirectly, on Employee's own behalf or in the service of or on behalf
of any other individual or entity, either as a proprietor, employee,
agent, independent contractor, consultant, director, officer, partner
or stockholder (other than a stockholder of a corporation listed on a
national securities exchange or whose stock is regularly traded in the
over-the-counter market, provided that Employee at no time owns,
directly or indirectly, in excess of one percent (1%) of the
outstanding stock of any class of any such corporation) any business
which provides Business products or services. For purposes of this
Agreement, the term "Geographical Area" means the territory located
within a seventy-five (75) mile radius of Company headquarters of any
Company facility for which Employee exercised managerial control.
B. Non-Solicitation of Clients Covenant. Employee agrees that during
Employee's employment by the Company and for a period of two (2) years
following the termination of Employee's employment for whatever reason,
Employee will not, directly or indirectly, on Employee's own behalf or
in the service of or on behalf of any other individual or entity,
divert, solicit or attempt to divert or solicit any individual or
entity (i) who is a client of the Company at any time during the six
(6)-month period prior to Employee's termination of employment with the
Company ("Client"), or was actively sought by the Company as a
prospective client, and (ii) with whom Employee had material contact
while employed by the Company, to provide Business services or products
to such Clients or prospects.
C. Construction. The parties hereto agree that any judicial authority
construing all or any portion of this Section 7 or Section 8 below
may, if it chooses, sever any portion of the Geographical Area, client
base, prospective relationship or prospect list or any prohibited
business activity from the coverage of such Section and to apply the
provisions of such Section to the remaining portion of the
Geographical Area, the client base or the prospective relationship or
prospect list, or the remaining business activities not so severed by
such judicial authority. In addition, it is the intent of the parties
that the judicial authority may, if it chooses, replace each such
severed provision with a provision as similar in terms to such severed
provision as may be possible and be legal, valid and enforceable. It
is the intent of the parties that Sections 7 and 8 be enforced to the
maximum extent permitted by law. In the event
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that any provision of either such Section is determined not to be
specifically enforceable, the Company shall nevertheless be entitled
to bring an action to seek to recover monetary damages as a result of
the breach of such provision by Employee.
8. Non-Solicitation of Employees Covenant. Employee further agrees and
represents that during Employee's employment by the Company and for a
period of two (2) years following any termination of Employee's
employment for whatever reason, Employee will not, directly or
indirectly, on Employee's own behalf or in the service of, or on
behalf of any other individual or entity, divert or solicit, or
attempt to divert or solicit, to or for any individual or entity which
is engaged in providing Business services or products, any person
employed by the Company, whether or not such employee is a full-time
employee or temporary employee of the Company, whether or not such
employee is employed pursuant to written agreement and whether or not
such employee is employed for a determined period or at-will.
9. Existing Restrictive Covenants. Employee represents and warrants that
Employee's employment with the Company does not and will not breach
any agreement which Employee has with any former employer to keep in
confidence confidential information or not to compete with any such
former employer. Employee will not disclose to the Company or use on
its behalf any confidential information of any other party required to
be kept confidential by Employee.
10. Return of Proprietary Information. Employee acknowledges that as a
result of Employee's employment with the Company, Employee may come
into the possession and control of Proprietary Information, such as
proprietary documents, drawings, specifications, manuals, notes,
computer programs, or other proprietary material. Employee
acknowledges, warrants and agrees that Employee will return to the
Company all such items and any copies or excerpts thereof, in any form
or medium, and any other properties, files or documents obtained as a
result of Employee's employment with the Company, immediately upon the
termination of Employee's employment with the Company.
11. Proprietary Rights. During the course of Employee's employment with
the Company, Employee may make, develop or conceive of useful
processes, machines, compositions of matter, computer software,
algorithms, works of authorship expressing such algorithm, or any
other discovery, idea, concept, document or improvement which relates
to or is useful to the Company's Business (the "Inventions"), whether
or not subject to copyright or patent protection, and which may or may
not be considered Proprietary Information. Employee acknowledges that
all such Inventions will be "works made for hire" under United States
copyright law and will remain the sole and exclusive property of the
Company. Employee also hereby assigns and agrees to assign to the
Company, in perpetuity, all right, title and interest Employee may
have in and to such Inventions, including without limitation,
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all copyrights, and the right to apply for any form of patent, utility
model, industrial design or similar proprietary right recognized by
any state, country or jurisdiction. Employee further agrees, at the
Company's request and expense, to do all things and sign all documents
or instruments necessary, in the opinion of the Company, to eliminate
any ambiguity as to the ownership of, and rights of the Company to,
such Inventions, including filing copyright and patent registrations
and defending and enforcing in litigation or otherwise all such
rights.
Employee will not be obligated to assign to the Company any Invention
made by Employee while in the Company's employ which does not relate
to any business or activity in which the Company is or may reasonably
be expected to become engaged, except that Employee is so obligated if
the same relates to or is based on Proprietary Information to which
Employee will have had access during and by virtue of Employee's
employment or which arises out of work assigned to Employee by the
Company. Employee will not be obligated to assign any Invention which
may be wholly conceived by Employee after Employee leaves the employ
of the Company, except that Employee is so obligated if such Invention
involves the utilization of Proprietary Information obtained while in
the employ of the Company. Employee is not obligated to assign any
Invention which relates to or would be useful in any business or
activities in which the Company is engaged if such Invention was
conceived and reduced to practice by Employee prior to Employee's
employment with the Company.
12. Remedies. Employee agrees and acknowledges that the violation of any of
the covenants or agreements contained in Sections 6, 7, 8, 9, 10 and 11
of this Agreement would cause irreparable injury to the Company, that
the remedy at law for any such violation or threatened violation
thereof would be inadequate, and that the Company will be entitled, in
addition to any other remedy, to temporary and permanent injunctive or
other equitable relief without the necessity of proving actual damages
or posting a bond.
13. Notices. Any notice or communication under this Agreement will be in
writing and sent by registered or certified mail addressed to the
respective parties as follows:
If to the Company: If to Employee:
Medaphis Corporation Philip M. Pead
2840 Mt. Wilkinson Parkway 1030 Lakeshore Overlook
Suite 300 Alpharetta, Georgia 30005
Atlanta, GA 30339
Attn: General Counsel
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or to such other address or agent as may be hereafter designated in
writing by either party hereto. All such notices shall be deemed given
on the date personally delivered or mailed.
14. Severability. Subject to the application of Section 7(C) to the
interpretation of Sections 7 and 8, in case one or more of the
provisions contained in this Agreement is for any reason held to be
invalid, illegal or unenforceable in any respect, the parties agree
that it is their intent that the same will not affect any other
provision in this Agreement, and this Agreement will be construed as if
such invalid or illegal or unenforceable provision had never been
contained herein. It is the intent of the parties that this Agreement
be enforced to the maximum extent permitted by law.
15. Entire Agreement. This Agreement embodies the entire agreement of the
parties relating to the subject matter of this Agreement and
supersedes all prior agreements, oral or written, regarding the
subject matter hereof. No amendment or modification of this Agreement
will be valid or binding upon the parties unless made in writing and
signed by the parties.
16. Binding Effect. This Agreement will be binding upon the parties and
their respective heirs, representatives, successors, transferees and
permitted assigns.
17. Assignment. This Agreement is one for personal services and will not
be assigned by Employee. The Company may assign this Agreement to its
parent company or to any of its subsidiaries or affiliated companies;
provided that the parent or any subsidiary or affiliate fulfills the
obligations of the Company under this Agreement.
18. Governing Law. This Agreement is entered into and will be interpreted
and enforced pursuant to the laws of the State of Georgia. The parties
hereto hereby agree that the appropriate forum and venue for any
disputes between any of the parties hereto arising out of this
Agreement shall be any federal court in the state where the Company
has its principal place of business and each of the parties hereto
hereby submits to the personal jurisdiction of any such court. The
foregoing shall not limit the rights of any party to obtain execution
of judgment in any other jurisdiction. The parties further agree, to
the extent permitted by law, that a final and unappealable judgment
against either of them in any action or proceeding contemplated above
shall be conclusive and may be enforced in any other jurisdiction
within or outside the United States by suit on the judgment, a
certified exemplified copy of which shall be conclusive evidence of
the fact and amount of such judgment.
19. Indemnification. Employee shall be entitled to the indemnification and
exculpation offered through and set forth in the Company's Charter and
By-laws.
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20. Surviving Terms. Sections 6, 7, 8, 9, 10, 11 and 12 of this Agreement
shall survive termination of this Agreement.
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(signatures appear on next page)
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IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written, effective as of May 1, 1999.
COMPANY: EMPLOYEE:
By: /s/ RANDOLPH L. M. HUTTO /s/ PHILIP M. PEAD
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Randolph L.M. Hutto Philip M. Pead
Title: Executive Vice President
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EXHIBIT A
INVENTIONS
Employee represents that there are no Inventions.
/s/ PMP
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Employee's Initials
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