Exhibit 10.1
LANVISION SYSTEMS, INC.
Employment Agreement among LanVision Systems, Inc., LanVision, Inc. and J. Brian
Patsy effective February 1, 2002.
This EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of
February 1, 2002, by and among LanVision Systems, Inc., a Delaware corporation
("Parent"), LanVision, Inc., an Ohio corporation ("Company") and J. Brian Patsy
("Employee").
RECITALS:
A. Employee is currently an "at will" employee of the Company; and
B.Parent, the Company and Employee mutually desire to modify the terms and
conditions of Employee's employment, including the conversion of Employee's at
will status to employment for a described term, and to enter into this Agreement
which sets forth the terms and conditions of Employee's employment;
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which the parties hereby acknowledge, the parties agree as follows:
1. EMPLOYMENT
Parent and the Company hereby agree to employ Employee, and Employee, in
consideration of such employment and other consideration set forth herein,
hereby accepts employment, upon the terms and conditions set forth herein.
2. POSITION AND DUTIES
During the term of this Agreement, Employee shall be employed in the
position of President of each of Parent and the Company. While employed
hereunder, Employee shall do all things necessary, legal and incident to the
above position, and otherwise shall perform such functions as the Board of
Directors of Parent and the Company may establish from time to time.
3. COMPENSATION
Subject to such modifications as may be approved from time to time by the
Board of Directors of Parent, the Employee shall receive the compensation and
benefits listed on the attached Exhibit A. Such compensation shall be paid by
Parent or the Company, at the discretion of Parent.
4. EXPENSES
Parent or the Company shall pay or reimburse Employee for all travel and
out-of-pocket expenses reasonably incurred or paid by Employee in connection
with the performance of Employee's duties as an employee of Parent or the
Company, respectively, upon compliance with the Company's procedures for expense
reimbursement including the presentation of expense statements or receipts or
such other supporting documentation as the Company may reasonably require.
5. PRIOR EMPLOYMENT
The Employee warrants and represents to Parent and the Company (i) that
the Employee will take no action in violation of any employment agreement or
arrangement with any prior employer, (ii) that the Employee has disclosed to
Parent and the Company all such prior written agreements, (iii) that any
employment agreement or arrangement with any prior employer is null and void and
of no effect, and (iv) that the Employee has the full right and authority to
enter into this Agreement and to perform all of the Employee's obligations
hereunder. The Employee agrees to indemnify and hold Parent and the Company
harmless from and against any and all claims, liabilities or expenses incurred
by Parent and/or the Company as a result of any claim made by any prior employer
arising out of this Agreement or the employment of the Employee by Parent and
the Company.
6. OUTSIDE EMPLOYMENT
Employee shall devote Employee's full time and attention to the
performance of the duties incident to Employee's position with Parent and the
Company, and shall not have any other employment with any other enterprise or
substantial responsibility for any enterprise which would be inconsistent with
Employee's duty to devote Employee's full time and attention to Parent and
Company matters, provided that, the foregoing shall not prevent the Employee
from participating in any charitable or civic organization that does not
interfere with Employee's performance of the duties and responsibilities to be
performed by Employee under this Agreement.
7. CONFIDENTIAL INFORMATION
Employee shall not, during the term of this Agreement or at any time
thereafter, disclose, or cause to be disclosed, in any way Confidential
Information, or any part thereof, to any person, firm, corporation, association,
or any other operation or entity, or use the Confidential Information on
Employee's own behalf, for any reason or purpose. Employee further agrees that,
during the term of this Agreement or at any time thereafter, Employee will not
distribute, or cause to be distributed, Confidential Information to any third
person or permit the reproduction of the Confidential Information, except on
behalf of Parent or the Company in Employee's capacity as an employee of Parent
and the Company. Employee shall take all reasonable care to avoid unauthorized
disclosure or use of the Confidential Information. Employee hereby assumes
responsibility for and shall indemnify and hold Parent and/or the Company
harmless from and against any disclosure or use of the Confidential Information
in violation of this Agreement.
For the purpose of this Agreement, "Confidential Information" shall mean
any written or unwritten information which specifically relates to and or is
used in Parent's or the Company's business (including without limitation,
Parent's or the Company's services, processes, patents, systems, equipment,
creations, designs, formats, programming, discoveries, inventions, improvements,
computer programs, data kept on computer, engineering, research, development,
applications, financial information, information regarding services and products
in development, market information including test marketing or localized
marketing, other information regarding processes or plans in development, trade
secrets, training manuals, know-how of the Company, and the customers, clients,
suppliers and others with whom Parent and/or the Company does or has in the past
done, business, regardless of when and by whom such information was developed or
acquired) which Parent or the Company deems confidential and proprietary which
is generally not known to others outside Parent or the Company and which gives
or tends to give Parent or the Company a competitive advantage over persons who
do not possess such information or the secrecy of which is otherwise of value to
Parent and/or the Company in the conduct of its business -- regardless of when
and by whom such information was developed or acquired, and regardless of
whether any of these are described in writing, reduced to practice,
copyrightable or considered copyrightable, patentable or considered patentable.
Provided, however, that "Confidential Information" shall not include general
industry information or information which is publicly available or is otherwise
in the public domain without breach of this Agreement, information which
Employee has lawfully acquired from a source other than Parent or the Company,
or information which is required to be disclosed pursuant to any law,
regulation, or rule of any governmental body or authority or court order.
Employee acknowledges that the Confidential Information is novel, proprietary to
and of considerable value to Parent and the Company.
Employee agrees that all restrictions contained in this Section 7 are
reasonable and valid under the circumstances and hereby waives all defenses to
the strict enforcement thereof by Parent and/or the Company.
Employee agrees that, upon the request of Parent or the Company, or
immediately on termination of his employment for whatever reason, Employee will
immediately deliver up to the requesting entity all Confidential Information in
Employee's possession and/or control, and all notes, records, memoranda,
correspondence, files and other papers, and all copies, relating to or
containing Confidential Information. Employee does not have, nor can Employee
acquire any property or other right in the Confidential Information.
8. PROPERTY OF PARENT AND THE COMPANY
All ideas, inventions, discoveries, proprietary information, know-how,
processes and other developments and, more specifically improvements to existing
inventions, conceived by the Employee, alone or with others, during the term of
the Employee's employment, whether or not during working hours and whether or
not while working on a specific project, that are within the scope of Parent's
or the Company's business operations or that relate to any work or projects of
Parent or the Company, are and shall remain the exclusive property of Parent and
the Company. Inventions, improvements and discoveries relating to the business
of Parent or the Company conceived or made by the Employee, either alone or with
others, while employed with Parent and the Company are conclusively and
irrefutably presumed to have been made during the period of employment and are
the sole property of Parent and the Company. The Employee shall promptly
disclose in writing any such matters to Parent and the Company but to no other
person without the consent of Parent. The Employee hereby assigns and agrees to
assign all right, title, and interest in and to such matters to the Company. The
Employee will, upon request of Parent, execute such assignments or other
instruments and assist Parent and the Company in the obtaining, at the Company's
sole expense, of any patents, trademarks or similar protection, if available, in
the name of the Company.
9. NON-COMPETITION AGREEMENT
(A) During the term of Employee's employment, whether under this Agreement
or at will, and for a period of one year after the termination date of
Employee's employment, unless extended to two years after the termination date
of this agreement by the additional payment indicated in Section 11(D) (whether
such termination be with or without cause), Employee agrees that he will not
directly or indirectly, whether as an employee, agent, consultant, director,
officer, investor, partner, shareholder, proprietor, lender or otherwise own,
operate or otherwise work for or participate in any competitive business,
anywhere in the world, which designs, develops, manufactures or markets any
product or service that in any way competes with Parent's or the Company's
business, products or services as conducted, or planned to be conducted, on the
date of termination (a "Competitive Business"), provided that the foregoing
shall not prohibit Executive from owning not more than 5% of the outstanding
stock of a corporation subject to the reporting requirements of the Securities
Exchange Act of 1934.
(B) During the term of Employee's employment and for a period ending one
year from the termination of Employee's employment with Parent and the Company,
unless extended by the additional payment indicated in Section 11(D), whether by
reason of the expiration of the
term of this Agreement, resignation, discharge by Parent and the Company or
otherwise, Employee hereby agrees that Employee will not, directly or
indirectly:
(i) solicit, otherwise attempt to employ or contract with any
current or future employee of Parent or the Company for employment or otherwise
in any Competitive Business or otherwise offer any inducement to any current or
future employee of Parent or the Company to leave Parent's or the Company's
employ; or
(ii) contact or solicit any customer or client of Parent or the
Company (an "Existing Customer"), contact or solicit any individual or business
entity with whom Parent or the Company has directly communicated for the purpose
of rendering services prior to the effective date of such termination (a
"Potential Customer"), or otherwise provide any other products or services for
any Existing Customer or Potential Customer of Parent or the Company, on behalf
of a Competitive Business or in a manner that is competitive to the Parent's or
the Company's business; or
(iii) Use or divulge to anyone any information about the identity of
Parent's or the Company's customers or suppliers (including without limitation,
mental or written customer lists and customer prospect lists), or information
about customer requirements, transactions, work orders, pricing policies, plans,
or any other Confidential Information.
(C) For the purpose of this Agreement, Competitive Business shall mean any
business operation (including a sole proprietorship) anywhere in the world which
designs, develops, manufactures or markets any product or service that in any
way competes with Parent's or the Company's health information access system
business, products or services as conducted, or contemplated to be conducted, on
the date of termination.
10. TERM
Unless earlier terminated pursuant to Section 11 hereof, the term of this
Agreement shall be for the time period beginning February 1, 2002, the date
hereof, and continuing through January 31, 2003 (the "Term"). Neither Parent nor
the Company nor the Employee shall have any obligation to the other to negotiate
a new period of employment subsequent to the end of the Term. Unless waived in
writing by the Company, the requirements of Sections 7 (Confidential Agreement),
8 (Property of Parent and the Company) and 9 (Non-Competition Agreement) shall
survive the expiration or termination of this Agreement for any reason except as
set forth in Section 11(D)(ii).
11. TERMINATION.
(A) Death. This Agreement and Employee's employment thereunder shall be
terminated on the death of Employee, effective as of the date of Employee's
death.
(B) Continued Disability. This Agreement and Employee's employment
thereunder may be terminated, at the option of Parent, upon a Continued
Disability of Employee, effective as of the date of the determination of
Continued Disability as that term is hereinafter defined. For the purposes of
this Agreement, "Continued Disability" shall be defined as the inability or
incapacity (either mental or physical) of Employee to continue to perform
Employee's duties hereunder for a continuous period of one hundred twenty (120)
working days, or if, during any calendar year of the Term hereof because of
disability, Employee shall have been unable to perform Employee's duties
hereunder for a total period of one hundred eighty (180) working days regardless
of whether or not such days are consecutive. The determination as to whether
Employee is unable to perform the essential functions of Employee's job shall be
made by Parent's Board of Directors in its reasonable discretion; provided,
however, that if Employee is not satisfied with the decision of the Board,
Employee will submit to examination by three competent physicians who practice
in the metropolitan area in which the Company then resides, one of whom shall be
selected by Parent, another of whom shall be selected by Employee, with the
third to be selected by the physicians so selected. The decision of a majority
of the physicians so selected shall supersede the decision of the Board and
shall be final and conclusive.
(C) Termination For Good Cause. Notwithstanding any other provision of
this Agreement, Parent may at any time immediately terminate this Agreement and
Employee's employment thereunder for Good Cause. For this purpose, "Good Cause"
shall include the following: the current use of illegal drugs; indictment for
any crime involving moral turpitude, fraud or misrepresentation; commission of
any act which would constitute a felony and which would adversely impact the
business or reputation of Parent or the Company; fraud; misappropriation or
embezzlement of Parent or Company funds or property; willful misconduct or
grossly negligent or reckless conduct which is materially injurious to the
reputation, business or business relationships of Parent or the Company;
material violation or default on any of the provisions of this Agreement; or
material failure to meet reasonable performance criteria or reasonable standards
of conduct as established from time to time by the Corporation's Board of
Directors, which failure continues for at least 30 days after written notice
from the Corporation to the Executive. Any alleged cause for termination shall
be delivered in writing to Employee stating the full basis for such cause along
with any notice of such termination.
(D) Termination Without Good Cause.
(i) Parent or the Company may terminate Employee's employment prior
to the Expiration Date at any time, whether or not for Good Cause (as "Good
Cause" is defined in Section 11(C) above). In the event Parent or the Company
terminates Employee for reasons other than Good Cause, Employee's Death, or
Employee's Disability, Parent or the Company will pay Employee a lump sum amount
equal to the Employee's prior twelve months total compensation [to include only
the base compensation and bonuses paid to Employee during that prior twelve
month period] at the time of termination. Such severance payment shall be paid
within 90 days following the date of Employee's termination. Parent or
Corporation may elect to extend the one year period of noncompetition to two
years upon prior written notice to Employee, which notice will be delivered not
later than 180 days prior to the expiration of the
initial one year period of noncompetition and upon payment of an additional lump
sum amount equal to the first lump sum payment made, above This second lump sum
payment shall be paid within 180 days following notification of the election to
extend the noncompetition period for a second year.
(ii) If the Company fails to make the payments to Employee as set
forth above, the provisions of the Section 9 (NonCompetition) shall terminate as
of the date such payments cease.
12. ADVICE TO PROSPECTIVE EMPLOYERS
If Employee seeks or is offered employment by any other company, firm or
person, he will notify the prospective employer of the existence and terms of
the non-competition and confidentiality agreement set forth in Sections 7 & 9 of
this Agreement. Employee may disclose the language of Sections 7 & 9, but may
not disclose the remainder of the Agreement.
13. CHANGE IN CONTROL; ACCELERATED VESTING SCHEDULES
In the event that, within twelve months of a change in control of Parent,
Employee's employment by Parent and the Company is terminated prior to the end
of the Term or Employee terminates his employment due to a material reduction in
his duties or compensation, all stock options granted to Employee shall
immediately vest in full, and Parent or the Company will pay Employee a lump sum
amount equal the Employee's prior twelve months total compensation [to include
only base compensation and bonuses paid during that prior twelve month period]
at the time of termination. For purposes of this Agreement, "change in control"
means any of the following events:
(A) A change in control of the direction and administration of Parent's
business of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), as in effect on the date hereof and
any successor provision of the regulations under the 1934 Act, whether or not
Parent is then subject to such reporting requirements; or
(B) Any "person" (as such term is used in Section 13(d) and Section
14(d)(2) of the 1934 Act but excluding any employee benefit plan of Parent) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of Parent representing more than one half
of the combined voting power of Parent's outstanding securities then entitled to
vote for the election of directors; or
(C) Parent shall sell all or substantially all of the assets of Parent; or
(D) Parent shall participate in a merger, reorganization, consolidation or
similar business combination that constitutes a change in control as defined in
the 1996 LanVision Systems, Inc. Employee Stock Option Plan and/or results in
the occurrence of any event described in clause (A), (B) or
(C) above.
14. ACKNOWLEDGEMENTS
Parent, the Company and Employee each hereby acknowledge and agree as
follows:
(A) The covenants, restrictions, agreements and obligations set forth
herein are founded upon valuable consideration, and, with respect to the
covenants, restrictions, agreements and obligations set forth in Sections 7, 8
and 9 hereof, are reasonable in duration and geographic scope;
(B) In the event of a breach or threatened breach by Employee of any of
the covenants, restrictions, agreements and obligations set forth in Section 7,
8 and/or 9, monetary damages or the other remedies at law that may be available
to Parent and/or the Company for such breach or threatened breach will be
inadequate and, without prejudice to Parent's or the Company's right to pursue
any other remedies at law or in equity available to it for such breach or
threatened breach, including, without limitation, the recovery of damages from
Employee, Parent and/or the Company will be entitled to injunctive relief from a
court of competent jurisdiction; and
(C) The time period and geographical area set forth in Section 9 hereof
are each divisible and separable, and, in the event that the covenants not to
compete contained therein are judicially held invalid or unenforceable as to
such time period and/or geographical area, they will be valid and enforceable in
such geographical area(s) and for such time period(s) which the court determines
to be reasonable and enforceable. The Employee agrees that in the event any
court of competent jurisdiction determines that the above covenants are invalid
or unenforceable to join with Parent and the Company in requesting that court to
construe the applicable provision by limiting or reducing it so as to be
enforceable to the extent compatible with the then applicable law. Furthermore,
any period of restriction or covenant herein stated shall not include any period
of violation or period of time required for litigation to enforce such
restriction or covenant.
15. NOTICES
Any notice or communication required or permitted hereunder shall be given
in writing and shall be sufficiently given if delivered personally or sent by
telecopy to such party addressed as follows:
(A) In the case of Parent or the Company, if addressed to it as follows:
LanVision Systems, Inc.
5481 Creek Road
Cincinnati, Ohio 45242-4001
Attn: J. Brian Patsy
(B) In the case of Employee, if addressed to Employee at:
J. Brian Patsy
5481 Creek Road
Cincinnati, Ohio 45242-4001
Any such notice delivered personally or by telecopy shall be deemed to
have been received on the date of such delivery. Any address for the giving of
notice hereunder may be changed by notice in writing.
16. ASSIGNMENT, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective legal representatives, successors and
assigns. Parent and the Company may assign or otherwise transfer their rights
under this Agreement to any successor or affiliated business or corporation
(whether by sale of stock, merger, consolidation, sale of assets or otherwise),
but this Agreement may not be assigned, nor may the duties hereunder be
delegated by Employee. In the event that Parent and the Company assign or
otherwise transfer their rights under this Agreement to any successor or
affiliated business or corporation (whether by sale of stock, merger,
consolidation, sale of assets or otherwise), for all purposes of this Agreement,
"Parent" and the "Company" shall then be deemed to include the successor or
affiliated business or corporation to which Parent and the Company,
respectively, assigned or otherwise transferred their rights hereunder.
17. MODIFICATION
This Agreement may not be released, discharged, abandoned, changed, or
modified in any manner, except by an instrument in writing signed by each of the
parties hereto.
18. SEVERABILITY
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect any other provisions hereof and the parties shall use
their best efforts to substitute a valid, legal and enforceable provision,
which, insofar as practical, implements the purpose of this Agreement. Any
failure to enforce any provision of this Agreement shall not constitute a waiver
thereof or of any other provision hereof.
19. COUNTERPARTS
This Agreement may be signed in counterparts and each of such counterparts
shall constitute an original document and such counterparts, taken together,
shall constitute one in the same instrument.
20. ENTIRE AGREEMENT
This constitutes the entire agreement among the parties with respect to
the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements, understandings, and negotiations, whether written or
oral, with respect to such subject matter.
21. DISPUTE RESOLUTION
Except as set forth in Section 14 above, any and all disputes arising out
of or in connection with the execution, interpretation, performance, or
non-performance of this Agreement or any agreement or other instrument between,
involving or affecting the parties (including the validity, scope and
enforceability of this arbitration clause), shall be submitted to and resolved
by arbitration. The arbitration shall be conducted pursuant to the terms of the
Federal Arbitration Act and the Commercial Arbitration Rules of the American
Arbitration Association. Either party may notify the other party at any time of
the existence of an arbitrable controversy by certified mail and shall attempt
in good faith to resolve their differences within fifteen (15) days after the
receipt of such notice. If the dispute cannot be resolved within the fifteen-day
period, either party may file a written demand for arbitration with the American
Arbitration Association. The place of arbitration shall be Cincinnati, Ohio.
22. GOVERNING LAW
The provisions of this Agreement shall be governed by and interpreted in
accordance with the laws of the State of Ohio and the laws of the United States
applicable therein. The Employee acknowledges and agrees that Employee is
subject to personal jurisdiction in state and federal courts in Hamilton County,
Ohio.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
effective as of the date first above written.
LANVISION SYSTEMS, INC.
By: /s/ Eric S. Lombardo
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Its: Executive Vice President
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Date 10-3-02
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By: /s/ Eric S. Lombardo
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Its: Executive Vice President
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Date 10-3-02
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EMPLOYEE
/s/ J. Brian Patsy
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J. Brian Patsy
Date 10-3-02
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EXHIBIT A - COMPENSATION AND BENEFITS
Employee: J. Brian Patsy
Salary: Fiscal Year 2002 (2/1/02 - 1/31/03)
Annual Base Salary - $175,875.00 payable in such number of installments as
may be agreed upon among Parent, the Company and Employee
Minimum Fiscal Year Cash Bonus - $25,000
On target bonus, per the Executive Bonus Plan - $55,000
Stock Options:
Parent agrees that Employee shall be eligible to participate in the
1996 LanVision Systems, Inc. Employee Stock Option Plan and to
receive stock option grants as the Parent's Board of Directors may
determine appropriate from time to time hereafter.
Car Allowance: $450 per month
Benefits:
Employee shall be eligible to participate in all other employee fringe benefit
plans of Parent or the Company (but not both if Parent and Company have separate
plans providing benefits that may be similar in nature), to the same extent and
at the same levels as other executive officers of Parent or the Company are then
participating.