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Exhibit 10.8.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of March 15, 2000 by and between QUALITY CARE SOLUTIONS, INC., a Nevada
corporation (the "Company"), and Brian N. Burns, an individual residing in
Arizona ("Employee").
RECITALS:
A. The Company desires to retain the services of Employee as its Vice
President and Chief Financial Officer and the Employee desires to be employed by
the Company in such capacities.
B. The parties desire to set forth the terms and conditions of
Employee's employment with the Company, as follows:
AGREEMENT:
The parties hereto, in consideration of the premises and mutual
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby agree as
follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated:
1.1 "Board" means the Board of Directors of the Company or any
successor thereof.
1.2 "Change in Control". For purposes of this Agreement, a "Change
in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the Company) following the
date hereof of any voting securities of the Company (the "Voting
Securities") by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of the
combined voting power of the Company's then outstanding Voting
Securities; provided, however, in determining whether a Change in
Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute
an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan
(or a trust forming a part thereof) maintained by (A) the Company or
(B) any corporation or other Person of which a majority of its voting
power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company (for purposes of this
definition, a "Subsidiary") (ii) the Company or its Subsidiaries, or
(iii) any Person in connection with a Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of the date this Agreement is approved by
the Board are members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the members of the
Board; provided, however, that if the election, or nomination for
election by the Company's common stockholders, of any new director was
approved by a vote of the members of the Board designated to grant such
approval under Section 12 of the Company's Bylaws, such new director
shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; provided, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
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(c) Approval by stockholders of the Company of:
(i) A merger, consolidation or reorganization involving the
Company, unless such merger, consolidation or reorganization
is a "Non-Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of the
Company where:
(A) the stockholders of the Company, immediately
before such merger, consolidation or reorganization,
own directly or indirectly immediately following such
merger, consolidation or reorganization, at least
seventy percent (70%) [sixty percent (60%) after an
IPO] of the combined voting power of the outstanding
voting securities of the corporation resulting from
such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same
proportion as their ownership of the Voting
Securities immediately before such merger,
consolidation or reorganization;
(B) the individuals who were members of the Incumbent
Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds (a
majority after an IPO) of the members of the board of
directors of the Surviving Corporation, or a
corporation beneficially directly or indirectly
owning a majority of the Voting Securities of the
Surviving Corporation; and
(C) no Person other than (i) the Company, (ii) any
Subsidiary, (iii) any employee benefit plan (or any
trust forming a part thereof) maintained by the
Company, the Surviving Corporation, or any
Subsidiary, or (iv) any Person who, immediately prior
to the merger, consolidation or reorganization had
Beneficial Ownership of thirty percent (30%) or more
of the then outstanding Voting Securities), has
Beneficial Ownership of thirty percent (30%) or more
of the combined voting power of the Surviving
Corporation's then outstanding voting securities.
(ii) A complete liquidation or dissolution of the Company; or
(iii) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to a Subsidiary or a parent in a
Non-Control Transaction).
(d) Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely: (i) because any Person (the "Subject Person")
acquired Beneficial Ownership of more than the permitted amount of the
then outstanding Voting Securities as a result of the acquisition of
Voting Securities by the Company which, by reducing the number of
Voting Securities then outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Persons, provided that if a
Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by the Company, and
after such share acquisition by the Company, the Subject Person becomes
the Beneficial Owner of any additional Voting Securities Beneficially
Owned by the Subject Person, then a Change in Control shall occur; or
(ii) by virtue of an IPO.
1.3 "Company" means Quality Care Solutions, Inc. or any successor
entity.
1.4 "Compensation" means the total amount payable to Employee pursuant
to Section 4.1.
1.5 "Effective Date" means the date first written above.
1.6 "Final Average Annual Compensation" means the highest annual total
amount (annualized if the Employee's term of employment is less than one year)
included in Employee's gross income for federal income tax purposes in
connection with employment hereunder for payments or benefits received under the
provisions of Sections 4.1 and 4.4 (not including stock options received in lieu
of salary increases) hereof during the three calendar years immediately
preceding the calendar year during which termination of employment occurs.
1.7 "Good Reason" means the occurrence of any of the following events
to which Employee has not expressly agreed to in writing:
(a) The assignment to Employee of duties inconsistent with
Employee's position, duties, responsibilities and status with
the Company on the Effective Date or the failure to re-elect
or re-appoint Employee to serve as Vice President and Chief
Financial Officer;
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(b) A material reduction in Employee's Compensation as in effect
on the Effective Date or on any renewal date of this
Agreement, whichever occurs later;
(c) Employee's relocation, without his consent, to any
metropolitan area other than the principal location at which
Employee performed Employee's duties on the Effective Date,
except for required travel by Employee on the Company's
business;
(d) The failure of the Company to obtain the assumption of this
Agreement by any successor to substantially all of the assets
or business of the Company; or
(e) Any material breach by the Company of any provision of this
Agreement which is not corrected by the Company or, if the
breach cannot be corrected, as to which the Company fails to
pay to Employee reasonable compensation for such breach,
within 60 days following receipt by the Company of written
notice from Employee specifying the nature of such breach.
(f) Relocation of the Employee's place of employment more than 100
miles from Phoenix, Arizona.
(g) A voluntary termination by Employee delivered within the
ninety (90) day period following a Change of Control.
1.8 "Proprietary Information" means all information used by the Company
in the conduct of its business and includes any information developed by
Employee at the direction of the Company, out of or as an extension of existing
Proprietary Information, or using resources, such as materials or tools,
existing technology, patents and licenses belonging to the Company. Proprietary
Information includes, but is not limited to, information relating to (a) the
products, inventories, discoveries, patents, formulae, know-how, designs, trade
secrets or other technical information of the Company, (b) the marketing
methods, names of vendors, names of customers, costs of materials, prices of
products or services, lists or records, profits and losses or any other
financial prices of products or services, lists or records, profits and losses
or any other financial information of the Company, (c) the present or future
plans, names and compensation of employees or any other business information of
the Company, or (d) any other information or data of a confidential nature
concerning the products, technology, operations, finances or business of the
Company.
1.9 "Termination For Cause" means the termination of employment of
Employee by the Board because of Employee's personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, conviction of the violation of any material
law, rule or regulation resulting in the Company's detriment or reflecting upon
the Company's integrity (other than traffic infractions or similar minor
offenses), a violation of the Company's insider trading policies or a material
breach by the Employee of the terms of this Agreement or any other written
agreement between Company and Employee which, by its terms, provides for
termination of Employee for breach of its terms, and failure to cure such breach
within 30 days after receipt of written notice from the Company specifying the
nature of such breach or to pay compensation to the Company deemed reasonable by
the Company if the breach cannot be cured.
1.10 "Total and Permanent Disability" means any condition affecting
Employee that prevents the performance of the essential job functions and which
is expected to be of a long, continued and indefinite duration which has caused
Employee's absence from service, after providing to Employee reasonable
accommodation to perform the requirements of the job if required by law, for not
less than 180 consecutive days during any 12 month period or for such shorter
periods aggregating 180 days during any 12 month period. In such instance, a
determination of the existence of the Employee's disability and of the duration
of the disability may be made by written agreement between the Company and the
Employee, or Employee's legally appointed guardian if the Employee then is
incompetent. If the parties do not agree, such determination shall be made, and
certified in writing, by a licensed physician who is a member of the Maricopa
County Medical Association and not an employee of the Company, and such
physician's determination, after the proper medical examination, shall be
binding and conclusive upon the parties to this Agreement. The examining
physician shall be selected by agreement of the Company and the Employee. If the
Company and the Employee cannot agree on a physician, then each party shall
select a physician and these two physicians shall select a third physician who
will act as the examining physician. The examining physician shall make the
determination as promptly as practicable after selection and examination of the
Employee. The services provided by the examining physician shall be paid for by
the Company. The Employee shall fully cooperate with the examining physician,
including submission to such medical examination as may be requested by the
examining physician for the purpose of determining whether the Employee is
totally disabled. If the Employee is found to be totally disabled, Employee
shall be deemed to remain disabled until found otherwise by the examining
physician. Should disability commence within six months after termination of a
prior period of disability, and should the later disability be related to the
same sickness or injury which results from any earlier disability, then the
later period of disability shall be considered to have consecutively followed
the earlier period of disability. Whether the later disability is related to the
same sickness or injury which resulted in the earlier disability shall be
determined in the same manner provided above for determining disability.
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2. Employment. The Company hereby retains and employs Employee to serve
in the capacity of Vice President and Chief Financial Officer of the Company.
Employee accepts such employment on the terms and conditions set forth herein.
Employee shall serve in such other executive capacities and have such additional
titles and authorities with respect to the Company as the Board may from time to
time reasonably prescribe. During the term of this Agreement, Employee shall
devote substantially his entire work time, attention, and energies to the
business of the Company. Subject to the provisions of Section 6 hereof, Employee
may serve as a director or member of any other corporation or entity or manage
personal investments so long as any such service does not cause any conflict of
interest with the Company.
3. Term. The term of this Agreement shall commence on the Effective
Date and shall end, unless previously terminated in accordance with the
provisions of Section 5 hereof or this Section 3, at the close of business on
the day before the third anniversary of the Effective Date hereof; provided,
however, that on December 31, 2000 and on December 31 of each subsequent year,
the term of this Agreement shall be automatically extended for an additional
one-year period (the "Extension Period" hereof). Notwithstanding the foregoing,
30 days prior to December 31, 2000 and on December 31 of any subsequent year
during which this Agreement is in effect, the Employee or the Board may
determine to allow this Agreement to terminate on the date of the end of the
original term hereof or the end of the last automatically effective Extension
Period, whichever is applicable, and in such event the Company or the Employee,
as applicable, shall give the other prompt written notice of such determination.
4. Compensation.
4.1 Base Salary. Subject to the further provisions of this
Agreement, the Company agrees to pay to Employee One Hundred
Ninety-Five Thousand Dollars ($195,000) annually, payable no less
frequently than on a semi monthly basis, with such increases as shall
be made from time to time in accordance with the Company's regular
salary administrative practices as applied to Company officers or, if
increased pursuant to the preceding sentence, from the amount to which
the base salary is increased. The base salary of Employee shall not be
decreased at any time during the term of this Agreement from the amount
in effect as of the Effective Date.
4.2 Fringe Benefits. Employee shall be entitled to participate
in any fringe benefits which are now or may hereafter become applicable
to the Company's senior executives, and any other benefits which are
commensurate with the duties and responsibilities to be performed by
the Employee under this Agreement; including, but not limited to,
automobile or other transportation allowances; reimbursement for
reasonable business expenses accounted for in accordance with
applicable governmental regulations; life, long-term disability and
accident insurance plans; employee saving and investment plans; stock
option or purchase plans; and medical, dental and hospitalization
insurance plans; and such other perquisites as the Company may, from
time to time and in its sole discretion, make available generally to
employees of similar rank without any material reduction in such fringe
benefits as in effect on the Effective Date hereof. Employee shall be
entitled to paid vacation days as set forth in the Company's policy
manual for employees of similar rank and longevity with the Company.
4.3 Participation in Retirement and Benefit Plans. The
Employee shall be entitled to participate in any retirement, pension,
thrift or other retirement plan that the Company has adopted or may
adopt for the benefit of its senior executives.
4.4 Incentive Bonuses. The Company shall establish and
maintain an Incentive Bonus Plan throughout the term of this Agreement
providing for incentive compensation to Employee. Such plan shall
establish objective annual performance criteria and shall entitle
Employee to receive incentive compensation upon achievement thereof. In
addition, the Employee may be considered by the Board of Directors for
the award of discretionary bonuses, depending upon the Board's
evaluation of the Employee's performance.
5. Termination. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
5.1 Total and Permanent Disability. In the event Employee
suffers Total and Permanent Disability, the Company may terminate
Employee's employment. Upon termination by reason of Total and
Permanent Disability the Company shall pay to Employee such benefits as
may be provided to officers of the Company under any Company provided
disability insurance or similar policy or under any Company adopted
disability plan and in the absence of any such policy or plan shall
continue to pay to Employee for a period of not less than six months
the Compensation then in effect as of the effective date of Employee's
termination. Nothing contained herein shall be construed to affect
Employee's rights under any disability insurance or similar policy,
whether maintained by the Company, Employee or another party.
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5.2 Death. In the event of the death of Employee this
Agreement shall terminate and all obligations of the Company hereunder
shall be extinguished as of the date of Employee's death. Nothing
contained herein shall be construed to affect any rights of Employee's
estate under any life insurance or similar policy, whether owned by the
Company, the Employee or any third party.
5.3 Termination For Cause. The Company may effect a
Termination For Cause of Employee at any time with notice to the
Employee. The Company shall have no further obligation to pay
Compensation hereunder after the date of Termination For Cause but
shall pay all accrued Compensation and benefits through such date.
5.4 Termination by Employee With or Without Good Reason.
Employee may terminate his employment hereunder at any time without
Good Reason upon 30 days written notice to the Company. Employee may
also terminate his employment hereunder at any time without notice
within 180 days following the occurrence of an event constituting Good
Reason.
5.5 Benefits on Termination by Employee for Good Reason or by
the Company Without Cause. If Employee elects to terminate his
employment during the term of this Agreement within 180 days following
the occurrence of an event constituting Good Reason hereunder, or if,
in violation of the terms of this Agreement, the Company terminates
Employee's employment other than as provided in Sections 5.1, 5.2 or
5.3 hereof, Employee shall be entitled to receive:
(a) Severance pay commencing 30 days following the date
Employee terminates his employment in an amount equal
to one-twelfth of 100% of Employee's Final Average
Annual Compensation per month payable monthly for a
period of 18 months;
(b) During the period of time in which the Company is
paying Severance Pay pursuant to Section 5.5(a), the
Company shall, at its expense, continue on behalf of
the Employee and his dependents and beneficiaries the
life insurance, disability, medical, dental and
hospitalization benefits provided to the Employee
immediately prior to the Notice of Termination. The
coverages and benefits (including deductibles and
costs) provided during such period shall be no less
favorable to the Employee and his dependents and
beneficiaries than were provided on the date
immediately prior to the Termination. The Company's
obligations hereunder with respect to continuation of
benefits shall terminate in the event Employee
obtains such benefits (regardless of the level and
scope of coverage) pursuant to a subsequent
employer's benefit plan;
(c) The restrictions on any outstanding stock options
(including restricted stock and granted performance
shares or units) granted to the Employee under any
stock option plan or any other incentive plan or
arrangement shall lapse and such incentive award
shall become 100% vested, all stock options and stock
appreciation rights granted to the Employee shall
become immediately exerciseable and shall become 100%
vested, and all performance units granted to the
Employee shall become 100% vested; and
(d) For the purposes of this Section 5.5, a decision by
the Company not to allow an automatic extension of
the term of this Agreement, as permitted under the
provisions of Section 3 hereof, shall not constitute
a termination of Employee's employment in violation
of the terms of this Agreement.
5.6 Benefits Not Exclusive. Any amounts paid to Employee under
the provisions of this Section 5 shall not affect Employee's right to payments,
including payments on an accelerated basis, under any deferred compensation plan
maintained by the Company. Any amendment to any such plan that would diminish
Employee's rights or deprive Employee of an immediate payment on termination of
employment as defined in such plan, shall be ineffective with respect to
Employee, unless Employee specifically consents, in writing, to such amendment.
6. Restrictive Covenants.
6.1 Covenant Not to Compete. Employee agrees that during the
term of his employment hereunder, and for a period of 18 months thereafter, or
if a court determines 18 months is not necessary to protect the Company's
legitimate interests, then for the period of one year, Employee shall not
perform services anywhere worldwide (or if a court determines that this
restriction is not necessary to protect the Company's legitimate interests, then
such geographical area that is determined necessary to protect Company's
legitimate interests) in any business which sells or otherwise deals with
products similar to or competitive with those developed by or in the process of
development by the Company during the term of employment hereunder. This
non-competition covenant shall include all forms of competition, direct or
indirect, including competition as an employee, proprietor, shareholder, member,
officer, director, consultant, trustee, independent contractor or in any other
capacity. The parties acknowledge that the worldwide geographic area of this
covenant is reasonable in view of the highly specialized and narrow scope of the
present and proposed business of the Company and the consequent ability of the
Employee to work in non-competitive areas, provided that, if a court determines
that a worldwide scope is not necessary to protect the Company's legitimate
interests, the geographic scope shall be reduced to the United States of
America. Nothing in this Section 6.1 shall be deemed to prohibit Employee from
purchasing less than five percent of the outstanding shares of any company whose
shares are traded on a national exchange and which, at the time of purchase, is
not engaged in competition with the Company or any of its affiliates or
subsidiaries. Employee and Company expressly acknowledge that the Company and
its customers conduct business on
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a worldwide basis and that the covenant contained herein is reasonable
and necessary to protect the Company's interests notwithstanding the
absence of a geographic restriction.
6.2 Confidential Information. Employee agrees that all
Proprietary Information is the sole and exclusive property of the
Company and that Employee will not, during the term of employment or
any time after termination of employment, disclose any Proprietary
Information to any third party or use any Proprietary Information in
any way to compete with or to act in any way adverse to the Company,
except with the prior written consent of the Company. Employee
acknowledges that Employee has and will have access to Proprietary
Information of the Company and Proprietary Information of the Company's
subsidiaries, divisions and affiliated companies, now or hereafter
existing (collectively referred to hereinafter as the "Affiliates")
throughout the term of this Agreement and that part of Employee's work
assignment may involve the development of Proprietary Information. Any
such Proprietary Information, regardless of whether Employee alone or
with others developed any such Proprietary Information, shall be and
shall remain the property of the Company or of the Company's
Affiliates. During the term of this Agreement and after termination of
employment, Employee shall not, either voluntarily or involuntarily, on
either his own account, as a member of a firm, or on behalf of another
employer or otherwise, directly or indirectly, use or reveal to any
person, partnership, corporation or association any trade secret or
confidential information of the Company or of the Affiliates. Such
trade secrets shall include, but shall not be limited to, software
formulas, programs, patterns, codes, algorithms, devices, secret
inventions, processes, business plans, marketing plans or programs, any
non-public financial information, including but not limited to
financial information, forecasts and statistics, contracts, customer
lists, compensation arrangements and business opportunities. Employee
will not make available to any person, partnership, corporation or
association, or retain after termination of employment, any Company or
Affiliates policy manuals, printed materials, programs, formulas,
algorithms, files, records, drawings or computer disc containing
information related to the Company or Affiliates.
6.3 Invention Rights. Employee hereby agrees to assign any and
all rights to any Proprietary Information, discovery, idea, computer
program, invention or inventive improvement (whether patentable or
not), design, drawing, sketch, specification, or other things conceived
of or reduced to practice during employment with the Company which
relate to the Company's business, or which are conceived of or reduced
to practice after termination of employment which make use of any of
the foregoing. Employee further agrees to execute (without further
consideration) any documents in furtherance of perfecting the Company's
rights in the foregoing, including documents transferring patent,
copyright, trademark, trade secret or other rights. In instances where
any doubt exists in Employee's mind as to whether anything developed by
Employee falls within the foregoing categories, Employee agrees to
request a written statement from the Company regarding the same.
6.4 Disclosure of Information. Employee agrees to promptly
disclose in writing to the Company any discovery, idea, computer
program, invention or inventive improvement (whether patentable or
not), design, drawing, sketch, specification, or other things conceived
of or reduced to practice during employment with the Company which
relate to the Company's business, or which are conceived of or reduced
to practice after termination of employment which make use of any of
the foregoing. In instances where any doubt exists in Employee's mind
as to whether anything developed by Employee falls within the foregoing
categories, Employee agrees to request a written statement from the
Company regarding the same. Employee agrees to safeguard all the
foregoing information from public disclosure, including taking any such
measures as the Company may require to prevent divulgence to third
parties.
6.5 Unauthorized Disclosure. During the period that the
Employee is actively employed by the Company and thereafter, the
Employee shall not make any Unauthorized Disclosure. For purposes of
this Agreement, "Unauthorized Disclosure" shall mean disclosure by the
Employee without the consent of the Board (other than pursuant to a
court order) to any person, other than an employee, consultant,
auditor, attorney or director of the Company or a person to whom
disclosure is reasonably necessary or appropriate in connection with
the performance by the Employee of his duties as an employee of the
Company or as may be legally required, in violation of any valid
standard nondisclosure agreement (or similar document) executed by the
Employee; provided, however, that such term shall not include the use
or disclosure by the Employee, without consent, of any information
known generally to the public (other than as a result of disclosure by
him in violation of this Section 12) or any information not otherwise
considered confidential and material by a reasonable person engaged in
the same business as that conducted by the Company.
7. Injunctive Relief. Employee acknowledges that the restrictions
contained in Section 6 are a reasonable and necessary protection of the
immediate interests of the Company and that any violation of these restrictions
would cause substantial injury to the Company. In the event of a breach or
threatened breach by Employee of these restrictions, the Company shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining Employee from such breach or threatened breach; provided, however,
that the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.
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8. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Employee, the Company and their respective heirs,
executors, administrators, successors and assigns; provided, however, that
Employee may not assign Employee's rights or delegate Employee's duties
hereunder without the prior written consent of the Company. The Company may
assign its rights or delegate its duties hereunder to any of its subsidiaries or
affiliated corporations or to any successor to substantially all of the assets
or business of the Company. This Agreement supersedes all prior employment
agreements between the parties.
9. Modification, Waiver or Amendment. The provisions of this Agreement
may not be modified, amended or waived except by a written instrument executed
by the Company and Employee. The waiver of any provision of this Agreement by
either party shall not constitute a waiver of any subsequent occurrences or
transactions unless the waiver, by its terms, constitutes a continuing waiver.
10. No Mitigation. Any compensation earned by Employee from another
employer or from employment not in violation of the provisions of Section 2 or
Section 6 hereof shall not reduce any payment to which Employee is entitled
under the terms of this Agreement.
11. Change of Control. Notwithstanding any contrary provision of this
Agreement or in any stock option plan of the Company, or any stock option
agreement entered into by Employee pursuant to any such plan, upon a Change of
Control, the restrictions on any outstanding stock options (including restricted
stock and granted performance shares or units) granted to the Employee under any
stock option plan or any other incentive plan or arrangement shall lapse and
such incentive award shall become 100% vested, all stock options and stock
appreciation rights granted to the Employee shall become immediately
exerciseable and shall become 100% vested, and all performance units granted to
the Employee shall become 100% vested.
12. Excise Tax Payments.
12.1 In the event that the Company determines that a portion
of any payment or benefit to the Employee or for his benefit payable or
distributable pursuant to the terms of this Agreement will be deemed to
be an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") (a "Payment" or "Payments"), then the Company shall have the
right to reduce the Payment by the amount of such excess.
12.2 An initial determination as to whether all or a portion
of a Payment represents an excess parachute payment and the amount
thereof shall be made at the Company's expense by its accounting firm
(the "Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed supporting
calculations and documentation to the Company and the Employee within
ten (10) days of the Termination Date. Within ten days of the delivery
of the Determination to the Employee, the Employee shall have the right
to dispute the Determination.
13. Miscellaneous.
13.1 Entire Agreement. This Agreement including the documents
and instruments referred to herein, rescinds and supersedes any other
agreement and contains the entire agreement and understanding between
the parties relative to the employment of Employee, there being no
terms, conditions, warranties, or representations other than those
contained or referred to herein, and no amendment hereto shall be valid
unless made in writing and signed by both of the parties hereto.
13.2 Governing Law. This Agreement shall be governed by,
enforced, interpreted and construed in accordance with the internal
substantive laws of the State of Arizona as applied to residents of
Arizona without regard to conflicts or choice of law principles.
13.3 Legal Modification and Severability. In the event that
any provisions herein shall be legally unenforceable, the provisions
shall be modified to the least extent possible to be enforceable and
the remaining provisions nevertheless shall be carried into effect.
13.4 Attorneys' Fees. In the event of any litigation between
the parties hereto arising out of the terms, conditions and obligations
expressed in this Agreement, the prevailing party in such litigation
shall be entitled to recover reasonable attorneys' fees incurred in
connection therewith.
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13.5 Notices. All notices required or permitted to be given
hereunder shall be deemed given if in writing and delivered personally
or sent by facsimile, telex, telegram, telecopy, or forwarded by
prepaid registered or certified mail (return receipt requested) to the
party or parties at the following addresses (are at such other
addresses as shall be specified by like notices), and any notice,
however given, shall be effective when received:
To Employee: Brian N. Burns
1950 East Calle de Arcos
Tempe, Arizona 85284
To the Company: Quality Care Solutions, Inc.
5030 E. Sunrise Drive,
Phoenix, Arizona 85044
Attention: Chief Financial Officer
13.6 Waiver. The waiver by any party of a breach of any
provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach of the same provision or
any other provision of this Agreement.
13.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
13.8 Headings. The subject headings to the sections in this
Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
13.9 Survivorship. The provisions of Sections 1, 5, 6, 7, 8, 9
and 10 shall continue and shall survive the termination of the
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first hereinabove written.
EMPLOYEE: COMPANY:
/s/ Brian N. Burns
- ----------------------------- QUALITY CARE SOLUTIONS, INC.,
Brian N. Burns a Nevada corporation
By: /s/ Gregory S. Anderson
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Its: President
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