EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 27, 2005 (the "Agreement") by and between
Netsmart Technologies, Inc., a Delaware corporation with its principal office at
3500 Sunrise Highway, Suite D-122, Great River, New York 11739 (the "Company"),
and A. Sheree Graves, residing at 236 18th Avenue S.W., St. Petersburg, FL
33705 (the "Employee").
WITNESSETH:
WHEREAS, simultaneously herewith, the Company and ContinuedLearning,
LLC ("Seller") have entered into an Asset Purchase Agreement (the "Purchase
Agreement") pursuant to which the Company purchased substantially all of the
assets of Seller (the "Business");
WHEREAS, pursuant to, and as a condition of, the Purchase Agreement,
the Company shall employ Employee on the terms and conditions hereinafter set
forth;
WHEREAS, the Company desires to obtain the benefits of Employee's
knowledge, skill and ability in connection with managing certain of the
operations of the Company and the Business and to employ Employee on the terms
and conditions hereinafter set forth; and
WHEREAS, Employee desires to provide her services to the Company and to
accept employment by the Company on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the parties agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions hereinafter set forth,
the Company hereby employs the Employee as Business Unit Director of Continued
Learning and Employee hereby accepts such employment. During the Term (as
hereinafter defined), the Employee shall report to the Company's President, or
such other executive officer as may be designated by the Company, and Employee
shall perform such duties and responsibilities as are customarily associated
with such position, and have such other duties and responsibilities consistent
with such position as the Company may assign to Employee from time to time.
(b) Unless terminated earlier as provided for in Paragraph 3
of this Agreement, the term of this Agreement shall be for an initial period
commencing as of the date of this Agreement and ending two (2) years from the
date hereof ("Term"). The Term may be extended by the mutual written agreement
of the parties, entered into prior to the end of the Term. Not later than thirty
(30) days prior to the end of the Term, the parties shall discuss the extension
of the Agreement, and if agreed upon in writing, any such extension shall become
an amendment to this Agreement, and the word "Term" shall be deemed to include
the period of time by which the Agreement is so extended.
(c) During the Term, Employee agrees to devote all of
Employee's business time and attention to the performance of Employee's duties
under this Agreement, and shall perform such duties diligently, in good faith
and in a manner consistent with the best interests of the Company.
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2. Compensation and Other Benefits.
(a) For Employee's services to the Company, the Company shall
pay Employee a salary ("Salary") at the annual rate of $100,000 (One Hundred
Thousand Dollars). The Salary shall be payable in such installments as the
Company regularly pays its employees, but not less frequently than semi-monthly.
(b) Employee shall be entitled to receive a commission in an
amount equal to Two Percent (2%) of all recurring revenue actually received by
the Business from customers other than those listed on Schedule A hereto.
(c) Employee shall be entitled to receive payments of up to
Three Hundred Thousand Dollars ($300,000) based upon the Business achieving each
of the following recurring revenue targets during the first two years of the
Term:
a. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $700,000;
b. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $800,000;
c. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $900,000;
d. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $1,000,000;
e. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $1,100,000;
f. $50,000 in any fiscal year in which the recurring revenue
equals or exceeds $1,200,000.
(d) In addition to Salary, Employee shall receive three (3)
weeks vacation in each calendar year. Vacation shall be pro-rated for periods of
less than one calendar year. Any vacation not taken shall be forfeited.
(e) Employee shall be entitled to participate in all medical
and other welfare plans maintained by the Company pursuant to the terms of such
plans as in effect from time-to-time during the Term.
(f) The Company shall pay or reimburse Employee, upon
presentation of proper expense statements, for all authorized, ordinary and
necessary out-of-pocket expenses reasonably incurred by Employee in connection
with the performance of Employee's services pursuant to this Agreement hereunder
in accordance with the Company's expense reimbursement policy.
(g) Employee shall be entitled to participate in the Company's
stock option plan, as determined by the Board of Directors of the Company, and
in accordance with the participation of the Company's other managers on a
similar level.
3. Termination of Employment.
(a) The Employee's employment hereunder shall terminate
immediately upon the death of the Employee.
(b) The Employee's employment may be terminated by the
Employee or the Company on not less than thirty (30) days' written notice in the
event of Employee's Disability. The term "Disability" shall mean any illness,
disability or incapacity of the Employee which prevents Employee from
substantially performing Employee's regular duties for a period of two (2)
consecutive months or three (3) months, even though not consecutive, in any six
(6) month period.
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(c) The Company may terminate Employee's employment,
immediately and without notice, for Cause. The term "Cause" shall mean (i) a
material breach by the Employee of the provisions of Paragraphs 4, 5, 6 or 8(a)
of this Agreement, (ii) an act of dishonesty or deliberate misconduct, (iii)
breach of trust or other action by which Employee obtains personal gain at the
expense of or to the detriment of the Company, (iv) failure to perform customary
duties of Employee's position following notice from the Company or (v)
conviction of the Employee of any felony or any other crime.
(d) In the event that the Employee's employment is terminated
due to her death, the Employee's estate shall be entitled to receive one-half of
her Salary for the balance of the Term and any portion of the payments provided
for in Section 2(c) that were accrued but unpaid at the time of Employee's
death. In the event that the Employee's employment is terminated due to her
Disability, Employee shall be entitled to receive her Salary through the date of
termination and any portion of the payments provided for in Section 2(c) that
were accrued but unpaid at the time of Employee's Disability. Except as provided
in this subsection and in subsection 3(g) below, Employee or her estate, as
applicable, shall not be entitled to receive any additional compensation of any
nature whatsoever.
(e) In the event that the Employee's employment is terminated
other than due to her death, Disability or for Cause the Employee shall be
entitled to receive her Salary for the balance of the Term. Except as provided
in this subsection and in subsection 3(g) below, Employee shall not be entitled
to receive any additional compensation of any nature whatsoever.
(f) In the event that the Employee's employment is terminated
for Cause, Employee shall be entitled to receive her Salary through the date of
such termination. Except as provided in subsection 3(g) below, Employee shall
not be entitled to receive any additional compensation of any nature whatsoever.
(g) In the event of any termination of Employee's employment,
including termination for Cause, Employee shall be entitled to all rights under
the Company's benefit plans which had vested as of the date of termination of
such employment.
4. Trade Secrets and Proprietary Information. Employee agrees that
Employee will not, during or after the Term of this Agreement, use or disclose
to any person, firm, corporation, partnership, business trust, individual or
other business entity any trade secrets or proprietary information concerning
the Company's or any of its subsidiaries' business, including, without
limitation, their products, services, budgets, business plans, proposed products
and services, marketing strategy and research and development activities;
provided, that nothing in this Agreement shall be construed to prohibit Employee
from using or disclosing such information if it shall become public knowledge,
other than by or as a result of disclosure by a person not having a right to
make such disclosure.
5. Inventions and Discoveries. Employee agrees promptly to disclose in
writing to the Company any invention or discovery made by Employee during the
Term, whether during or after working hours, while using the Company's
facilities, or relating to any business in which the Company or any of its
subsidiaries is then engaged, or in which it or a subsidiary has advised
Employee it plans to engage, or which otherwise relates to any matter or product
or service dealt in by the Company or any subsidiary, or relates in any manner
to the Company's or any subsidiary's businesses, and such inventions and
discoveries shall be the Company's sole property. Upon the Company's request,
Employee shall execute and assign to the Company all applications for copyrights
and patent letters of the United States and such foreign countries as the
Company may designate, and Employee shall execute and deliver to the Company
such other instruments as the Company deems necessary to vest in the Company the
sole ownership of all exclusive rights in and to such inventions and
discoveries, as well as the copyrights and/or patents. If services in connection
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with applications for copyrights and/or patents are performed by Employee at the
Company's request after the termination of his employment, the Company shall pay
him reasonable compensation for such services rendered after termination of this
Agreement.
6. Covenant Not to Solicit or Compete. Employee covenants and agrees
that from the date hereof and for a period of one (1) year after termination of
this Agreement, Employee will not:
(a) engage in any business, whether as officer, employee,
consultant, partner, guarantor, principal, agent, employee, advisor or in any
manner, which directly competes with the business of the Company as it is
engaged in at the time of the termination of this Agreement, unless at the time
of such termination or thereafter during the non-competition period the Company
ceases to be engaged in such activity; or
(b) solicit, or advise anyone else to solicit, as an employee
or consultant, anyone employed by the Company, or who is acting as a consultant
to the Company at the time of the termination of Employee's employment or during
the six (6) month period prior to such termination.
7. Injunctive Relief. Employee agrees that Employee's violation or
threatened violation of any of the provisions of Paragraphs 4, 5 and 6 of this
Agreement shall cause immediate and irreparable harm to the Company. In the
event or any breach or threatened breach of said provisions, Employee consents
to the entry of preliminary and permanent injunctions by a court of competent
jurisdiction prohibiting such party from any violation or threatened violation
of these provisions and compelling Employee to comply with these provisions.
This Paragraph 7 shall not affect or limit, and the injunctive relief provided
in this Paragraph 7 shall be in addition to, any other remedies available to the
Company at law or in equity. In the event an injunction is issued against any
such conduct by Employee, the period referred to in Paragraph 6 of this
Agreement shall continue until the later of the expiration of the period set
forth therein or one (1) month from the date a final judgment enforcing such
provisions is entered and the time for appeal has lapsed.
8. Miscellaneous.
(a) Employee represents, warrants, covenants and agrees that
Employee has a right to enter into this Agreement, that Employee is not a party
to any agreement or understanding, oral or written, which would prohibit
performance of Employee's obligations under this Agreement, and that Employee
will not use in the performance of Employee's obligations hereunder any
proprietary information of any other party which Employee is legally prohibited
from using.
(b) Any notice under the provisions of this Agreement shall be
given in writing and by hand, overnight courier or messenger service, against
signed receipt or acknowledgment of receipt, registered or certified mail,
return receipt requested, to the parties at their respective addresses set forth
at the beginning of this Agreement, with notice to the Company being sent to the
attention of the individual who executed this Agreement on behalf of the
Company. Either party may, by like notice, change the person or address to which
notice should be sent.
(c) If any term, covenant or condition of this Agreement or
the application thereof to any party or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term, covenant or condition to parties or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Agreement shall be valid and be
enforced to the fullest extent permitted by law, and any court having
jurisdiction may reduce the scope of any provision of this Agreement so that it
complies with applicable law.
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(d) This Agreement constitutes the entire agreement of the
Company and Employee as to the subject matter hereof, superseding all prior
written or prior or contemporaneous oral understanding or agreements, including
any previous employment agreements, or understandings with respect to the
subject matter covered in this Agreement. This Agreement may not be modified or
amended, nor may any right be waived, except by a writing which expressly refers
to this Agreement, states that it is intended to be a modification, amendment or
waiver and is signed by both parties in the case of a modification or amendment
or by the party granting the waiver. No course of conduct or dealing between the
parties and no custom or trade usage shall be relied upon to vary the terms of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(e) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors, executors,
administrators, and assigns.
(f) The headings in this Agreement are for convenience of
reference only and shall not affect in any way the construction or
interpretation of this Agreement.
(g) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to contracts made
and to be performed wholly within such State.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NETSMART TECHNOLOGIES, INC. EMPLOYEE
Name: /s/ James L. Conway /s/ A. Sheree Graves
------------------------ ------------------------
Title: Chief Executive Officer
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Schedule A
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Existing Customers
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Bay-Arenac Community Mental Health $ 5,500
Cape Counseling $ 6,000
Chesterfield CSB $ 7,500
City of Alexandria - MHMRS $ 7,500
Coleman Professional Services, Inc. $ 6,000
Community Counseling Ctrs of Chicago
(C4 $ 7,500
Community Services Group $ 15,000
Denali Family Services $ 7,500
FamilyLinks $ 6,000
Geminus $ 6,000
Grafton, Inc. $ 18,500
Grand Prairie Services $ 5,000
Heritage Behavioral Health $ 7,500
Life Management Center $ 5,000
Meridian Behavioral Healthcare $ 26,000
Montcalm Center
Oaklawn Psychiatric Center, Inc. $ 11,000
Ohio Council
Open Minds $ 45,000
PALMS - JWB - Operation PAR $ 7,500
Peak Wellness Center $ 7,500
ProtoCall $ 4,500
Sacred Heart Rehabilitation $ 5,500
Shiawassee County CMH $ 6,000
Smoky Mountain Center $ 3,500
Southeast, Inc. $ 7,500
Southlake Center for Mental Health $ 5,000
Southwest Counseling Center, Inc. $ 6,000
Spectrum of Supportive Services
Thresholds $ 17,000
Tri-City Comprehensive CMHC, Inc. $ 5,000
PALMS / JWB $ 60,000
Mass. Council of Human Service Providers $150,000
Total $477,500