EXHIBIT 10.26
ALLSCRIPTS, LLC AND A4 HEALTH
SYSTEMS, INC.
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT, (this
“Agreement” ) is made as of this 28th day of
February, 2006, by and among Allscripts, LLC, a limited liability
corporation organized and existing under the laws of the State of
Delaware, with its principal place of business at 222 Merchandise
Mart, #2024, Chicago, Illinois 60654 (
“Allscripts” ), A4 Health Systems, Inc., a North
Carolina corporation, with its principal place of business at 5501
Dillard Drive, Cary, North Carolina 27511 (
“Company” ), and David Bond (
“Executive” ).
RECITALS
WHEREAS, Executive is President and Chief Operating
Officer of Company;
WHEREAS, Allscripts Healthcare Solutions, Inc., a
Delaware corporation ( “AHS” ), Quattro Merger
Sub Corp. ( “Sub” ), Company and the shareholder
representative named therein have entered into an Agreement of
Merger (the “Merger Agreement” ), which
provides, upon the terms and subject to the conditions thereof, for
the merger of Sub with and into Company (the
“Merger” );
WHEREAS, from and after the date of effectiveness of the
Merger (the “Effective Date” ), Company desires
to employ Executive as its President of SMB Solutions;
and
WHEREAS, Executive desires to be employed by Company in
the aforesaid capacity.
NOW, THEREFORE,
in consideration of the foregoing
premises, of the mutual agreements and covenants contained herein
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
AGREEMENT
1. Employment
.
Company hereby agrees to employ
Executive, and Executive hereby accepts employment, as President of
SMB Solutions of Company, pursuant to the terms of this Agreement.
Executive shall report directly to the Chief Executive Officer of
the Company and have the duties and responsibilities and perform
such administrative and managerial services of that position as are
set forth in the bylaws of Company (the “Bylaws”
) or as shall be reasonably delegated or assigned to Executive by
the Chief Executive Officer of Company from time to time. Executive
shall carry out Executive’s responsibilities hereunder on a
full-time basis for and on behalf of Company; provided that
Executive shall be entitled to devote time to personal investments,
civic and charitable activities, and personal education and
development, so long as such activities do not interfere with or
conflict with Executive’s duties hereunder. Notwithstanding
the foregoing, Executive agrees that, during the term of this
Agreement, Executive shall not act as an officer of any entity
other than Company without the prior written consent of
Company.
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2. Effective Date and Term
.
The initial term of
Executive’s employment by Company under this Agreement shall
commence as of the Effective Date and shall continue in effect for
a term of one (1) year, unless earlier terminated as provided
herein. Thereafter, this Agreement shall automatically renew for
additional and successive terms of one (1) year each, unless
either Company or Executive elects not to renew this Agreement upon
the expiration of the initial term or any renewal term by providing
written notice of such non-renewal to the other party at least one
hundred eighty (180) days prior to the expiration of the then
current term. As used herein, the term “Employment
Period” shall mean the period from the Effective Date
until the termination of the Agreement (i) for
non-renewal pursuant to this Section 2 or (ii)
pursuant to Section 4 herein. If the transactions
contemplated by the Merger Agreement are not consummated, this
Agreement shall be null and void. For purposes of this Agreement,
any notice of non-renewal by the Company which provides for
termination of Executive’s employment before the end of the
Employment Period or acceleration of Executive’s last day of
active employment or involves or gives rise to any grounds for
termination by Executive for Good Reason shall be deemed a
termination without Cause by the Company.
3. Compensation and
Benefits .
In consideration for the services
Executive shall render under this Agreement, Company shall provide
or cause to be provided to Executive the following compensation and
benefits:
3.1 Base Salary
. During the Employment
Period, Company shall pay to Executive an annual base salary at a
rate of $250,000 per annum, subject to all appropriate federal and
state withholding taxes, which base salary shall be payable in
accordance with Company’s normal payroll practices and
procedures; provided however, that if the Company meets or exceeds
the revenue and operating income budgeted amounts in the existing
2006 budget for each of the first two quarters of 2006,
Executive’s base salary shall increase from $250,000 to
$260,000 per annum, beginning in the third quarter of 2006.
Executive’s base salary shall be reviewed annually on each
anniversary of the Effective Date during the Employment Period by
the Chief Executive Officer of Company and may be increased (but
not decreased) in the sole discretion of the Chief Executive
Officer, based on Executive’s performance during the
preceding twelve-month period. Executive’s base salary, as
such base salary may be increased annually hereunder, is
hereinafter referred to as the “Base
Salary.”
3.2 Performance Bonus
. Executive shall be
eligible to receive a cash bonus with respect to each Fiscal Year
of Company that ends during the term of this Agreement (the
“Performance Bonus” ). Payment of the
Performance Bonus, if any, will be made in accordance with the
terms and conditions of Company’s management bonus plan, as
in effect from time to time, and in accordance with Company’s
budget. With respect to the 2006 Fiscal Year, the terms and
conditions of the management bonus plan and the targets for bonus
achievement will be established in a manner consistent with
Company’s 2005 management bonus plan. For purposes of this
Agreement, the term “Fiscal Year” shall mean the
fiscal year of Company, commencing on January 1 of each year
and ending on December 31.
3.3 Benefits .
During the Employment Period and as
otherwise provided hereunder, Executive shall be entitled to the
following:
3.3.1 Vacation . Executive shall be entitled to 20 business
days per full Fiscal Year of paid vacation, such vacation time not
to be cumulative ( i.e. , vacation time not taken in any
Fiscal Year shall not be carried forward and used in any subsequent
Fiscal Year). Executive shall also be entitled to paid holidays in
accordance with Company’s regular holiday
schedule.
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3.3.2 Participation in Benefit Plans
. Executive shall be entitled to
health and/or dental benefits, including immediate coverage for
Executive and Executive’s eligible dependents, which are
generally available to Company’s senior executive employees
and as provided by Company in accordance with its group health
insurance plan coverage. In addition, Executive shall be entitled
to participate in any profit sharing plan, retirement plan, group
life insurance plan, disability plan or other insurance plan or
medical expense plan or other plan or program maintained by Company
for its senior executives generally, in accordance with the general
eligibility criteria therein. Executive’s service with the
Company prior to the Effective Date shall be taken into account for
all vesting and eligibility purposes under any such plans or
programs.
3.3.3 Perquisites . Executive shall be entitled to such other
benefits and perquisites that are generally available to
Company’s senior executive employees and as provided in
accordance with Company’s plans, practices, policies and
programs for senior executive employees of Company.
3.4 Expenses .
Company shall reimburse Executive
for proper and necessary expenses incurred by Executive in the
performance of Executive’s duties under this Agreement from
time to time upon Executive’s submission to Company of
invoices of such expenses in reasonable detail and subject to all
standard policies and procedures of Company with respect to such
expenses.
3.5 Stock-Based Awards
. Executive shall be
eligible to participate in any applicable stock bonus, stock
option, or similar plan implemented by Allscripts and generally
available to its senior executive employees (each, a
“Plan” ). Awards will be made at the discretion
of the Chief Executive Officer of Allscripts, subject to approval
by the Board of AHS.
3.6 Special Bonus
. On the Effective Date
and in consideration in part for the covenants set forth in
Section 5 hereof, Company shall pay to Executive a bonus in
the amount of $550,000 (the “Special Bonus” ),
subject to all appropriate federal and state withholding
taxes.
4. Termination of the
Agreement Prior To the Expiration .
This Agreement and the Employment
Period may be terminated at any time as follows (the effective date
of such termination hereinafter referred to as the
“Termination Date” ):
4.1 Termination upon Death or
Disability of Executive .
4.1.1 This Agreement and the Employment Period shall
terminate immediately upon the death of Executive. In such event,
Executive’s estate (or named beneficiary) shall have the
right to receive payment of the amounts set forth in
Section 4.4.3 of the Agreement.
4.1.2 Company may terminate this Agreement and the
Employment Period upon the disability of Executive. For purposes of
this Agreement, Executive shall be deemed to be
“disabled” if Executive, as a result of illness or
incapacity, shall be unable to perform substantially
Executive’s required duties for a period of three
(3) consecutive months or for any aggregate period of three
(3) months in any six (6) month period. In the event of a
dispute as to whether Executive is disabled, the determination of
disability shall be made by the concurring opinions of two
reasonably qualified licensed practicing physicians (one of
Company’s choice and the other of Executive’s choice,
with each party being responsible for the costs of the physician
selected by such party), and Executive agrees to submit to such
tests and examination as such physicians shall deem appropriate to
determine Executive’s capacity to perform the services
required to be performed by Executive hereunder. In such event, the
parties hereby agree that the concurring opinions of such
physicians as to the disability of Executive shall be final and
binding on the parties. Any termination of the Agreement under this
Section 4.1.2 shall be effected without any adverse effect on
Executive’s rights to receive benefits under any disability
policy of Company, but shall not be treated as a termination
without cause.
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4.2 Termination by Company for
Cause . Company may
terminate this Agreement and the Employment Period for Cause (as
defined herein) upon written notice to Executive, which termination
shall be effective on the date specified by Company in such notice;
provided however, that Executive shall have a period of ten
(10) days (or such longer period not to exceed 30 days as
would be reasonably required for Executive to cure such action or
inaction) after the receipt of the written notice from Company to
cure the particular action or inaction, to the extent a cure is
possible. For purposes of this Agreement, the term
“Cause” shall mean:
4.2.1 any willful refusal by Executive to
substantially perform Executive’s duties and obligations
hereunder, other than any such failure resulting from the
disability of Executive;
4.2.2 any intentional act of fraud, embezzlement or
theft by Executive in connection with Executive’s duties
hereunder or in the course of Executive’s employment
hereunder or any prior employment or Executive’s admission or
conviction of a felony or any crime involving moral turpitude,
fraud, embezzlement, theft or misrepresentation;
4.2.3 any gross negligence or willful misconduct of
Executive resulting in a loss to Company or any of its affiliates
or damage to the reputation of Company or any of its
affiliates;
4.2.4 any breach by Executive of any of the covenants
contained in Section 5 hereof;
4.2.5 any violation of any statutory or common law
duty of loyalty to Company or any of its affiliates; or
4.2.6 Executive’s material violation of any
generally recognized policy of AHS or Company, Executive’s
willful refusal to follow the lawful directions of the Chief
Executive Officer of Company or the Board of AHS.
Notwithstanding the foregoing, any
notice and lapse of time period provided in this Section 4.2
shall not be required with respect to any event or circumstance
which is the same or substantially the same as an event or
circumstance with respect to which notice and an opportunity to
cure has been given within the previous six
(6) months.
4.3 Termination without Cause
or by Executive for Good Reason .
4.3.1 Termination without Cause
. Either party may terminate this
Agreement and the Employment Period without Cause upon thirty
(30) days prior written notice to the other party. If either
party elects not to renew this Agreement for any renewal period
pursuant to Section 2 hereof, such election shall not
constitute a termination of the Employment Period without
Cause.
4.3.2 Termination by Executive for Good
Reason . Executive may
terminate this Agreement and the Employment Period for Good Reason
(as hereinafter defined). For purposes hereof, “Good
Reason” shall mean (i) any material diminishment in
Executive’s authority, responsibilities or compensation
without Executive’s consent that is not cured within thirty
(30) days after Executive shall have provided written notice
of such diminishment to the Board of Directors of AHS or
(ii) AHS’s requirement that Executive be based at any
office or location more than thirty (30) miles from where
Executive is employed on the Effective Date, other than for travel
that is reasonably required in the performance of Executive’s
duties.
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4.4 Rights upon
Termination . Upon
termination of this Agreement and the Employment Period, the
following shall apply:
4.4.1 Termination by Company without Cause or by
Executive for Good Reason . If Company terminates the Employment Period
without Cause (other than a non-renewal by Company under
Section 2) or if Ex
