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Exhibit 10.1
SECOND AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (hereinafter this
“Agreement”) is made effective as of August 2,
2007 (the “Effective Date”), between Mediware
Information Systems, Inc., (hereinafter the
“Company”) and John Damgaard (hereinafter the
“Executive”).
WHEREAS,
the Executive is a current employee of the Company, and now
the Company desires to employ the Executive as the Senior Vice
President and Chief Operating Officer of the Company, or in
such other capacity as the parties may agree, and the
Executive desires to be so employed by the Company, on the
terms and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements herein set forth, the
Company and the Executive hereby agree as
follows:
1.
Employment . The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve as the
Senior Vice President and Chief Operating Officer, or in such
other capacity as the parties may mutually agree. The
Executive agrees to perform such services customary to such
office as shall from time to time be assigned to him by the
Chief Executive Officer or his designee. The Executive further
agrees to use his best efforts to promote the interests of the
Company and to devote his full energies to the business and
affairs of the Company.
2.
Term of Employment . The employment hereunder shall be
for a term of thirty-six months commencing on the Effective
Date hereof and ending thirty-six months after the Effective
Date hereof (the “Expiration Date”), unless
terminated earlier pursuant to Paragraph 4 of this Agreement
(the “Term of Employment”). This Agreement shall
automatically renew for successive terms of one (1) year (each
a “Renewal Term”) commencing on the first day
immediately following the Expiration Date, unless such renewal
is objected to by either the Company or the Executive by
giving at least 90 days prior written notice prior to the
scheduled Expiration Date. In the event of such renewal, the
last day of each successive Renewal Term shall be deemed the
Expiration Date.
3.
Compensation and Other Related Matters .
(a)
Salary . As compensation for services rendered
hereunder, the Executive shall receive an annual base salary
of two hundred twenty-five thousand dollars ($225,000), which
salary shall be paid in accordance with the Company’s
then prevailing payroll practices for its executives and shall
be subject to review annually by the Chief Executive Officer
and the Compensation Committee of the Board of Directors,
which may include annual increases (the “Annual Base
Salary”).
(b)
Bonus . During the term of this Agreement the Executive
shall be eligible to receive an annual bonus of up to fifty
percent (50%) of Executive’s Annual Base Salary for
achieving objectives established by the Company, subject to
the discretion of the Chief Executive Officer and the
Compensation Committee of the Board of Directors (the
“Annual Bonus”). The bonus, if any,
would be payable after the conclusion of the annual
audit.
(c)
Equity Compensation .
Performance Shares . The Executive is hereby granted forty-five
thousand (45,000) restricted shares of the
Company’s common stock (the “Performance Shares”)
subject to the terms of the 2003 Equity Incentive Plan, any
applicable restricted stock agreement and the vesting requirements
set forth on Attachment A.
Options . The Executive is hereby granted thirty
thousand (30,000) non-qualified stock options to purchase the
Company’s common stock (the “Stock
Options”). Ten thousand (10,000) Stock Options,
subject to the terms of the 2003 Equity Incentive Plan and any
applicable stock option agreement, shall vest on each of the first,
second, and third anniversary of the date of grant as provided on
Attachment A.
(d)
Other Benefits . The fringe benefits, perquisites and
other benefits of employment, including four (4) weeks
vacation each year, to be provided to the Executive shall be
equivalent to such benefits and perquisites as are provided to
other senior executives of the Company as amended from time to
time.
(e)
Reimbursement . Subject to policies established from
time to time by the Company, the Company shall
reimburse Executive
for the reasonable expenses incurred by him in connection with
the performance of his duties hereunder, including but not
limited to, travel expenses and entertainment expenses, for
which the Executive shall account to the Company in a manner
sufficient to conform to Company policy and Internal Revenue
Service requirements. If the Company requires
Executive to relocate, the Company will pay Executive’s
reasonable moving expenses.
4.
Termination .
(a)
Disability . If, as a result of the incapacity of the
Executive due to physical or mental illness, the Executive is
unable to perform substantially and continuously the duties
assigned to him hereunder for a period of three (3)
consecutive months or for a non-consecutive period of nine (9)
months during the Term of Employment, the Company may
terminate his employment for “Disability” upon
thirty (30) days prior written notice to the
Executive.
(b)
Death . The Executive’s employment shall
terminate immediately upon the death of the
Executive.
(c)
Cause . The Company shall be entitled to terminate the
Executive’s employment for “Cause.”
Termination by the Company of the employment of the Executive
for “Cause” shall mean termination based upon (i)
the willful failure by the Executive to follow directions
communicated to him by the Chief Executive Officer or his
designee; (ii) the willful engaging by the Executive in
conduct which is materially injurious to the Company,
monetarily or otherwise; (iii) a conviction of, a plea of
nolo contendere, a guilty plea or confession by the
Executive to an act of fraud, misappropriation or embezzlement
or to a felony; (iv) the Executive’s habitual
drunkenness or use of illegal substances; (v) a material
breach by the Executive of this Agreement; or (vi) an act of
gross neglect or gross misconduct which the Company deems in
good faith to be good and sufficient
cause. Executive hereby represents and warrants
that he has never been convicted of an act of fraud,
misappropriation, embezzlement or a felony, and Executive
further warrants that during the term of this Agreement, he
will give the Company immediate notice of any charge against
the Executive relating to any of the foregoing.
(d)
Termination Without Cause . The Executive shall have
the right to terminate the Executive’s employment
without cause at any time upon three months written
notice. The Company shall have the right to
terminate the Executive’s employment without cause at
any time upon written notice. The giving of notice
by either party pursuant to Section 2 to prevent the renewal
of this Agreement shall not be deemed a termination of
Executive’s employment without cause.
5.
Compensation Upon Termination or During Disability
.
(a)
Disability . During any period that the Executive fails
to perform his full-time duties with the Company for a
three-month period as a result of incapacity due to physical
or mental illness (the “Disability Period”), the
Executive shall continue to receive his Annual Base Salary at
the rate set forth in Paragraph 3(a) of this Agreement, less
any compensation payable to the Executive under the applicable
disability insurance plan of the Company during the Disability
Period, until this Agreement is terminated pursuant to
Paragraph 4(a) hereof. Thereafter, or in the event the
Executive’s employment shall be terminated by reason of
his death, the Executive’s benefits shall be determined
under the Company’s insurance and other compensation
programs then in effect in accordance with the terms of such
programs and the Company shall have no further obligation to
the Executive under this Agreement.
(b)
Death . In the event of the Executive’s death,
the Executive’s beneficiary shall be entitled to receive
the Executive’s Annual Base Salary at the rate set forth
in Paragraph 3(a) of this Agreement until the date of his
death. Thereafter, the Company shall have no further
obligation to the Executive or the Executive’s
beneficiary under this Agreement.
(c)
Cause . If the Executive’s employment shall be
terminated by the Company for “Cause” as defined
in Paragraph 4(c) of this Agreement, the Company shall
continue to pay the Executive his Annual Base Salary at the
rate set forth in Paragraph 3(a) of this Agreement through the
date of termination of the Executive’s employment.
Thereafter, the Company shall have no further obligation to
the Executive under this Agreement.
(d)
Termination Without Cause . If the Executive terminates
his employment pursuant to Paragraph 4(d), the Executive shall
be entitled to receive Executive’s Annual Base Salary at
the rate set forth in Paragraph 3(a) of this Agreement until
the date Executive’s employment
ends. Thereafter the Company shall have no
obligation to Executive. If the Company voluntarily
terminates the Executive’s employment with the Company
pursuant to Paragraph 4(d) of this Agreement, the Company
shall until the earlier of the six month anniversary of the
termination of employment or the commencement of
Executive’s employment at a successor employer, pay the
Executive an amount equal to six months of the
Executive’s Annual Salary at the highest rate in effect
during the period of the Executive’s employment, payable
in six equal monthly installments. Additionally, until the
earlier of the six month anniversary of the termination of
employment, or the commencement of the provision of health
benefits to the Executive by a successor employer, the
Employer will pay for all COBRA health premiums to ensure that
Executive continues to receive the same coverage of health
insurance as immediately before the date of the termination.
Thereafter, the Executive acknowledges that the Company shall
have no further obligation to the Executive under this
Agreement. Notwithstanding the foregoing, the
Company shall only be obligated to make the payments set forth
in this section after the Executive delivers to the Company an
executed Release and Severance Agreement, which shall be
substantially in the form of Employer’s standard Release
and Severance Agreement for all employees, with such changes
therein or additions thereto as needed under then applicable
law to give effect to its intent and purpose. After
the Executive is no longer receiving benefits from the
Company, the Executive shall be eligible for COBRA at
Executive’s own expense in accordance with applicable
law.
(e)
Acquisition or Sale of Company . If a third
party described in Paragraph 5(f) of this Agreement terminates
the Executive due to “an acquisition or sale of the
Company,” as described in Paragraph 5(f) below, the
Company shall pay the Executive an amount equal to three
months of Executive’s Annual Base Salary at the rate in
effect at the date of termination of the Executive’s
employment during the period of the Executive’s
employment, payable in three equal monthly installments. Until
the earlier of the three months after the termination of
employment, or the commencement of the pro
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