This Employment Agreement (the "Agreement") is made and entered into this 30th day of January, 1998, by and between MEDAPHIS CORPORATION, a Delaware corporation (the "Company"), and William Dagher, a resident of the State of Alabama (the "Employee").
Statement of Background Information
The Company renders to hospitals, physicians, and/or other healthcare organizations and providers: (a) billing services, accounts receivable management services, collection services, electronic claims services, financial management services, and practice and facilities management services: (b) eligibility verification and certification for Medicaid, Medicare and other healthcare assistance programs; " filing and other medical claims securitization services; (d) medical coverage information services; and (e) medical and insurance claims monitoring and tracking services (collectively the "Processing Business").
The Company also: (a) develops, markets and licenses to hospitals, integrated healthcare delivery systems, and other healthcare providers and other end users (collectively "Providers"), (I) strategic, operational and financial information systems and services and decision support tools for healthcare providers, (ii) software systems which provide claims and reimbursement services and electronic claims processing, and (iii) software applications which assist Providers with automated scheduling and resource management (the items discussed in Sections (a)(I), (a)(ii) and (a)(iii) of this paragraph are referred to as "Systems"), which Systems include, but are not limited to, nurse scheduling and management information systems, operating room patient scheduling and surgery information systems, enterprise wide patient scheduling and resource management systems, enterprise-wide employee scheduling and management information systems and related software interfaces to other information systems; and (b) provides to Providers installation and support services related to the Company"s Systems (the "Systems Business").
The Company also renders professional services with respect to the development of computer software, algorithms, design, documentation, and related materials, and the development, design, deployment, and operation of local and wide area computer networks, all in conjunction with the sale, design, deployment, operation and maintenance of custom computer processing systems for improvement of operational efficiency or functionality through the use of image storage and processing, work flow technology, optical character recognition or other related technologies (the "System Integration Business") (the Processing Business, the Systems Business, the Systems Integration Business and any other distinct business segment in which the Company engages during Employee"s employment are collectively referred to herein as the "Business").
In consideration of the mutual covenants, promises and conditions set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 2 1. Employment. The Company hereby employs Employee and Employee hereby accepts such employment upon the terms and conditions set forth in this Agreement. For purposes of Sections 7 and 8 of this Agreement, "employment" shall mean any period of time during which the Company is paying the Employee salary, wages, or any other amounts, whether or not the Employee is currently performing services for the Company at the time of such payment.
2. Duties of Employee. Employee"s title will be Senior Vice President, Chief Information Officer of Medaphis Corporation. Employee agrees to perform and discharge such duties as may be assigned to Employee from time to time by the Company to the reasonable satisfaction of the Company. Employee also agrees to comply with all of the Company's policies, standards and regulations and to follow the instructions and directives of Employee's superiors within the Company, as promulgated by the officers of the Company. Employee will devote Employee's full professional and business-related time, skills and best efforts to such duties and will not, during the term of this Agreement, be engaged (whether or not during normal business hours) in any other business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage, without the prior written consent of Carl James Schaper, or his designee, which consent will not be unreasonably withheld. This Section will not be construed to prevent Employee from (a) investing personal assets in businesses which do not compete with the Company in such form or manner that will not require any services on the part of Employee in the operation or the affairs of the companies in which such investments are made and in which Employee's participation is solely that of an investor; (b) purchasing securities in any corporation whose securities are listed on a national securities exchange or regularly traded in the over-the-counter market, provided that Employee at no time owns, directly or indirectly, in excess of one percent (1%) of the outstanding stock of any class of any such corporation engaged in a business competitive with that of the Company; or " participating in conferences, preparing and publishing papers or books or teaching, so long as Carl James Schaper, or his designee, approves such participation, preparation and publication or teaching prior to Employee's engaging therein, which approval will not be unreasonably withheld.
3. Term. The term of this Agreement will be for a two (2) year period of time, commencing as of February 1, 1998 and expiring on January 31, 2000, subject to earlier termination as provided for in Section 4 of this Agreement. Following the initial two (2) year term of this Agreement, the terms of this Agreement will continue to remain in effect for additional terms of one (1) year, unless either party gives notice of the intent to terminate this Agreement at least ninety (90) days prior to the expiration of the original term or any renewal term of this Agreement.
(a) Termination by Company for Cause. Notwithstanding anything contained in Section 3 to the contrary, the Company may terminate this Agreement and all of its obligations hereunder immediately if any of the following events occur: 3 (i) Employee materially breaches any of the terms or conditions set forth in this Agreement and fails to cure such breach within ten (10) days after Employee's receipt from the Company of written notice of such breach (notwithstanding the foregoing, no cure period shall be applicable to breaches by Employee of Sections 6, 7 or 8 of this Agreement);
(ii) Employee engages in dishonest or illegal activities or commits or is convicted of any crime involving fraud, deceit or moral turpitude; or
(iii) Employee dies or becomes mentally or physically incapacitated or disabled so as to be unable to perform Employee's duties under this Agreement. Without limiting the generality of the foregoing, Employee's inability to adequately perform services under this Agreement for a period of sixty (60) consecutive days will be conclusive evidence of such mental or physical incapacity or disability, unless such inability to adequately perform services under this Agreement is pursuant to a mental or physical incapacity or disability covered by the Family Medical Leave Act, in which case such sixty (60)-day period shall be extended to a one hundred and twenty (120)-day period.
(b) Termination by Company Without Cause. Notwithstanding anything contained in Section 3 to the contrary, the Company may terminate Employee's employment pursuant to this Agreement without cause upon at least thirty (30) days' prior written notice to Employee. In the event Employee's employment with the Company is terminated by the Company without cause, Employee will be entitled to receive salary continuation and health benefit continuation (at the salary and benefit level set forth below in Paragraph 5) for the balance of the term of this Agreement, or nine (9) months of salary continuation, whichever amount is greater. If Employee is terminated without cause under this Paragraph of the Agreement, Employee will not be entitled to any other consideration or be considered an employee of the Company for any other purposes, including the vesting of stock options, beyond the termination date.
(c) Change in Control. In the event there is a change in control of Medaphis Corporation, and (I) Employee"s employment is terminated as a direct result of such change of control, or (ii) Employee suffers a material change in the terms and conditions of his employment (defined as (a) a material reduction (greater than 10%) in Employee"s then current base salary; (b) a change in Employee"s existing work location to a work location more than 50 miles from Employee"s existing work location, except for required travel on the Company"s business to an extent consistent with Employee"s then present business travel obligations; or " an assignment to any duties inconsistent in a material adverse respect with Employee"s then current position, duties, or responsibilities, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by Employee) within one (1) year of such change in control, Employee will be entitled to receive a payment equal to the greater of (1) nine (9) months of salary continuation at Employee"s then current base salary, or (2) those payments due and owing to Employee under the remaining term of this Agreement, whichever is greater. For purposes of this Agreement, a "change in control" of Medaphis Corporation shall be deemed to occur upon any of the following: 4 (i) a consolidation or merger of Medaphis Corporation with or into any other corporation, or any other entity or person, other than a wholly-owned subsidiary of Medaphis Corporation, excluding any transaction in which stockholders of Medaphis Corporation prior to the transaction will maintain voting control or own at least 50% of the resulting entity after the transaction;
(ii) any corporate reorganization, including an exchange offer, in which Medaphis Corporation shall not be the continuing or surviving entity resulting from such reorganization, excluding any transaction in which stockholders of the Medaphis Corporation prior to the transaction will maintain voting control or own at least 50% of the resulting entity after the transaction; or
(iii) the sale of a substantial portion of Medaphis Corporation"s assets, which sha