Exhibit (10)
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT made as of the 13th
day of May, 1999 by and between SHARED MEDICAL SYSTEMS CORPORATION, a Delaware
corporation ("SMS") and R. Xxxxx Xxxxxxxx ("Employee").
WHEREAS, since the founding of SMS Employee has rendered valuable services
to SMS;
WHEREAS, in further consideration for such services the parties hereto
entered into a Deferred Compensation Agreement dated January 1, 1977 (the "1977
Agreement") to provide for certain deferred benefits for Employee pursuant to
an arrangement that also provides certain advantages to SMS;
WHEREAS, the Management and Compensation Committee of the Board of
Directors of SMS has approved a new deferred compensation agreement for Employee
to replace the 1977 Agreement and directed the appropriate officers of SMS to
prepare such new agreement;
WHEREAS, this Amended and Restated Deferred Compensation Agreement has been
prepared to amend and restate the 1977 Agreement in its entirety in accordance
with the directions of the Management and Compensation Committee;
NOW, THEREFORE, in consideration of Employee's past services and of the
mutual promises herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. SMS agrees to pay to Employee, subsequent to the termination of
Employee's employment with SMS for any reason (other than for conduct deemed by
the Board of Directors of SMS to have been fraudulent against SMS) a monthly
payment of $4,500, payable on the first day of each month, for a period of 240
months (resulting in a total payment of $1,080,000). Should Employee die while
he is receiving such payments, and before the last payment to him by SMS
hereunder, the payments shall be continued in their entirety to Employee's
beneficiary, as designated as Exhibit A (the "Beneficiary"). (Employee shall
have the right from time to time to change the Beneficiary by appropriate
written notice to SMS). Employee shall give the SMS Board of Directors
(the "Board") at least three months' prior notice in writing of the termination
of his employment, through normal retirement or otherwise. Should Employee give
SMS less than three months' prior notice, Employee shall forfeit to SMS an
amount, from the first payments to be made hereunder, equal to one month's
payment times the difference between three months and the number of full months'
notice actually given. The first month's payment under this paragraph shall be
made on the first day of the month following the month in which employment
terminated; provided however that the first payment shall not be payable prior
to the expiration of a three-month period following the date of Employee's
notice of the termination of his employment.
2. Should Employee die (while employed by SMS or otherwise), prior to the
beginning of payments under paragraph 1, above, to which he would otherwise have
been entitled, then such monthly payments shall be made to Employee's
Beneficiary, starting on the first day of the month following the month in which
the Employee's death occurred.
3. Employee agrees that he will not enter into competition with SMS at any
time from the date hereof through a period of two years after the completion of
the payments listed in Exhibit A. Employee shall be deemed to be in competition
if he directly or indirectly, whether as consultant, agent, officer, director,
holder of at least 1% of a class of equity security, employee or otherwise
enters into an association with another business enterprise which then is one of
the competitors of SMS respecting one or more of SMS' business activities. The
parties agree that one of the essential considerations for the deferred
compensation provided Employee hereunder is to protect and preserve the good
will of SMS and its respective enterprises, and that said good will would be
substantially diminished in value if Employee were to enter into competition
with SMS while this Agreement is in effect or for two years thereafter. As SMS'
business activities are national in scope, the prohibition against competition
relates to any competitor wherever it may be located within the United States.
In the event Employee is deemed to be in competition contrary to the provisions
of this paragraph, thereupon he shall forfeit all rights to any unmade payments
of deferred compensation under this Agreement.
4. The benefits payable under this Agreement shall be independent of, and
in addition to, any other agreement relating to Employee's employment that may
exist from
time to time between the parties hereto, or any other compensation payable by
SMS to Employee, whether salary, bonus or otherwise. This Agreement shall not be
deemed to constitute a contract of employment between the parties hereto, nor
shall any provision hereof, except as expressly stated, restrict the right of
SMS to discharge Employee or restrict the right of Employee to terminate his
employment.
5. This Agreement shall be binding upon SMS, it successors and assigns.
Employee may not assign this Agreement or any of his rights hereunder, except
that he may designate a beneficiary to receive payments in the event of his
death as provided herein.
6. SMS in its discretion may apply for and procure as owner and for its
benefit insurance on the life of Employee, in such amounts and in such forms as
SMS may choose. Employee shall have no interest whatsoever in any such policy or
policies, but at the request of SMS he shall submit to medical examinations and
supply such information and executes such documents as may be required by the
insurance company or companies to whom SMS has applied for insurance. The rights
of Employee, or his beneficiary, or estate, to benefits under this Agreement
shall be solely those of an unsecured creditor of SMS. Any insurance policy or
other assets acquired or held by SMS in connection with the liabilities assumed
by it pursuant to this Agreement shall not be deemed to be held under any trust
for the benefit of Employee, a beneficiary of his estate, or to be security for
the performance of the obligations of SMS. This Agreement may be cancelled by
SMS if insurance procured by SMS under this paragraph is cancelled by the
insurance company because of misrepresentation by Employee.
7. This Agreement shall be governed by the laws of Pennsylvania.
/S/ Xxxxxx X. Xxxxx /S/ R. Xxxxx Xxxxxxxx
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WITNESS EMPLOYEE
SHARED MEDICAL SYSTEMS
CORPORATION
By:/S/ Xxxxxxxx X. Xxxx
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Name:
Title:
