EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT
(“Agreement”), dated this August 11, 2008, has been made and entered
into by and between Quality Systems, Inc., a California corporation (“Employer”) and Xxxxxx
Xxxxxxxxx, an individual (“Employee”).
R E C I T A L
S
The Employer desires to employ
Employee and Employee desires to perform the duties and obligations hereinafter
described for the Employer upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of
the mutual covenants and conditions herein contained and their performance,
Employer and Employee agree as follows:
AGREEMENT
1. Duties. For
the employment term, as set forth in Section 2, Employer
hereby agrees to employ Employee and Employee agrees to serve Employer in the
capacity of President and Chief Executive Officer.
2. Effective
Date; Term. The effective date of this Agreement shall be
August 16, 2008, immediately upon resignation of existing CEO. This
term of this Agreement shall renew annually unless (i) either party hereto shall
provide no less than 30 days advance written notice to the other of its intent
not to renew, or (ii) it is earlier terminated as provided herein.
3. Base
Salary. The base salary shall be $475,000 per fiscal year,
prorated for fiscal year 2009 ($296,875 for remainder of fiscal year 2009); paid
monthly in accordance with the Company’s standard payroll
practices.
4. Signing
Equity Payment. Employee shall receive a signing equity
payment of 50,000 nonqualified options to be granted on Monday, August 18, 2008,
with an exercise price equal to the fair market value of the Company’s common
stock at the close of trading on such date. The nonqualified options
shall be issued from one of the Company’s existing shareholder approved option
plans, have a term of 5 years and vest in 4 equal annual installments and have
such other terms and conditions as those contained in the Company’s standard
stock option grant agreements as filed with the SEC.
5. Bonus
Opportunity. Employee shall be eligible for cash bonus and
equity bonus amounts in accordance with the principles, terms and
conditions of the Company’s existing 2009 Bonus Compensation Plan as
filed with the SEC, provided, however, (i) the maximum cash bonus amount shall
be $475,000 prorated for fiscal year 2009 ($296,875 for remainder of fiscal year
2009) and (ii) the maximum number of options which may be earned is 50,000
prorated for
fiscal
year 2009 (31,250 options for remainder of fiscal year 2009) and (iii) the
required number of acquisitions shall be prorated ( 1 acquisition for the
remainder of fiscal year 2009).
6. Vacation.
Vacation shall be 3 weeks per year prorated for fiscal year 2009 (9 business
days for remainder of fiscal year 2009).
7. Change of
Control Provisions. All options granted to Employee in
accordance with Section 4 above shall
immediately vest upon (i) a sale of substantially all of the equity or assets of
the Company or a merger where the beneficial owners of the Company’s equity
securities immediately prior to such merger no longer constitute a majority of
the beneficial ownership immediately thereafter (a “Sale Transaction”); and (ii)
Employee agrees to be employed by the buyer in such Sale Transaction for a
period of no less than one year after the closing thereof. If upon a
Sales Transaction, Employee is not offered a position with the buyer in such
Sales Transaction, Employee shall be paid a lump sum equal to one year’s base
salary as then in effect.
8. Termination
Without Cause; Notice of Early Termination.
(a) If
the Company should terminate Employee’s employment without “cause” as may be
determined by the Board of Directors, then Employee shall be entitled to receive
from the Company upon the date of such termination a lump sum payment equal to
(i) one year’s base salary as then in effect, and (ii) a pro-rated cash bonus
equal to that percentage of the fiscal year completed at the date of your
termination multiplied by the cash bonus actually earned under the Company’s
fiscal year compensation plan as filed with the SEC payable to the CEO of the
Company at the end of such fiscal year (for example, if Employee’s employment is
terminated 50% through the fiscal year, then if the Company’s performance for
the entire fiscal year would require a cash bonus payment to the CEO of $50,000
for such entire year, Employee would be paid $25,000); such payment to be made
upon the date other bonuses are actually paid under the then existing
compensation plan. As used herein, the term “cause” shall mean (i)
Employee’s willful breach or neglect of the duties and obligations required of
him either expressly or impliedly by the terms of this Agreement (including, but
not limited to refusal to execute Employer’s standard confidential information
agreement); or (ii) Employee’s commission of fraud, embezzlement or
misappropriation, involving the Company whether or not a criminal or civil
charge is filed in connection therewith.
(b) In
the event Employee or the Company elects to terminate Employee’s employment with
the Company, he/it, as the case may be, shall provide no less than 30 days
written notice prior to the effective date of such termination.
9. Expenses. In
addition to the salary provided in Section 3, Employee
shall be entitled to reimbursement for necessary and reasonable business
expenses incurred in connection with the performance of his duties hereunder
pursuant to procedures and policies adopted by the Board of Directors of
Employer.
10. Faithful
Execution of Duties. Employee agrees that so long as he shall
be an employee pursuant to this Agreement, he shall perform his services
hereunder faithfully, diligently and to the best of his skill and ability, and
he shall devote full time and interest to the
business
and affairs of Employer. Employee also agrees that during such period he shall
not, without Employer’s prior written consent, engage in any employment or any
business other than for Employer, which consent shall not be unreasonably
withheld.
11. Board
Approval Required. This agreement is subject to approval by
the Board of Directors of the Company.
12. General
Provisions.
12.1 Notices. All notices and
other communications hereunder shall be in writing and, unless otherwise
provided herein, shall be deemed to have been duly given if delivered or mailed,
first class postage prepaid:
(i)
|
If
to Employer:
|
|
Quality
Systems, Inc.
|
||
00000
Xxx Xxxxxx, Xxxxx 000
|
||
Xxxxxx,
XX 00000
|
||
Attention:
Chief Financial Officer
|
||
(ii)
|
If
to Employee:
|
|
Xxxxxx
Xxxxxxxxx
|
||
00
Xxxxxxxxx
|
||
Xxxx
xx Xxxx, XX 00000
|
12.2 Assignment.
The rights and duties of Employee under this Agreement shall not be subject to
alienation, assignment or transfer, whether voluntary or involuntary. Employer,
however, may assign this Agreement to any corporation that
may succeed to the business and assets of Employer, and any such successor
corporation may similarly assign this Agreement, provided that any such assignee
expressly assumes all obligations of Employer hereunder.
12.3 Entire
Agreement. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof, and no changes in, additions to
or modifications of this Agreement shall be valid unless set forth in writing
and signed by each of the parties.
12.4 Supersedes
Prior Agreements. This Agreement cancels and supersedes all prior
employment agreements, oral or written, between Employer and
Employee.
12.5 Captions.
The captions used in this Agreement are intended solely for convenience of
reference and shall not in any manner amplify, limit, modify or otherwise be
used in the construction or interpretation of any of the provisions
hereof.
12.6 Severability.
If any term of this Agreement or any application thereof
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability
of the
remaining terms contained herein and any other application of said terms shall
not in any way be affected or impaired thereby.
12.7 Applicable
Law. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of California.
In the event of litigation arising out of this Agreement, jurisdiction shall be
proper either in the State of California or in the State in which Employee is
employed.
12.8 Legal
Action and Fees. In the event of any controversy, claim or dispute
between the parties hereto arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover from the nonprevailing party his
reasonable expenses, including, but not limited to, reasonable attorneys’
fees.
IN WITNESS WHEREOF, the undersigned
have executed this Agreement on the date first above written.
EMPLOYER:
QUALITY
SYSTEMS, INC.
a California
corporation
By: /s/ Xxxx
Xxxx
Its: Chief Financial Officer
|
EMPLOYEE:
/s/ Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
|