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Exhibit 10.31
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into this 28th day of July
2000, by and between William A. Knaus, M.D. (the "Executive") and APACHE
MEDICAL SYSTEMS, INC. (the "Company").
WHEREAS, Executive currently is employed by the University of Virginia; and
WHEREAS, Executive wishes to take a leave of absence from such employment and
be employed during such leave of absence by the Company; and
WHEREAS, the Company wishes to retain the services of the Executive during such
period;
NOW, THEREFORE, in consideration of the promises and mutual agreements made
herein, and intending to be legally bound hereby, the Company and Executive
(collectively, the "Parties") agree as follows:
1. Employment Term. Subject to Section 5, the term of this Agreement
shall be from July 1, 2000, through December 31, 2000 (the "Term"). Should the
Parties wish to extend this Agreement beyond December 31, 2000, the Parties
shall enter into a renewal agreement delineating the terms and conditions of
Executive's employment no later than November 30, 2000.
2. Employment Duties. Executive will serve as President and Chief
Executive Officer of the Company subject to the direction and control of the
Board of Directors. Executive shall be fully responsible for all facets of the
Company's operations, with all of the Company's employees reporting to
Executive, either directly or indirectly. Executive agrees to perform and
discharge the duties assigned to him to the Board's reasonable satisfaction. In
performing such duties, Executive agrees to comply fully with all of the
Company's policies and standards and to follow
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the lawful instructions and directives of the Board of Directors. Executive
agrees to devote his full professional time, skills and best efforts to the
business of the Company and will not, during the term of this Agreement, engage
(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 authorization of the
Board of Directors, or its designee.
3. Compensation. For all services rendered by Executive under this
Agreement, the Company will pay Executive a base salary of $12,825 per month,
in equal bi-weekly installments. The Company shall withhold federal and state
income and employment taxes from the salary amounts it disburses to Executive
under this Section.
4. Benefits.
(a) Executive shall continue to participate in the University of
Virginia's health insurance, retirement and life insurance plans, and will not
participate in any of the like benefit plans of the Company, and the Company
shall pay to Executive $3,388.55 per month (the "Benefit Continuation
Payment"), which he shall be solely responsible for paying as full
reimbursement to the University of Virginia in order to maintain his health,
retirement and life insurance benefits at their current level.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred in connection with the performance of his duties under this Agreement
pursuant to the Company's standard business expense reimbursement policies.
5. Termination.
(a) For Cause. Notwithstanding any other provision of this Agreement,
the Company may terminate this Agreement and Executive's employment hereunder
for cause at any time without notice. For purposes of this Agreement, "cause"
shall mean Executive's (i) conviction of any felony, or of a misdemeanor
involving fraud, dishonesty, or moral turpitude; (ii) becoming unable to
perform the essential functions of his position for a period of ninety (90)
days by reason of mental or physical incapacity or disability; (iii) breach of
fiduciary duty to the
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Company; (iv) gross negligence or willful misconduct in the course of his
duties to the Company; or (v) breach of Sections 6, 7 or 8 of this Agreement.
If this Agreement and Executive's employment are terminated pursuant to this
Section 5(a), the Company's obligations under this Agreement shall cease, and,
except as required by applicable law, Executive shall have no right to receive
any other compensation or benefits under this Agreement, except that he shall
be entitled to his base salary for services rendered through the date of
termination.
(b) Without Cause. Notwithstanding any other provision of this
Agreement, the Company may terminate this Agreement and Executive's employment
hereunder without cause by providing Executive thirty (30) days written notice,
provided that in the event of such termination, Executive shall be entitled to
continuation of his base salary and payment by the Company of the Benefit
Continuation Payment for the remainder of the Term.
6. Confidentiality.
(a) In the course of performing his duties under this Agreement,
Executive will have access to "Confidential Information." Executive agrees and
acknowledges that this Confidential Information constitutes a valuable and
unique asset of the Company and that its protection is of critical importance
to the Company. To ensure that such Confidential Information is adequately
protected, Executive agrees as follows:
i. Confidential Information is owned by the Company and is to
be held by Executive in trust and solely for the benefit of
the Company;
ii. he shall not disclose or otherwise make available such
Information to any person or entity without the prior
written authorization of the Board of Directors of the
Company, except as necessary for the performance of
Executive's duties under this Agreement;
iii. he shall not in any way use such Confidential Information
for the gain or advantage of Executive or others or to the
detriment of the Company; and
iv. upon termination of this Agreement, he shall promptly return
any
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and all such Confidential Information to the Company and shall
continue to abide by the confidentiality provisions of this Section.
(b) For purposes of this Agreement, "Confidential Information" shall
include, but not be limited to, information that has been created, discovered,
developed, or otherwise become known to APACHE (including, without limitation,
information created, discovered, developed, or made known by Executive during
the Term) or in which property rights have been assigned or otherwise conveyed
to APACHE, which information has commercial value in the business in which
APACHE is or may become engaged. By way of illustration, but not limitation,
Confidential Information includes trade secrets, processes, structures,
formulas, data and know-how, improvements, inventions, product concepts,
techniques, marketing plans, strategies, forecasts, customer lists and
information about APACHE's employees or consultants (including without
limitation, the compensation, job responsibility and job performance of such
employees or consultants). Additionally, Confidential Information shall include
certain information that has been made known to APACHE from third parties,
including, but not limited to, patient identifying information, physician
identifying information, information that would link a client's name to
individual data, and any information protected by a confidentiality agreement
or terms and conditions of an agreement regarding confidentiality.
7. Non-Competition.
(a) Executive agrees and acknowledges that the Company has a
legitimate and necessary interest in protecting its goodwill, customer and
client relationships, and Confidential Information. Consistent with that
interest, Executive agrees that during the term of this Agreement and for a
period of twelve (12) months following the expiration of the Term or any
earlier termination of this Agreement and Executive's employment hereunder
(collectively, the "Restricted Period"), he will not, directly or indirectly,
own, manage, control, participate in, consult with, render services to or
otherwise engage in any Competitive Business, or solicit or assist any other
person to engage in any Competitive Business.
(b) For purposes of this Agreement, "Competitive Business" is defined
as (i) all entities or individuals with whom the Company has a contract to
provide support and services;
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(ii) entities or individuals that the Company has identified on its key
prospect list at the time Executive's employment with the Company terminates;
or (iii) any other business engaged in developing, selling, licensing or
otherwise merchandising computer programs, databases and related manuals,
service and/or know-how for the purpose(s) of: (A) managing the quality and
utilization of patient care or related services using outcomes management
applications; or (B) assessing and/or predicting mortality, and other treatment
outcomes of hospital patients or outpatients; or (C) otherwise recording
patient health factors in connection with predicting their treatment, managing
clinical productivity or containing costs through the use of outcomes
management applications.
(c) Ownership of not more than three percent (3%) of the outstanding
securities of any class of any corporation that is listed on a national
securities exchange or traded in the over-the-counter market shall not
constitute ownership of a Competitive Business within the meaning of this
Agreement.
(d) If the Company expands, diminishes or changes the scope of its
business during the term of this Agreement, the definition of Competitive
Business hereunder will be considered automatically revised to incorporate any
such expansion, diminution or change.
8. Non-Solicitation.
(a) Executive agrees that during the Restricted Period, he will not,
directly or indirectly, without the prior written consent of the Company,
solicit or attempt to solicit business from any individual or entity who is
then or was at any time during Executive's employment with the Company a
customer of the Company.
(b) Executive agrees that during the Restricted Period, he will not,
directly or indirectly, without the prior written consent of the Company,
solicit or induce any employee of the Company to leave the employ of the
Company or hire for any purpose any employee of the Company. For purposes of
this Agreement, an "employee" includes any individual who is then an employee
of the Company or has been an employee of the Company at any time during the
preceding six (6) months.
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9. Representation by Executive. Executive represents and warrants that he
is not now under any obligation of a contractual or other nature to any person
or entity, including without limitation the University of Virginia, which is
inconsistent or in conflict with this Agreement or which would prevent him from
performing his obligations under this Agreement.
10. Remedies. Executive agrees and acknowledges that the violation of any
of the covenants or agreements contained in Sections 6, 7 and 8 would cause
irreparable injury to the Company, that the remedy at law for such violation or
threatened violation would be inadequate, and that the Company will be
entitled, in addition to any other remedy, to temporary injunctive or other
equitable relief without the necessity of proving actual damages or posting a
bond.
11. Notices. Any notice or communication under this Agreement will be in
writing and sent by registered or certified mail addressed to the respective
parties as follows:
If to the Company: APACHE Medical Systems, Inc.
1650 Tysons Blvd.
Suite 300
McLean, VA 22102
Attn: Thomas W. Hodson,
Chairman of the Board of Directors
If to Executive: William A. Knaus, M.D.
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Executive shall notify the Company by certified mail of any change in his
address, and thereafter, the Company shall forward any notices under this
Agreement to Executive at such new address.
12. Entire Agreement. This Agreement embodies the entire agreement of the
Parties relating to Executive's employment and supersedes all prior agreements,
oral or written. No amendment or modification of this Agreement shall be valid
or enforceable unless made in writing and signed by the Parties.
13. Assignment. This Agreement is one for personal services and may not be
assigned by
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Executive to a third party.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
15. Severability. Should one or more of the provisions of this Agreement
be held invalid or unenforceable by a court of competent jurisdiction, such
provisions or portions thereof shall be ineffective only to the extent of such
invalidity or unenforceability, and the remaining provisions of this Agreement
or portions thereof shall nevertheless be valid, enforceable and remain in full
force and effect. The Company's rights under this Agreement shall not be
exclusive and shall be in addition to all other rights and remedies available
at law or in equity.
16. Survival. Notwithstanding the expiration or any termination of this
Agreement and Executive's employment hereunder, those provisions of Sections 5,
6, 7 and 8 that contemplate performance thereafter shall continue in full force
and effect.
/s/ William A. Knaus /s/Thomas Hodson
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William A. Knaus, M.D. APACHE MEDICAL SYSTEMS, INC.
By: Thomas Hodson
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7-28-00 7/31/00
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Date Date
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