EXHIBIT 10.5
EMPLOYMENT AGREEMENT
(▇▇▇▇ ▇▇▇▇▇)
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the 2nd day of August, 1999 (the "Effective Date"), by and between APPLIED
VOICE RECOGNITION, INC., a Delaware corporation doing business as ▇-▇▇▇▇.▇▇▇
("Employer"), and ▇▇▇▇ ▇▇▇▇▇, an individual residing in Houston, ▇▇▇▇▇▇ County,
Texas ("Employee").
W I T N E S S E T H:
WHEREAS, Employer and Employee desire to enter into an agreement
regarding Employee's employment with Employer pursuant to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties covenant and agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby accepts
employment with Employer on the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. The term of Employee's employment hereunder (the
"Term") shall commence as of August 2, 1999 (the "Commencement Date") and shall
continue (subject to termination by either Employer or Employee or extension by
Employer and Employee, all as hereinafter provided) for an initial term (the
"Initial Term") of three (3) years expiring on August 1, 2002 (the "Expiration
Date"). Each year hereof, prior to the anniversary date of this Agreement, the
Board of Directors (acting through the Compensation Committee, if deemed
appropriate by such board) shall review the performance of Employee and the
extent to which Employee has reached his performance goals set by the
Compensation Committee of the Board of Directors. Following such review, the
Board of Directors shall consider the extension of the Term for an additional
year and upon written consent of both Employer and Employee, such Term shall be
extended. The Expiration Date shall be automatically extended unless terminated
by Employer or Employee for successive one-year periods following the expiration
of the Initial Term. If Employer desires to terminate Employee's employment
under this Agreement at the end of the Initial Term or at the end of any
succeeding one year term, Employer shall give written notice of such desire to
Employee at least one month prior to the expiration of the Initial Term or any
succeeding one year term. If Employee desires to terminate Employee's employment
under this Agreement at the end of the Initial Term or at the end of any
succeeding one year term, Employee shall give written notice of such desire to
Employer at least one month prior to the expiration of the Initial Term or any
succeeding one year term. At the expiration of the then-existing term, Employer
shall have no further obligation to Employee other than
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and unpaid Base Salary (as hereafter defined) under Section 3(a) and any earned
and unpaid Bonus (as hereafter defined) under Section 3(b), and Employee shall
have no further obligation to Employer except as set forth in Sections 7, 8, 9
and 10.
3. COMPENSATION AND OTHER BENEFITS.
a. As compensation for all services rendered by Employee in performance of
Employee's duties or obligations under this Agreement, Employer shall pay
Employee a monthly base salary of TWENTY THOUSAND EIGHT HUNDRED THIRTY-THREE AND
33/100 DOLLARS ($20,833.33) (the "Base Salary"). Employee's Base Salary shall be
payable in equal semi-monthly installments or in the manner and on the timetable
which Employer's payroll is customarily handled or at such intervals as Employer
and Employee may hereafter agree to from time to time. Employee's salary may,
but is not required to, be increased from time to time, based upon Employee's
performance and other relevant factors, as Employer may deem appropriate,
without affecting any other provisions of this Agreement.
b. In addition to receiving the Base Salary provided for in Section 3(a),
(i) for the period beginning with the Commencement Date through December 31,
1999, Employee shall be entitled to a bonus of up to fifty percent (50%) of
Employee's Base Salary paid during such period, and (ii) for each twelve month
period thereafter, Employee shall be entitled to a bonus of up to one hundred
percent (100%) of Employee's Base Salary; provided, however, Employee shall be
entitled to such bonus if, and only if, Employee has met the performance
criteria set by the Compensation Committee of the Board of Directors of Employer
(the "Compensation Committee") for the applicable period. Criteria set by the
Compensation Committee shall be set on a quarterly basis for the quarters ending
September 30, December 31, March 31 and June 30, and bonuses earned pursuant
hereto shall be on a quarterly basis. Employee acknowledges that the criteria
for the period between the Commencement Date and December 31, 1999 have been set
by the Compensation Committee and are attached hereto as EXHIBIT "A". Employer
agrees that performance criteria for Employee's bonus to be earned commencing
January 1, 2000 shall be set on or before January 1 of each year, and Employee
shall have the opportunity to meet with and discuss such criteria with the
Compensation Committee prior to the finalization of such criteria. Upon
completion of the criteria for the applicable year, such criteria shall be
communicated to Employee in writing. If Employee successfully meets the
performance criteria established by Employer (in the discretion of Employer),
Employer shall pay to Employee the bonus within thirty (30) days of the end of
the applicable quarterly period.
c. Employee shall be entitled to be reimbursed by Employer for all
reasonable and necessary expenses incurred by Employee in carrying out
Employee's duties under this Agreement in accordance with Employer's standard
policies regarding such reimbursements.
d. Beginning with the Commencement Date, Employee shall be entitled during
the Term, upon satisfaction of all eligibility requirements, if any, to
participate in
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all health, dental, disability, life insurance and other benefit programs now or
hereafter established by Employer which cover substantially all other of
Employer's employees and shall receive such other benefits as may be approved
from time to time by Employer.
e. During the Term, Employee shall be entitled to receive three weeks of
paid vacation. In addition, Employee shall be entitled to receive paid holidays
as enjoyed by all other employees of Employer.
f. Employee shall be entitled to receive a country club allowance of up to
$5,000 per year.
g. Employee shall be entitled to reimbursement from Employer for all
expenses incurred in maintaining a dedicated facsimile and internet access line
for business use in Employee's residence.
h. If Employee's employment is terminated by Employer with or without
cause, following such termination, Employee shall be entitled to reimbursement
for the reasonable costs of relocating and moving his household from Houston,
Texas to Thomasville, North Carolina, including the cost of up to one-half of
any brokerage commissions arising out of the sale of his Houston residence. The
aggregate amount of such reimbursement shall not exceed $50,000. In the event
such move does not take place within one year of the termination of Employee's
employment hereunder, the provisions of this Section 3(h) shall terminate and be
of no further force or effect.
i. Employee shall be entitled to a reimbursement of costs of financial and
tax planning by Employee reasonably required in Employee's discretion as a
result of this Agreement, such reimbursement to be limited to $5,000 during the
first year and $2,500 for each year thereafter.
j. Employee shall be entitled to a disability policy at the expense of
Employer that provides for payments in the amount of one-half of Employee's Base
Salary during such period as Employee is disabled, as set forth in and subject
to the limitations contained in such policy.
4. DUTIES.
a. Employee is employed to act as Chief Executive Officer and President of
the Employer or in such other office or position as shall be assigned to
Employee from time to time by Employer, and to perform such duties as are
commensurate with Employee's position with Employer.
b. Employee agrees that during the period of employment, Employee shall
devote full-time efforts to Employee's duties as an employee of Employer and
Employee shall use Employee's best efforts to perform the duties of Employee's
position in an efficient and
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competent manner and shall use Employee's best efforts to promote the interests
of Employer and any affiliated companies.
c. During the period of employment, Employee agrees not to (i) solely or
jointly with others undertake or join any planning for or organization of any
business activity competitive with the business activities of Employer, and (ii)
directly or indirectly, engage or participate in any other activities in
conflict with the best interests of Employer.
d. Employee agrees that during the period of employment Employee shall
refer to Employer all opportunities to which Employee might become exposed in
carrying out Employee's duties and responsibilities hereunder that relate to
voice recognition or medical transcription.
e. So long as Employee is the Chief Executive Officer of Employer,
Employee shall be entitled to be a member of the Board of Directors of Employer.
Employee's election to the Board of Directors of Employer shall be undertaken at
the first meeting of the Board of Directors of Employer that is held after the
Effective Date.
5. STOCK OPTION PLAN. As a further inducement to Employee to accept
employment upon the terms set forth herein and in consideration of Employee's
execution of this Agreement, Employee shall be granted options entitling
Employee to purchase 1,500,000 shares of Employer's common stock, par value
$0.001 (the "Options"), pursuant to, and Employee shall be entitled to otherwise
participate in, that certain Applied Voice Recognition, Inc. 1997 Incentive
Plan, as amended from time to time (the "Option Plan"). To the extent sufficient
options are not available under the Option Plan, Employer agrees to take all
reasonable steps to make such options available as soon as is reasonably
practicable. The granting instrument for the Options will provide, in addition
to other terms set forth therein, that (i) the purchase price for the Options
shall be $_____ per share, (ii) one-third of the Options (being options to
purchase 500,000 shares) shall vest on the first anniversary date of the
Commencement Date, and (iii) one twenty-fourth (1/24th) of the remaining Options
(being options to purchase 41,666 shares) shall vest on the last day of each
month following the first anniversary date of the Commencement Date until all
such Options have vested by August 1, 2002.
6. TERMINATION OF EMPLOYMENT. Employee's employment and this Agreement shall
terminate upon the earliest to occur of any of the following events (the actual
date of such termination being referred to herein as the "Termination Date"):
a. The termination of the Agreement pursuant to Section 2.
b. Employee's employment pursuant hereto shall terminate in the event of
the death of Employee.
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c. Employer may terminate Employee's employment under this Agreement for
cause without any prior notice (except as set forth in subparagraph (3) below),
upon the occurrence of any of the following events:
(1) any embezzlement or wrongful diversion of funds of Employer or any
affiliate of Employer by Employee;
(2) gross malfeasance by Employee in the conduct of Employee's duties;
(3) breach of this Agreement and the failure to cure such breach
following reasonable notice thereof;
(4) gross neglect by Employee in carrying out Employee's duties; or
(5) the failure of Employee to be able to perform Employee's duties
hereunder for a period of not less than ninety (90) days by reason of
disability. For purposes of this Agreement, Employee shall be deemed to
have become disabled when the Board of Directors of Employer, upon the
advice of a qualified physician, shall have determined that Employee has
become physically or mentally incapable (excluding infrequent and
temporary absences due to ordinary illness) of performing Employee's
duties under this Agreement. Before making any termination decision
pursuant to this Section 6(c)(5), the Board of Directors of Employer shall
determine whether there is any reasonable accommodation (within the
meaning of the Americans with Disabilities Act) which would enable
Employee to perform the essential functions of Employee's position under
this Agreement despite the existence of any such disability. If such a
reasonable accommodation is possible, Employer shall make that
accommodation and shall not terminate Employee's employment hereunder
based on such disability.
d. If Employee's employment is terminated for any of the reasons specified
in Section 6(b), (c) or (e), Employer shall no longer be obligated to make the
payments specified under Section 3 or to pay to Employee any other compensation
or benefits whatsoever, except as may otherwise be provided in Section 6(e).
Notwithstanding the foregoing, if for any reason Employee's employment is
terminated hereunder, any compensation payable under Sections 3(a) or 3(b) which
shall have been earned but not yet paid shall be paid by Employer to Employee or
Employee's estate, as the case may be.
e. Employer shall have the right to terminate Employee's employment
hereunder without prior notice and without cause; provided, however, (i) if such
termination occurs with one year or more remaining in the Term, Employee shall
continue to receive one-half of his Base Salary for twenty-four (24) months
following the date of such termination, and (ii) if
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such termination occurs with less than one year remaining in the Term, Employee
shall continue to receive one-half of his Base Salary for the number of full
months remaining in the Term times two (the actual term in which Employee is to
receive his partial Base Salary after such termination being referred to as the
"Severance Term"). In the event of such termination, Employer shall pay for
Employee's COBRA benefits for the lesser of the Severance Term or the maximum
period in which Employee is eligible to receive COBRA; however, in no event
shall Employer be required to pay in excess of $500 per month toward such COBRA
benefits. In the event Employee is terminated without cause as provided in this
Section 6(e), Employee shall not be eligible to receive the Bonus for any
quarter beyond the quarter in which Employee's employment is terminated. If
Employee's employment under this Agreement is terminated by Employer under this
Section 6(e), any Options that would otherwise vest on or before the next
vesting period (be it annual or monthly) shall automatically become fully vested
immediately upon termination; however, any additional unvested Options shall be
cancelled upon termination. If Employee is terminated without cause and a Change
in Control occurs as described in Section 13 within six (6) months after the
termination date, then the benefits of Section 13 shall apply.
7. INVENTIONS AND CREATIONS BELONG TO EMPLOYER.
a. Any and all inventions, discoveries, improvements or creations
(collectively, "Creations") which Employee has conceived or made or may conceive
or make during the period of employment in any way, directly or indirectly,
connected with Employer's business shall be the sole and exclusive property of
Employer. Employee agrees that all copyrightable works created by Employee or
under Employer's direction in connection with Employer's business are "works
made for hire" and shall be the sole and complete property of Employer and that
any and all copyrights to such works shall belong to Employer. To the extent any
of the works described in the preceding sentence are not deemed to be "works
made for hire," Employee hereby assigns all proprietary rights, including
copyright, in these works to Employer without further compensation.
b. Employee further agrees to (i) disclose promptly to Employer all such
Creations which Employee has made or may make solely, jointly or commonly with
others during the period of employment to the extent connected with Employer's
business, (ii) assign all such Creations to Employer, and (iii) execute and sign
any and all applications, assignments or other instruments which Employer may
deem necessary in order to enable Employer, at Employer's expense, to apply for,
prosecute and obtain copyrights, patents or other proprietary rights in the
United States and foreign countries or in order to transfer to Employer all
right, title and interest in said Creations.
8. CONFIDENTIALITY; OWNERSHIP OF INFORMATION. Employer promises that Employer
will, during the Term, provide Employee with access to such Confidential
Information (as defined in Section 8(a)) owned by Employer and that is used in
the operation of Employer's business as reasonably necessary to allow Employee
to perform Employee's obligations hereunder. Employee acknowledges that Employer
has agreed to provide Employee with a
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definite term of employment and with access to such Confidential Information of
Employer during that term of employment.
a. DEFINITION. For purposes of this Agreement, "Confidential Information"
means any and all information relating directly or indirectly to Employer that
is not generally ascertainable from public or published information or trade
sources and that represents proprietary information to Employer, excluding,
however, (i) Employees' business contacts, (ii) information already known to
Employee prior to Employee's employment with Employer, and (iii) information
required to be divulged in any legal or administrative proceeding in which
Employee is involved. Confidential Information shall consist of, for example,
and not intending to be inclusive, (A) software (source and object codes),
algorithms, computer processing systems, techniques, methodologies, formulae,
processes, compilations of information, drawings, proposals, job notes, reports,
records and specifications, and (B) information concerning any matters relating
to the business of Employer, any of its customers, prospective customers,
customer contacts, licenses, the prices it obtains or has obtained for the
licensing of its software products and services, or any other information
concerning the business of Employer and Employer's good will.
b. NO DISCLOSURE. During the Term and at all times thereafter, Employee
shall not disclose or use in any manner, directly or indirectly, and shall use
Employee's best efforts and shall take all reasonable precautions to prevent the
disclosure of, any such trade secrets or other Confidential Information, except
to the extent required in the performance of Employee's duties or obligations to
Employer hereunder or by express prior written consent of a duly authorized
officer or director of Employer (other than Employee).
c. OWNERSHIP OF INFORMATION. Such Confidential Information is and shall
remain the sole and exclusive property and proprietary information of Employer
or Employer's customers, as the case may be, and is disclosed in confidence by
Employer or permitted to be acquired from such customers in reliance on
Employee's agreement to maintain such Confidential Information in confidence and
not to use or disclose such Confidential Information to any other person except
in furtherance of Employer's business.
d. RETURN OF MATERIAL. Upon the expiration or earlier termination of this
Agreement for any reason, Employee shall immediately turn over to Employer all
documents, disks or other magnetic media, or other material in Employee's
possession or under Employee's control that (i) may contain or be derived from
Creations or Confidential Information, or (ii) are connected with or derived
from Employee's services to Employer. Employee shall not retain any Confidential
Information in any form (e.g., computer hard drive, microfilm, etc.) upon the
expiration or earlier termination of this Agreement.
9. NONCOMPETE; WORKING FOR COMPETITOR. In consideration of Employee's
employment by Employer, Employee will not, at any time during the Term or at any
time for twenty-four (24) months subsequent to any termination of Employee's
employment pursuant to the provisions of Section 6(c), any termination of
Employee's employment pursuant to Section
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6(e) or the voluntary termination of employment by Employee pursuant to Section
2, directly or indirectly, within the United States, for Employee's own account
or on behalf of any direct competitors of Employer, engage in any business or
transaction involving (i) the design, installation, integration, service or
consulting with respect to voice recognition software designs and applications,
or (ii) the transcription of medical records (whether as an employee, employer,
independent contractor, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity), without the prior written consent of Employer, which consent may be
withheld by Employer in Employer's sole and absolute discretion.
10. NON-SOLICITATION OF EMPLOYEES. During the Term and for a period of
twenty-four (24) months after the date of termination of employment, Employee
will not in any way, directly or indirectly (i) induce or attempt to induce any
employee of Employer to quit employment with Employer; (ii) otherwise interfere
with or disrupt Employer's relationship with its employees; (iii) solicit,
entice or hire away any employee of Employer; or (iv) hire or engage any
employee of Employer or any former employee of Employer whose employment with
Employer ceased less than one year before the date of such hiring or engagement.
Employee acknowledges that any attempt on the part of Employee to induce others
to leave Employer's employ, or any effort by Employee to interfere with
Employer's relationship with its other employees would be harmful and damaging
to Employer.
11. EMPLOYEE'S ACKNOWLEDGEMENT. It is the express intention of Employee and
Employer to comply with sections 15.50 ET SEQ. of the Texas Business and
Commerce Code in effect as of the date of execution hereof. Employee stipulates
that the provisions of this Agreement are not oppressive or overly burdensome to
Employee and will not prevent Employee from earning an income following
termination of this Agreement. Employee warrants and represents that:
a. Employee is familiar with non-compete and non-solicitation covenants;
b. Employee has discussed or acknowledges the opportunity to discuss the
provisions of the non-compete and non-solicitation covenants contained herein
with Employee's attorney and has concluded that such provisions (including,
without limitation, the right to equitable relief and the length of time
provided for herein) are fair, reasonable and just under the circumstances;
c. Employee is fully aware of the obligations, limitations and liabilities
included in the non-compete and non-solicitation covenants contained in this
Agreement;
d. The scope of activities covered hereby are substantially similar to
those activities to be performed by Employee under this Agreement;
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e. The twenty-four (24) month non-compete and non-solicitation period is a
reasonable restriction, giving consideration to the following factors: (1)
Employee and Employer reasonably anticipate that this Agreement, although
terminable under certain provisions, will continue in effect for sufficient
duration to allow Employee to attain superior bargaining strength and an ability
for unfair competition with respect to the customers covered hereby; (2) the
duration of the twenty-four (24) month non-compete and non-solicitation period
is a reasonably necessary period to allow Employer to restore its position of
equivalent bargaining strength and fair competition with respect to those
customers covered hereby; and (3) historically, employees of all types have
remained with Employer for a duration of longer than the duration of the
twenty-four (24) month non-compete and non-solicitation period; and
f. The limitations contained in this Agreement with respect to geographic
area, duration and scope of activity are reasonable; however, if any court shall
determine that the geographic area, duration or scope of activity of any
restriction contained in this Agreement is unenforceable, it is the intention of
the parties that such restrictive covenants set forth herein shall not thereby
be terminated, but shall be deemed amended to the extent required to render such
covenants valid and enforceable.
12. REMEDIES; INJUNCTION. In the event of a breach or threatened breach by
Employee of any of the provisions of this Agreement, Employee agrees that
Employer, in addition to and not in limitation of any other rights, remedies or
damages available to Employer at law or in equity, shall be entitled to a
permanent injunction without the necessity of proving actual monetary loss in
order to prevent or restrain any such breach by Employee or by Employee's
partners, agents, representatives, servants, employees and/or any and all
persons directly or indirectly acting for or with Employee. It is expressly
understood between the parties that this injunctive or other equitable relief
shall not be Employer's exclusive remedy for any breach of this Agreement, and
Employer shall be entitled to seek any other relief or remedy which it may have
by contract, statute, law or otherwise for any breach hereof.
13. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have occurred
if (i) in the context of a single event or series of related events, more than
50% of the voting power of the Company's outstanding securities entitled to vote
in elections of directors shall be acquired by any person (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
other than by any person which includes Employee, or (ii) as the result of a
tender offer, merger, consolidation, sale of assets or contested election, or
any combination of such transactions, the persons who were directors of Employer
immediately before the transaction shall cease to constitute a majority of the
Board of Directors of Employer or any successor to Employer. In the event of a
Change in Control and any Change in Control Qualifying Event (as herein defined)
shall occur, Employee shall be permitted to terminate his employment within six
(6) months of such Change in Control Qualifying Event and notwithstanding such
termination, Employee shall be entitled to receive his Base Salary for the
remaining Term of this Agreement. In addition, any options granted to Employee
pursuant to Section 5 shall immediately vest as of such termination date;
however, Employee shall not be eligible to receive the Bonus for any quarter
beyond the quarter in which Employee's
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employment is terminated. For purposes hereof, a Change in Control Qualifying
Event shall include (i) a significant diminution, without mutual agreement of
the parties, in the nature and scope of Employee's authority, power, functions
or duties, (ii) Employer assigns to Employee, without mutual agreement of the
parties, substantial additional duties or responsibilities which are
inconsistent with the duties of Employee under this Agreement, or (iii) Employer
transfers Employee from the principal office of the Company. Employer and
Employee agree that if Employee does a spin-off initial public offering of
e-Docs Health Care Information Services, Inc., and none of the circumstances
described in subsections (i), (ii) or (iii) above apply, such transaction will
not be a Change in Control for purposes of this Section 13, so long as
replacement stock options reasonably equivalent in value to the options granted
to Employee in Employer are granted to Employee in the spun-off company on terms
and conditions mutually acceptable to Employer and Employee.
14. GROSS-UP PROVISION. If any portion of any payments received by Employee
from Employer shall be subject to tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended or any successor statutory provision, Employer
shall pay to Employee such additional amounts as are necessary so that, after
taking into account any tax imposed by Section 4999 (or any successor statutory
provision), and any federal and state income taxes payable on any such tax, the
Employee is in the same after-tax position that he would have been if such
Section 4999 or any successor statutory provision did not apply and no payments
were made pursuant to this Section 14.
15. ARBITRATION. The parties agree that all disputes or questions arising in
connection with this Agreement and/or the termination of Employee's employment
hereunder shall be settled by a single arbitrator pursuant to the rules of the
American Arbitration Association in the City of Houston, Texas, and the award of
the arbitrators shall be final, non-appealable, conclusive and enforceable in a
court of competent jurisdiction; PROVIDED, HOWEVER, notwithstanding the
foregoing, in no event shall any dispute, claim or disagreement arising under
Sections 7, 8, 9 and 10 of this Agreement that requires injunctive or other
equitable relief be required to be submitted to arbitration pursuant to this
provision or otherwise.
16. NOTICES. Any notice, demand or request which may be permitted, required
or desired to be given in connection therewith shall be given in writing and
directed to Employer and Employee as follows:
If to Employer, at: Applied Voice Recognition, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or, if to Employee, at: Mr. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Notices shall be deemed properly delivered and received when and if either: (i)
personally delivered; (ii) delivered by nationally-recognized overnight courier;
(iii) when deposited in the U.S. Mail, by registered or certified mail, return
receipt requested, postage prepaid; or (iv) sent via facsimile transmission with
confirmation mailed by regular U.S. mail. Any party may change its notice
address for purposes hereof to any address within the continental United States
by giving written notice of such change to the other parties hereto at least
fifteen days prior to the intended effective date of such change.
17. SEVERABILITY. If any provision of this Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by decree of a court of last resort, Employer and Employee shall
promptly meet and negotiate substitute provisions for those rendered or declared
illegal or unenforceable, but all the remaining provisions of this Agreement
shall remain in full force and effect.
18. ASSIGNMENT. This Agreement may not be assigned by any party without the
prior written consent of the other parties.
19. BINDING AGREEMENT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, and their respective legal
representatives, heirs, successors and permitted assigns.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
21. ATTORNEYS FEES. In the event of any dispute between the parties regarding
this Agreement, the prevailing party shall be entitled to be reimbursed for such
prevailing party's attorneys fees and costs of court (or cost of arbitration, as
applicable) by the non-prevailing party.
22. AGREEMENT READ, UNDERSTOOD AND FAIR. Employee has carefully read and
considered all provisions of this Agreement and agrees that all of the
restrictions set forth are fair and reasonable and are reasonably required for
the protection of the interests of Employer.
23. SUBJECT TO BOARD APPROVAL. This Agreement is subject to approval of the
Board of Directors of Employer. In connection therewith, Employer agrees to
submit a
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unanimous written consent of the Board of Directors approving such
transaction on or before July 15, 1999, and to advise Employee promptly
following such meeting as to whether this Agreement was approved. In the event
this Agreement is not approved on or before such date, this Agreement shall be
void and of no further force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
2nd day of August, 1999, effective as of the Effective Date.
EMPLOYER:
APPLIED VOICE RECOGNITION, INC., a
Delaware corporation d/b/a ▇.▇▇▇▇.▇▇▇
By:______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman
EMPLOYEE:
__________________________________________
▇▇▇▇ ▇▇▇▇▇
Signature Page to ▇▇▇▇ ▇▇▇▇▇ Employment Agreement
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EXHIBIT "A"
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1999 INCENTIVE PLAN CRITERIA
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50% OF INCENTIVE COMPENSATION BASED ON E-DOCS ACHIEVING TARGETED
REVENUE RUN RATE AND TARGETED EBITDA BY DECEMBER 31, 1999.
*OTHER CRITERIA: 50% of incentive compensation based on completion of the
following (to the satisfaction of the Compensation Committee of Employer):
20% Establish a common/integrated technology plan that addresses the
specialty and hospital market (the role of DVI, VC99, document
management, Speech Machines and VPN)
10% Define and have begun implementing the delivery of services to the
Hospital and specialty market (specific roll of all technical
resources)
10% Establish comprehensive Sales Program incorporating sales incentives
based on the quality of pricing, sales volume, customer retention and
develop a price increase program and establish for both district
personnel and senior management a quarterly incentive program with
measurable goals
10% Establish "Monthly Operating Review" process which would include a
review of past month with an action plan for the current month and a
mid-month projection and operational review and establish a budget
and cost tracking program for all departments
* Minimum of 90% of the Targeted Revenue Run Rate and Targeted EBITDA must
be achieved to qualify for "other criteria" bonus components.
Targeted Revenue Run Rate means a Revenue Run Rate based on the average
accrual basis gross revenues from medical transcription services and product
sales (but not extraordinary consulting services) for November and December,
1999 of no less than $898,000 per month. Targeted EBITDA means average EBITDA
for November and December, 1999 of no less than -$227,000 per month. Targeted
Revenue Run Rate and Targeted EBITDA will be adjusted for acquisitions made
after the Effective Date not included in Employer's July 14, 1999 Business
Plan.
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