ex10_1.htm


    
      
        

      

    

    Exhibit
      10.1

    


    SECOND
      AMENDED AND RESTATED EMPLOYMENT AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT (hereinafter this “Agreement”) is made effective as of
      August 2, 2007 (the “Effective Date”), between Mediware Information Systems,
      Inc., (hereinafter the “Company”) and John Damgaard (hereinafter the
“Executive”).

    


    WHEREAS,
      the Executive is a current employee of the Company, and now the Company desires
      to employ the Executive as the Senior Vice President and Chief Operating Officer
      of the Company, or in such other capacity as the parties may agree, and the
      Executive desires to be so employed by the Company, on the terms and conditions
      hereinafter set forth;

    


    NOW,
      THEREFORE, in consideration of the foregoing and of the respective covenants
      and
      agreements herein set forth, the Company and the Executive hereby agree as
      follows:

    


    1.
      Employment. The Company hereby agrees to employ the Executive, and the
      Executive hereby agrees to serve as the Senior Vice President and Chief
      Operating Officer, or in such other capacity as the parties may mutually agree.
      The Executive agrees to perform such services customary to such office as shall
      from time to time be assigned to him by the Chief Executive Officer or his
      designee. The Executive further agrees to use his best efforts to promote the
      interests of the Company and to devote his full energies to the business and
      affairs of the Company.

    


    2.
      Term of Employment. The employment hereunder shall be for a term of
      thirty-six months commencing on the Effective Date hereof and ending thirty-six
      months after the Effective Date hereof (the “Expiration Date”), unless
      terminated earlier pursuant to Paragraph 4 of this Agreement (the “Term of
      Employment”). This Agreement shall automatically renew for successive terms of
      one (1) year (each a “Renewal Term”) commencing on the first day immediately
      following the Expiration Date, unless such renewal is objected to by either
      the
      Company or the Executive by giving at least 90 days prior written notice prior
      to the scheduled Expiration Date. In the event of such renewal, the last day
      of
      each successive Renewal Term shall be deemed the Expiration Date.

    


    3.
      Compensation and Other Related Matters.

    


    (a)
      Salary. As compensation for services rendered hereunder, the Executive
      shall receive an annual base salary of two hundred twenty-five thousand dollars
      ($225,000), which salary shall be paid in accordance with the Company’s then
      prevailing payroll practices for its executives and shall be subject to review
      annually by the Chief Executive Officer and the Compensation Committee of the
      Board of Directors, which may include annual increases (the “Annual Base
      Salary”).

    


    (b)
      Bonus. During the term of this Agreement the Executive shall be eligible
      to receive an annual bonus of up to fifty percent (50%) of Executive’s Annual
      Base Salary for achieving objectives established by the Company, subject to
      the
      discretion of the Chief Executive Officer and the Compensation Committee of
      the
      Board of Directors (the “Annual Bonus”).  The bonus, if any, would be
      payable after the conclusion of the annual audit.

    


    (c)  Equity
      Compensation.

    


    Performance
      Shares. The Executive is hereby granted forty-five thousand
      (45,000) restricted shares of the Company’s common stock (the
“Performance Shares”) subject to the terms of the 2003 Equity Incentive Plan,
      any applicable restricted stock agreement and the vesting requirements set
      forth
      on Attachment A.

    


    Options.  The
      Executive is hereby granted thirty thousand (30,000) non-qualified stock options
      to purchase the Company’s common stock (the “Stock Options”).  Ten
      thousand (10,000) Stock Options, subject to the terms of the 2003 Equity
      Incentive Plan and any applicable stock option agreement, shall vest on each
      of
      the first, second, and third anniversary of the date of grant as provided on
      Attachment A.

    


    (d)
      Other Benefits. The fringe benefits, perquisites and other benefits of
      employment, including four (4) weeks vacation each year, to be provided to
      the
      Executive shall be equivalent to such benefits and perquisites as are provided
      to other senior executives of the Company as amended from time to
      time.

    


    (e)
      Reimbursement. Subject to policies established from time to time by the
      Company, the Company shall reimburse Executive
      for the reasonable expenses incurred by him in connection with the performance
      of his duties hereunder, including but not limited to, travel expenses and
      entertainment expenses, for which the Executive shall account to the Company
      in
      a manner sufficient to conform to Company policy and Internal Revenue Service
      requirements.  If the Company requires Executive to relocate, the
      Company will pay Executive’s reasonable moving expenses.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.
      Termination.

    


    (a)
      Disability. If, as a result of the incapacity of the Executive due to
      physical or mental illness, the Executive is unable to perform substantially
      and
      continuously the duties assigned to him hereunder for a period of three (3)
      consecutive months or for a non-consecutive period of nine (9) months during
      the
      Term of Employment, the Company may terminate his employment for “Disability”
upon thirty (30) days prior written notice to the Executive.

    


    (b)
      Death. The Executive’s employment shall terminate immediately upon the
      death of the Executive.

    


    (c)
      Cause. The Company shall be entitled to terminate the Executive’s
      employment for “Cause.” Termination by the Company of the employment of the
      Executive for “Cause” shall mean termination based upon (i) the willful failure
      by the Executive to follow directions communicated to him by the Chief Executive
      Officer or his designee; (ii) the willful engaging by the Executive in conduct
      which is materially injurious to the Company, monetarily or otherwise; (iii)
      a
      conviction of, a plea of nolo contendere, a guilty plea or confession
      by the Executive to an act of fraud, misappropriation or embezzlement or to
      a
      felony; (iv) the Executive’s habitual drunkenness or use of illegal substances;
      (v) a material breach by the Executive of this Agreement; or (vi) an act of
      gross neglect or gross misconduct which the Company deems in good faith to
      be
      good and sufficient cause.  Executive hereby represents and warrants
      that he has never been convicted of an act of fraud, misappropriation,
      embezzlement or a felony, and Executive further warrants that during the term
      of
      this Agreement, he will give the Company immediate notice of any charge against
      the Executive relating to any of the foregoing.

    


    (d)
      Termination Without Cause. The Executive shall have the right to
      terminate the Executive’s employment without cause at any time upon three months
      written notice.  The Company shall have the right to terminate the
      Executive’s employment without cause at any time upon written
      notice.  The giving of notice by either party pursuant to Section 2 to
      prevent the renewal of this Agreement shall not be deemed a termination of
      Executive’s employment without cause.

    


    5.
      Compensation Upon Termination or During Disability.

    


    (a)
      Disability. During any period that the Executive fails to perform his
      full-time duties with the Company for a three-month period as a result of
      incapacity due to physical or mental illness (the “Disability Period”), the
      Executive shall continue to receive his Annual Base Salary at the rate set
      forth
      in Paragraph 3(a) of this Agreement, less any compensation payable to the
      Executive under the applicable disability insurance plan of the Company during
      the Disability Period, until this Agreement is terminated pursuant to Paragraph
      4(a) hereof. Thereafter, or in the event the Executive’s employment shall be
      terminated by reason of his death, the Executive’s benefits shall be determined
      under the Company’s insurance and other compensation programs then in effect in
      accordance with the terms of such programs and the Company shall have no further
      obligation to the Executive under this Agreement.

    


    (b)
      Death. In the event of the Executive’s death, the Executive’s beneficiary
      shall be entitled to receive the Executive’s Annual Base Salary at the rate set
      forth in Paragraph 3(a) of this Agreement until the date of his death.
      Thereafter, the Company shall have no further obligation to the Executive or
      the
      Executive’s beneficiary under this Agreement.

    


    (c)
      Cause. If the Executive’s employment shall be terminated by the Company
      for “Cause” as defined in Paragraph 4(c) of this Agreement, the Company shall
      continue to pay the Executive his Annual Base Salary at the rate set forth
      in
      Paragraph 3(a) of this Agreement through the date of termination of the
      Executive’s employment. Thereafter, the Company shall have no further obligation
      to the Executive under this Agreement.

     

    (d)
      Termination Without Cause. If the Executive terminates his employment
      pursuant to Paragraph 4(d), the Executive shall be entitled to receive
      Executive’s Annual Base Salary at the rate set forth in Paragraph 3(a) of this
      Agreement until the date Executive’s employment ends.  Thereafter the
      Company shall have no obligation to Executive.  If the Company
      voluntarily terminates the Executive’s employment with the Company pursuant to
      Paragraph 4(d) of this Agreement, the Company shall until the earlier of the
      six
      month anniversary of the termination of employment or the commencement of
      Executive’s employment at a successor employer, pay the Executive an amount
      equal to six months of the Executive’s Annual Salary at the highest rate in
      effect during the period of the Executive’s employment, payable in six equal
      monthly installments. Additionally, until the earlier of the six month
      anniversary of the termination of employment, or the commencement of the
      provision of health benefits to the Executive by a successor employer, the
      Employer will pay for all COBRA health premiums to ensure that Executive
      continues to receive the same coverage of health insurance as immediately before
      the date of the termination. Thereafter, the Executive acknowledges that the
      Company shall have no further obligation to the Executive under this
      Agreement.  Notwithstanding the foregoing, the Company shall only be
      obligated to make the payments set forth in this section after the Executive
      delivers to the Company an executed Release and Severance Agreement, which
      shall
      be substantially in the form of Employer’s standard Release and Severance
      Agreement for all employees, with such changes therein or additions thereto
      as
      needed under then applicable law to give effect to its intent and
      purpose.  After the Executive is no longer receiving benefits from the
      Company, the Executive shall be eligible for COBRA at Executive’s own expense in
      accordance with applicable law.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    (e)
      Acquisition or Sale ofCompany. If a third party described in
      Paragraph 5(f) of this Agreement terminates the Executive due to “an acquisition
      or sale of the Company,” as described in Paragraph 5(f) below, the Company shall
      pay the Executive an amount equal to three months of Executive’s Annual Base
      Salary at the rate in effect at the date of termination of the Executive’s
      employment during the period of the Executive’s employment, payable in three
      equal monthly installments. Until the earlier of the three months after the
      termination of employment, or the commencement of the provision of health
      benefits to the Executive by a successor employer, the Executive will continue
      to receive the same coverage of health insurance as immediately before the
      date
      of the termination, at the expense of the Company. Thereafter, the Executive
      acknowledges that the Company shall have no further obligation to the Executive
      under this Agreement.  Notwithstanding the foregoing, the Company
      shall only be obligated to make the payments set forth in this section after
      the
      Executive delivers to the Company an executed Release and Severance Agreement,
      which shall be substantially in the form of Employer’s standard Release and
      Severance Agreement for all employees, with such changes therein or additions
      thereto as needed under then applicable law to give effect to its intent and
      purpose; and after delivery to the Company of a resignation from all offices,
      directorships and fiduciary positions with the Company, its affiliates and
      employee benefit plans.

    


    (f)
      Definition. For purposes hereof, “an acquisition or sale of the Company”
to or by “a third party” shall mean the occurrence of any transaction or series
      of transactions which within a six (6) month period result in (i) greater than
      fifty percent (50%) of the then outstanding shares of Common Stock
      of the Company (for cash, property including, without limitation, stock in
      any
      corporation or other third party legal entity, indebtedness or any combination
      thereof) have been redeemed by the Company or purchased by a third party not
      previously affiliated with the Company, or exchanged for shares in any other
      corporation or other third party legal entity not previously affiliated with
      the
      Company, or any combination of such redemption, purchase or exchange, (ii)
      greater than fifty percent (50%) in book value of the Company’s gross assets are
      acquired by a third party not previously affiliated with the Company (for cash,
      property including, without limitation, stock in any corporation whether or
      not
      unaffiliated with the Company, indebtedness of any person or any combination
      thereof), or (iii) the Company is merged or consolidated with another private
      or
      public corporation or other third party legal entity and the former holders
      of
      shares of Common Stock of the Company own less than twenty-five percent (25%)
      of
      the voting power of the acquiring, resulting or surviving corporation or other
      third party legal entity. For the purposes hereof a director or officer of
      the
      Company shall be considered “affiliated with the Company.”

    


    6.
      Confidentiality and Restrictive Covenants.

    


    (a)
      The
      Executive acknowledges that:

    


    (i)
      the
      business in which the Company is engaged is intensely competitive and his
      employment by the Company will require that he have continual access to and
      knowledge of confidential information of the Company, including, but not limited
      to, the nature and scope of its products, the object and source code offered,
      marketed or under development by the Company or under consideration by the
      Company for development, acquisition, or marketing by the Company and the
      documentation prepared or to be prepared for use by the Company (and the phrase
      “by the Company” shall include other vendors, licensees or and resellers and
      value-added resellers of the Company’s products or proposed product) and
      the  Company’s plans for creation, acquisition, improvement or
      disposition of products or software, expansion plans, financial status and
      plans, products, improvements, formulas, designs or styles, method of
      distribution, lists of remarketing and value-added and other resellers customer
      lists and contact lists, product development plans, rules and regulations,
      personnel information and trade secrets of the Company, all of which are of
      vital importance to the success of the Company’s business, provided that
      Confidential Information will not include information which has become publicly
      known otherwise than through a breach by Executive of the provisions of this
      Agreement (collectively, “Confidential Information”);

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    (ii)  the
      direct or indirect disclosure of any Confidential Information would place the
      Company at a serious competitive disadvantage and would do serious damage,
      financial and otherwise, to the Company’s business;

    


    (iii)  by
      his training, experience and expertise, the Executive’s services to the Company
      will be special and unique; and

    


    (iv)  if
      the Executive leaves the Company’s employ to work for a competitive business, in
      any capacity, it would cause the Company irreparable harm.

    


    (b)  Covenant
      Against Disclosure. The Executive therefore covenants and agrees that all
      Confidential Information relating to the business products and services of
      the
      Company, any subsidiary, affiliate, seller or reseller, value-added vendor
      or
      customer shall be and remain the sole property and confidential business
      information of the Company, free of any rights of the Executive. The Executive
      further agrees not to make any use of the confidential information except in
      the
      performance of his duties hereunder and not to disclose the information to
      third
      parties, without the prior written consent of the Company. The obligations
      of
      the Executive under this Paragraph 6 shall survive any termination of this
      Agreement. The Executive agrees that, upon any termination of his employment
      with the Company, all Confidential Information in his possession, directly
      or
      indirectly, that is in written or other tangible or readable form (together
      with
      all duplicates thereof) will forthwith be returned to the Company and will
      not
      be retained by the Executive or furnished to any third party, either by sample,
      facsimile, film, audio or video cassette, electronic data, verbal communication
      or any other means of communication.

    


    (c)  Non-competition.
      The Executive agrees that, during the Term of Employment and for a period of
      one
      (1) year following the date of termination of the Executive’s employment with
      the Company (or six months following the date of termination of the Executive’s
      employment with the Company if the Company terminates the Executive’s employment
      without cause pursuant to Section 4(d)), the Executive will not own, manage,
      or
      be connected as an officer, employee or director with, or aid or
      assist anyone else in the conduct of, any entity or business which competes
      with
      any business conducted by the Company (which currently includes the licensing
      and sale of  medical software and services in the Medication
      Management, Blood Banking and Operating Room fields) or any of its subsidiaries
      or affiliates, in the United States, Canada and the UK and any other area where
      such business is being conducted on the date the Executive’s employment is
      terminated hereunder. Notwithstanding the foregoing the Executive’s ownership of
      securities of a public company engaged in competition with the Company not
      in
      excess of five (5%) percent of any class of such securities shall not be
      considered a breach of the covenants set forth in this Paragraph 6.

    


    (d)  Further
      Covenant. Until the date which is one (1) year after the date of the
      termination of the Executive’s employment hereunder for any reason, the
      Executive will not, directly or indirectly, take any of the following actions,
      and, to the extent the Executive owns, manages, operates, controls, is employed
      by or participates in the ownership, management, operation or control of, or
      is
      connected in any manner with, any business of the type and character engaged
      in
      and competitive with that conducted by the Company or any of its subsidiaries
      or
      affiliates during the period of the Executive’s employment, the Executive
      will  not encourage or participate in any of the following actions on
      behalf of such business:

    


    (i)
      persuade or attempt to persuade any customer of the Company or any
      seller,reseller or value-added vendor of the Company or of its products to
      cease
      doing business with the Company or any of its subsidiaries or affiliates, or
      to
      reduce the amount of business it does with the Company or any of its
      subsidiaries or affiliates;

    


    (ii)
      solicit for himself or any entity the business of (A) any customer of the
      Company or any of its subsidiaries or affiliates, or (B) any seller, reseller
      or-value-added vendor of the Company, or of its products, or (C) solicit any
      business from a customer which was a customer of the Company or any of its
      subsidiaries or affiliates within six months prior to the termination of the
      Executive’s employment; and

    


    (iii)
      persuade or attempt to persuade any employee of the Company or any of
      itssubsidiaries or affiliates or any individual who was an employee of the
      Company or any of its subsidiaries or affiliates, at any time during the
      six-month period prior to the Executive’s termination of employment, to leave
      the employ of the Company or any of its subsidiaries or affiliates.

    


    7.
      Intellectual Property. The Executive hereby agrees that any and all (i)
      software, object code, source code, and documentation, (ii) any improvements,
      inventions, discoveries, formulae, processes, methods, know-how, confidential
      data, patents, trade secrets, (iii) Food and Drug Administrative (“FDA”)
      applications seeking approval by the FDA, information contained in the Forms
      510-k of the FDA and approvals from the FDA, and (iv) other proprietary
      information made, developed or created by the Executive (whether at the request
      or suggestion of the Company or otherwise, whether alone or in conjunction
      with
      others, and whether during regular working hours of work or otherwise) during
      the period of his employment with the Company, which may be directly or
      indirectly useful in, or relate to, the business being carried out by the
      Company or any of its subsidiaries or affiliates, shall be promptly and fully
      disclosed by the Executive to the Board of Directors and shall be the Company’s
      exclusive property as against the Executive, and the Executive shall promptly
      deliver to the Board of Directors of the Company all papers, drawings, models,
      data and other material relating to any invention made, developed or created
      by
      him as aforesaid.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    The
      Executive shall, upon the Company’s request and without any payment therefor,
      execute any documents necessary or advisable in the opinion of the Company’s
      counsel to direct issuance of patents, copyrights and FDA applications or
      approvals of the Company with respect to such inventions or work product or
      improvements or enhancements as are to be the Company’s exclusive property as
      against the Executive under this Paragraph 7 or to vest in the Company title
      to
      such inventions as against the Executive, the expense of securing any such
      patent or copyright, to be borne by the Company.

    


    8.
      Breach by Employee. Both parties recognize that the services to be
      rendered under this Agreement by the Executive are special, unique and
      extraordinary in character, and that in the event of a breach by Employee of
      the
      terms and conditions of the Agreement to be performed by him, then the Company
      shall be entitled, if it so elects, to institute and prosecute proceedings
      in
      any court of competent jurisdiction, either in law or in equity, to enforce
      the
      specific performance thereof by the Executive. Without limiting the generality
      of the foregoing, the parties acknowledge that a breach by the Executive of
      his
      obligations under Paragraph 6 or 7 would cause the Company irreparable harm,
      that no adequate remedy at law would be available in respect thereof and that
      therefore the Company would be entitled to seek injunctive relief with respect
      thereto.

    


    9.
      Arbitration. Without precluding acting to obtain specific performance
      and/or injunctive relief pursuant to Paragraph 8 above, in the event of any
      dispute between the parties hereto arising out of or relating to this Agreement
      or the employment relationship, including, without limitation, any statutory
      claims of discrimination, between the Company and the Executive (except any
      dispute with respect to Paragraphs 6 and 7 hereof), such dispute shall be
      settled by arbitration in Nassau County or New York County, State of New York,
      or in Wyandotte County or the City of Kansas City, State of Kansas, in
      accordance with the National Rules for the Resolution of Employment Disputes
      then in effect of the American Arbitration Association. The parties hereto
      agree
      that the arbitral panel shall also be empowered to grant injunctive relief
      to a
      party, which may be included in any award. Judgment upon the award rendered,
      including injunctive relief, may be entered in any court having jurisdiction
      thereof. Notwithstanding anything herein to the contrary, if any dispute arises
      between the parties under Paragraphs 6 or 7, neither the Executive nor the
      Company shall be required to arbitrate such dispute or claim, but each party
      shall have the right to institute judicial proceedings in any court of competent
      jurisdiction with respect to such dispute or claim. If such judicial proceedings
      are instituted, the parties agree that such proceedings shall not be stayed
      or
      delayed pending the outcome of any arbitration proceeding
      hereunder.

    


    10.
      Miscellaneous.

    


    (a)
      Successors; Binding Agreement. This Agreement and the obligations of the
      Company hereunder and all rights of the Executive hereunder shall inure to
      the
      benefit of the parties hereto and their respective heirs, personal
      representatives, successors and assigns, provided, however, that the duties
      of
      the Executive hereunder are personal to the Executive and may not be delegated
      or assigned by him.  By entering into this Agreement, the Executive’s
      prior employment agreement with the company is hereby terminated.

    


    (b)
      Notice. All notices of termination and other communications provided for
      in this Agreement shall be in writing and shall be deemed to have been duly
      given when delivered by hand, delivered by an express delivery (one day
      service), delivered by telefax and confirmed by express mail or one day express
      delivery service, or mailed by United States registered mail, return receipt
      requested, addressed as follows:

    


    
      	
              If
                to the Company:

            
	
              Mediware
                Information Systems, Inc.

            
	
              11711
                West 79th
                Street

            
	
              Lenexa,
                KS  66214

            
	 
	
              If
                to the Executive:

            
	
              John
                Damgaard

            


    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    or
      to
      such other address as either party may designate by notice to the other, which
      notice shall be deemed to have been given upon receipt.

    


    (c)
      Governing Law. This Agreement shall be governed by and construed in
      accordance with the laws of the State of Kansas without regard to the conflict
      of law rules thereof.

    


    (d)
      Waivers. The waiver of either party hereto of any right hereunder or of
      any failure to perform or breach by the other party hereto shall not be deemed
      a
      waiver of any other right hereunder or of any other failure or breach by the
      other party hereto, whether of the same or a similar nature or otherwise. No
      waiver shall be deemed to have occurred unless set forth in writing executed
      by
      or on behalf of the waiving party. No such written waiver shall be deemed a
      continuing waiver unless specifically stated therein, and each such waiver
      shall
      operate only as to the specific term or condition waived and shall not
      constitute a waiver of such term or condition for the future or as to any act
      other than that specifically waived.

    


    (e)
      Validity. The invalidity or unenforceability of any provision of this
      Agreement shall not affect the validity or enforceability of any other provision
      of this Agreement, which shall otherwise remain in full force and effect.
      Moreover, if any one or more of the provisions contained in this Agreement
      is
      held to be excessively broad as to duration, scope or activity, such provisions
      shall be construed by limiting and reducing them so as to be enforceable to
      the
      maximum extent compatible with applicable law.

    


    (f)
      Counterparts. This Agreement may be executed in several counterparts,
      each of which shall be deemed an original, but all of which shall constitute
      one
      and the same instrument.

    


    (g)
      Entire Agreement. This Agreement (including the applicable restricted
      stock agreements) sets forth the entire agreement and understanding of the
      parties in respect of the subject matter contained herein, and supersedes all
      prior agreements (including the prior employment agreement), promises,
      covenants, arrangements, communications, representations or warranties, whether
      oral or written, by any officer, employee or representative of either party
      in
      respect of said subject matter.

    


    (i)
      Headings Descriptive. The headings of the several paragraphs of this
      Agreement are inserted for convenience only and shall not in any way affect
      the
      meaning or construction of any of this Agreement.

    


    (j)
      Capacity. The Executive represents and warrants that he is not a party to
      any agreement that would prohibit him from entering into this Agreement or
      performing fully his obligations hereunder.

    


    


    IN
      WITNESS WHEREOF, the Company and the Executive have executed this Agreement
      as
      of the date first written above.

    


    


    
      	
              EXECUTIVE:

            	 	
              MEDIWARE
                INFORMATION SYSTEMS, INC:

            
	 	 	 	 
	 	 	 	 
	
               

            	 	
              By:

            	
              /s/
                James Burgess

            
	
              John
                Damgaard

            	 	 	
              Name
                James Burgess

            
	 	 	 	
              Title:President
                & Chief Executive Officer