EX-10.1






Exhibit 10.1




EMPLOYMENT AGREEMENT




THIS AGREEMENT (“Agreement”) is made and entered into as of March 31, 2007 (the “Effective
Date”), by and between Jacques Cornet (the “Executive”) and MERGE TECHNOLOGIES INCORPORATED, a
Wisconsin corporation (the “Company”).



R E C I T A L S:




A. The Company is engaged in the provision of medical diagnostic imaging software and
professional services for healthcare facilities and medical equipment manufacturers. The business
in which the Company is engaged in from time-to-time during the term of this Agreement, inclusive
of new lines of business, if any, are hereinafter collectively referred to as the “Business”; and



B. The Company desires to employ the Executive and the Executive desires to accept such
employment;



A G R E E M E N T:




NOW THEREFORE, in consideration of the foregoing Recitals, as well as the promises, mutual
covenants and agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the Executive do hereby
agree as follows:



1. Employment and Duties. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to employ the Executive as its President of Merge Healthcare Europe,
Middle-East, and Africa (EMEA) operations to perform such duties as are consistent with such
position as may be assigned, from time to time, by the Board of Directors (the “Board”), or the
Chief Executive Officer of the Company and to render such additional services and discharge such
other responsibilities as the Board, or Chief Executive Officer may, from time to time, stipulate
consistent with such senior management position.



2. Performance. The Executive accepts the employment described in Section 1 of
this Agreement and agrees to devote substantially all of his/her working time and efforts to the
faithful and diligent performance of the services described herein, including the performance of
such other services and responsibilities as the Board, or the Chief Executive Officer may, from
time to time, stipulate consistent with such senior management position.



3. Term. The term of Executive’s employment with the Company under this Agreement
shall commence March 31, 2007 (“Start Date”). The term of employment shall remain in effect until
and unless terminated in accordance with the terms and conditions set forth in this Agreement. The
period of time in which Executive is employed shall constitute the “Employment Period,” and each
calendar year or portion of a calendar year during the Employment Period is hereinafter sometimes
referred to as a “Year.” The Board or appropriate committee thereof will review the terms and
conditions of this Employment Agreement at its sole discretion, but no less frequently than once
every three (3) years subsequent to the Effective Date. This agreement replaces all prior written
or oral agreements between the Executive and the Company.



4. Salary. For all the services to be rendered by the Executive hereunder, commencing
on the Start Date, the Company agrees to pay a salary of no less than Two Hundred Sixty-Seven
Thousand Six Hundred Fifty Canadian Dollars (CDN $267,650) per year, payable in the manner and
frequency in which the Company’s payroll is customarily handled, which amount shall be subject to
annual review and possible adjustment as provided in Section 5, below (“Salary”).



5. Bonus. The Executive shall be eligible for an annual performance bonus targeted at
forty percent (40%) of Salary, with the exact amount paid dependent on achievement of defined
Company and individual performance targets. As an Executive Officer of the Company, adjustments to
the Executive’s compensation package, including Salary, annual bonus and annual stock option
awards, will be recommended annually by the Company’s Chief Executive Officer and subject to
approval of the Board or appropriate committee thereof. For each Year the annual performance bonus
is to be paid, it shall be paid within thirty (30) days of the completion of the year-end financial
statements for that Year, but in no event later than May 31 of the following year. The Chief
Executive Officer, subject to approval of the Board or appropriate committee thereof, may change
the bonus target annually and any dispute as to whether Executive met the performance targets for a
Year shall be determined conclusively by the Chief Executive Officer and Compensation Committee of
the Board (the “Compensation Committee”). Such determination will be communicated in writing to the
Executive by the Chief Executive Officer or the Compensation Committee.



6. Paid Time Off. The Executive shall be entitled to paid time off for vacation,
illness, holidays and personal reasons in accordance with the Company’s paid time off policy at the
rate generally offered to other executives of the Company, provided that Executive’s paid vacation
shall be no less than twenty (20) days per calendar year.



7. Disability Benefit. If at any time during the Employment Period the Executive is
unable to perform fully the material and substantial duties of the Executive’s regular job position
hereunder by reason of illness, accident, or other disability (as confirmed by competent medical
evidence by a physician selected by the Executive Committee of the Board), the Executive shall be
entitled to receive periodic payments of Salary, bonus and any and all benefits to which he would
otherwise be entitled pursuant to Section 4, 5, 6, 8, 10 and 11 of this Agreement by reason
of his employment for a period of ninety (90) days. If the Executive is prevented by reason of any
illness, accident or other disability from performing the material and substantial duties of his
regular job position for a period of 180 days, whether or not consecutive, in any twelve (12) month
period which, in the opinion of a physician selected by the Compensation Committee, is likely to
continue to the same degree, he will be considered to be suffering from a Disability
(“Disability”). Notwithstanding the foregoing provisions, (i) the amounts payable to the Executive
pursuant to this Section 7 shall be reduced by any amounts received by the Executive with
respect to any such incapacity pursuant to any insurance policy, plan, or other employee benefit
provided to the Executive by the Company; and (ii) in no event will the terms of this Agreement
supersede any health or disability benefit to which Executive is entitled under applicable law.



8. Stock Options. Executive may be granted stock options on an annual or other basis
upon recommendation by the Chief Executive Officer and approval by the Board or the Compensation
Committee.



9. Change in Control. Upon a “Change in Control” of the Company (as defined below),
all of the Executive’s then-outstanding and non-exercised options will immediately vest and become
exercisable. If a Change in Control occurs and in the event of the Executive’s “Separation From
Service” (as defined in Section 409A of the Internal Revenue Code of 1986 as amended, and any
regulations thereunder) with the Company due to: (i) the involuntary termination of his employment
within 365 days following the Change in Control; or (ii) his voluntarily terminating his employment
with the Company within 365 days, following either: (a) any substantial and continuing reduction in
Executive’s responsibilities or authority with respect to the Company; (b) a reduction in
Executive’s compensation package, including Salary, in effect immediately prior to the Change in
Control; or (c) the Executive is required to change the location of his principal place of
employment to other than the Toronto, Canada area, then the Executive will be entitled to receive
the greater of: (I) any minimum severance payments required under applicable federal, state and
local law; or (II) all of the following: (A) his then-current Salary for twelve additional months,
as a Change in Control allowance, to be paid pursuant to the Company’s standard payroll policies;
(B) an amount equal to the product of (x) one-twelfth of the maximum amount of the Executive’s
then-current annual bonus set forth in Section 5, determined without regard to the
achievement of performance targets, multiplied by (y) the sum of twelve (12) plus the number of
months of the current plan year during which the Executive was employed, to be paid in a single
payment concurrently with the Executive’s final payment of the Change in Control allowance; and (C)
a continuation of the welfare benefits of health care, life and accidental death and dismemberment,
and disability insurance coverage (collectively, “Supplemental Benefits”) for twelve (12) months
after the effective date of his Separation From Service. These benefits shall be provided at the
same cost to the Executive (if any), and at the same coverage level, as in effect as of the
effective date of Executive’s Separation From Service. However, in the event the premium cost
and/or level of coverage shall change for all management employees with respect to Supplemental
Benefits, the cost and/or coverage level, likewise, shall change for the Executive in a
corresponding manner. The continuation of Supplemental Benefits shall be discontinued in the event
Executive has available substantially similar welfare benefits at a comparable cost from a
subsequent employer. For the purposes of this Section 9, “Change in Control” of the Company
shall mean (i) a change in the ownership of stock of the Company having fifty percent (50%) or more
of the voting power, in a single transaction or series of transactions effected by a third party or
third parties acting in concert, or (ii) a change of fifty percent (50%) or more of the members of
the Board in a single transaction or series of transactions effected by any third party or third
parties acting in concert, other than pursuant to nomination of a new slate of directors where
there has been no material change in beneficial ownership of the Company’s voting stock within 365
days preceding such nomination or a sale of substantially all of the Company’s assets.



10. Other Benefits. Except as otherwise specifically provided herein, during the
Employment Period, the Executive shall be eligible for all non-wage benefits the Company provides
generally for its executive employees.



11. Business Expenses.




(a) Reimbursement. The Company shall reimburse the Executive for the
reasonable, ordinary, and necessary business expenses incurred by him in connection with the
performance of his duties hereunder, including, but not limited to, ordinary and necessary
travel expenses and entertainment expenses and mobile phone expenses.




(b) Accounting. The Executive shall provide the Company with an accounting of
his expenses, which accounting shall clearly reflect which expenses are reimbursable by the
Company. The Executive shall provide the Company with such other supporting documentation
and other substantiation of reimbursable expenses as will conform to Internal Revenue
Service or other requirements. All such reimbursements shall be payable by the Company to
the Executive promptly after receipt by the Company of appropriate documentation therefor.



12. Termination. This Agreement may be terminated by the Company or the Board or
appropriate committee thereof at any time for the following reasons:



(a) For Cause, by written notice to the Executive. “Cause” shall mean termination for gross
negligence, commission of a felony or material violation of any Company policies;




	 	(b)	 	In the event of the death of the Executive;





(c) Upon the Executive’s resignation or retirement from employment with the Company (this
clause shall not be construed as an agreement to employ the Executive for a defined term), upon
thirty (30) days advance written notice to the Company;



(d) In the event of the Disability of the Executive as defined in Section 7 of this
Agreement, subject to the Company discharging its duty to accommodate under applicable law, by
written notice to the Executive;



(e) By the Executive upon written notice of the occurrence of “Good Reason,” which shall be
defined to include only:




	 	a.	 	constructive termination;






	 	b.	 	a material reduction in Salary or target bonus
percentage (%);






	 	c.	 	the Executive is required to change the
location of his principal place of employment to other than the
Toronto, Canada area; or






	 	d.	 	a material reduction in responsibility; or





(f) Without Cause for any reason other than as set forth above in Subsection 12 (a), (b),
(c), (d) or (e) by written notice to the Executive.



If this Agreement is terminated pursuant to this Section 12, the Executive shall be deemed
to have incurred a Separation From Service with the Company.



13. Severance. In the event of the Executive’s Separation From Service with the
Company pursuant to Subsection 12 (d), (e) or (f), the Company shall pay the Executive, as
a severance allowance, the greater of (I) any minimum severance payments required under applicable
Ontario provincial law; or (II) all of the following: (A) an amount equal to twelve (12) months of
his then-current Salary plus (B) the product of (i) one-twelfth of the Executive’s target bonus in
effect for the then-current year times (ii) the sum of the number of months of the current
plan year during which the Executive was employed plus an additional twelve (12) months times (iii)
the Executive’s individual goal performance score from the previous year, and (C) a continuation of
Supplemental Benefits for twelve (12) months after the effective date of the Executive’s Separation
From Service. These benefits shall be provided at the same cost to the Executive (if any), and at
the same coverage level, as in effect as of the effective date of the Executive’s Separation From
Service. However, in the event the premium cost and/or level of coverage shall change for all
management employees with respect to Supplemental Benefits, the cost and/or coverage level,
likewise, shall change for the Executive in a corresponding manner. The amount of the severance
allowance provided for in subsections (A) and (B) of this Section 13 shall be paid
out in equal installments over the severance period. Notwithstanding anything to the contrary
contained herein, in the event the Executive receives (pursuant to the operation of Section
9, above) severance benefits following the Executive’s Separation From Service with the Company
after a Change in Control of the Company, then Executive shall not be entitled to any payment of a
severance allowance pursuant to this Section 13. If the Executive is not entitled severance
benefits pursuant to Section 9, then the Executive shall continue to be eligible for a
severance allowance per this Section 13.



14. Surrender of Properties. Upon termination of the Executive’s employment with the
Company, regardless of the cause therefor, the Executive shall promptly surrender to the Company
all property provided him by the Company for use in relation to his employment, and, in addition,
the Executive shall surrender to the Company any and all confidential sales materials, lists of
customers and prospective customers, price lists, files, patent applications, records, models, or
other materials and information of or pertaining to the Company or its customers or prospective
customers or the products, Business, and operations of the Company in his possession.



15. Inventions. Except as otherwise provided in this Section 15 the Executive:




(a) shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge, or data of the Company or its Business or production
operations obtained by the Executive during his employment by the Company, which shall not
be generally known to the public or recognized as standard practice (whether or not
developed by the Executive);




(b) shall promptly disclose to the Company all inventions, ideas, devices, and
processes made or conceived by him alone or jointly with others, from the time of entering
the Company’s employ until such employment is terminated, relevant or pertinent in any way,
whether directly or indirectly, to the Company’s Business or production operations or
resulting from or suggested by any work which he may have done for the Company or at its
request;




(c) shall, at all times during his employment with the Company, assist the Company
(entirely at the Company’s expense) to obtain and develop for the Company’s benefit patents
on such inventions, ideas, devices and processes, whether or not patented; and




(d) shall do all such acts and execute, acknowledge and deliver all such instruments as
may be necessary or desirable in the opinion of the Company to vest in the Company the
entire interest in such inventions, ideas, devices, and processes referred to above.



The foregoing to the contrary notwithstanding, the Executive shall not be required to assign
or offer to assign to the Company any of the Executive’s rights in any invention for which no
equipment, supplies, facility, or trade secret information of the Company was used and which was
developed entirely on the Executive’s own time, unless: (A) the invention related to (i) the
Business; or (ii) the Company’s actual or demonstrably anticipated (with the realistic prospect of
occurring) research or development; or (B) the invention results from any work performed by the
Executive for the Company. The Executive acknowledges his prior receipt of written notification of
the limitation set forth in the preceding sentence on the Executive’s obligation to assign or offer
to assign to the Company the Executive’s rights in inventions.



16. Confidentiality of Information: Duty of Non-Disclosure.




(a) The Executive acknowledges and agrees that his employment by the Company under this
Agreement necessarily involves his understanding of and access to certain trade secrets and
confidential information pertaining to the Business of the Company. Accordingly, the
Executive agrees that after the Effective Date at all times he will not, directly or
indirectly, without the express consent of the Company, disclose to or use for the benefit
of any person, corporation or other entity, or for himself any and all files, trade secrets
or other confidential information concerning the internal affairs of the Company, including,
but not limited to, information pertaining to its customers, prospective customers,
services, products, earnings, finances, operations, methods or other activities, provided,
however, that the foregoing shall not apply to information which is of public record or is
generally known, disclosed or available to the general public or the industry generally, or
known by Executive prior to his employment with the Company. Further, the Executive agrees
that he shall not, directly or indirectly, remove or retain, without the express prior
written consent of the Company, and upon termination of this Agreement for any reason shall
return to the Company, any confidential figures, calculations, letters, papers, records,
computer disks, computer print-outs, lists, documents, instruments, drawings, designs,
programs, brochures, sales literature, or any copies thereof, or any information or
instruments derived therefrom, or any other similar information of any type or description,
however such information might be obtained or recorded, arising out of or in any way
relating to the Business of the Company or obtained as a result of his employment by the
Company. The Executive acknowledges that all of the foregoing are proprietary information,
and are the exclusive property of the Company. The covenants contained in this Section
16 shall survive the termination of this Agreement for up to two years, and shall apply
to Executive everywhere in the United States and Canada. Nothing in this Section 16
is intended to, nor does it, limit Executive’s ability to be employed by another after his
employment with the Company ends; those limitations are contained in Section 17).




(b) Notwithstanding the above, nothing in this Section 16 shall limit
Executive’s duties or obligations to comply with any applicable state’s trade secret laws.




(c) The Executive agrees and acknowledges that the Company does not have any adequate
remedy at law for the breach or threatened breach by the Executive of his covenant, and
agrees that the Company shall be entitled to injunctive relief to bar the Executive from
such breach or threatened breach in addition to any other remedies which may be available to
the Company at law or in equity.



17. Covenant Not to Compete.




(a) During Employment Period. During the Employment Period, the Executive shall
not, without the prior written consent of the Company, which consent may be withheld at the
sole and reasonable discretion of the Company, engage in any other business activity for
gain, profit, or other pecuniary advantage (excepting the investment of funds in such form
or manner as will not require any services on the part of the Executive in the operation of
the affairs of the companies in which such investments are made) or engage in or in any
manner be connected or concerned, directly or indirectly, whether as an officer, director,
stockholder, partner, owner, employee, creditor, manager, or otherwise, with the operation,
management, or conduct of any business that competes with the Business.




(b) Following Termination of Employment Period. Within the twelve (12) month
period immediately following the end of the Employment Period, regardless of the reason
therefore, the Executive shall not, without the Company’s prior written consent, which
consent may be withheld in the Company’s sole and reasonable discretion, provide the same or
similar services as provided to the Company to another entity or person within EMEA
that is engaged in a business similar to the Business being conducted at the
time of such termination.




	 	18.	 	Covenant Not to Deal or Solicit.






(a) During Employment Period. During the Employment Period, the Executive shall
not, without the Company’s prior written consent, which consent may be withheld in the
Company’s sole and reasonable discretion, directly or indirectly, solicit, contact,
interfere with, or divert any Customer of the Company (as defined below) or any of its
affiliates or subsidiaries for the purpose of selling to those Customers any products or
services whatsoever. For the purposes of this Section 18: a “Customer” shall mean
any person who has purchased services or products from the Company, its Affiliates or
subsidiaries, during any time during the Employment Period or, to the knowledge of the
Executive, at any time prior to the Employment Period; and “Affiliates” shall mean entities
controlling, controlled by or under common control with the Company.




(b) Following Termination of Employment Period. Within the twelve (12) month
period immediately following the end of the Employment Period, regardless of the reason
therefore, the Executive shall not, without the prior written consent of the Company, which
consent may be withheld at the sole and reasonable discretion of the Company, engage in any
of the following:




	 	(i)	 	contact or solicit any Customer of the Company or any of its
Affiliates or subsidiaries for the purposes of selling to those Customers any
product or services which are the same as, or substantially similar to, or
competitive with, products or services sold by the Company or any of its
Affiliates or subsidiaries as of the end of the Employment Period;






	 	(ii)	 	transact any business with any Customer of the Company or any
of its Affiliates or subsidiaries with respect to any product or services which
are the same as, or substantially similar to, or competitive with, products or
services sold by the Company or any of its Affiliates or Subsidiaries as of the
end of the Employment Period; or






	 	(iii)	 	directly solicit any employee then employed by the Company or
any of its Affiliates or subsidiaries, or previously employed by any such
company within the one-year period preceding the end of the Employment Period,
to join the Executive, whether as an officer, director, stockholder, partner,
owner, employee, manager, or otherwise, in any enterprise engaged in a business
similar to the Business being conducted at the time of such termination.





19. General Provisions.




(a) Goodwill. The Company has invested substantial time and money in the
development of its products, services, territories, advertising and marketing thereof,
soliciting clients and creating goodwill. By accepting employment with the Company, the
Executive acknowledges that the Customers are the customers of the Company and that any
goodwill created by the Executive belongs to and shall inure to the benefit of the Company.




(b) Acknowledgment. The Executive acknowledges that the restrictions set forth
in Sections 17 and 18 are reasonable in scope and essential to the preservation of
the Business and proprietary properties that belong to the Company and that the enforcement
thereof will not in any manner preclude the Executive, in the event of the Executive’s
termination of employment with the Company, from becoming gainfully employed in such manner
and to such extent as to provide a standard of living for himself, the members of his
family, and those dependent upon him of at least the sort and fashion to which he and they
have become accustomed and may expect.




(c) Severability. The covenants of the Executive contained in Sections 16,
17 and 18 of this Agreement shall each be construed as an agreement independent of any
other provision in this Agreement, and the existence of any claim or cause of action of the
Executive against the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants. In the event that
any part of any covenant of this Agreement is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and it is their
desire, that such court shall, to the extent permitted, substitute a judicially enforceable
limitation in its place, and that as so modified, the covenant shall be binding upon the
parties as if originally set forth herein. Additionally, both parties hereby expressly agree
and contract that it is not the intention of either party to violate any public policy, or
statutory or common law, and that if any provision of this Agreement shall, for any reason,
be held unenforceable and a court is not permitted to substitute a judicially enforceable
limitation in its place, such provision shall be severed from this Agreement unless, as a
result of such severance, the Agreement fails to reflect the basic intent of the parties. If
the Agreement continues to reflect the basic intent of the parties, then the invalidity of
such specific provision shall not affect the enforceability of any other provision herein,
and the remaining provisions shall remain in full force and effect.




(d) Notices. Any notice required or permitted hereunder shall be made in
writing (i) either by actual delivery of the notice into the hands of the party thereunder
entitled, or (ii) by depositing the notice with a nationally recognized overnight delivery
service, all shipping costs prepaid and addressed to the party to whom the notice is to be
given, at the party’s respective address set forth below, or such other address as the
parties may from time to time designate by written notice as herein provided.



	 	 	 
	As addressed to the Company:

	 	With a copy to:
	Merge Technologies Incorporated

6737 W. Washington Street

Milwaukee, Wisconsin 53214-5650

Attention: Chief Executive Officer

	 	Merge Technologies Incorporated

6737 W. Washington Street

Milwaukee, Wisconsin 53214-5650

Attention: General Counsel
	 
	 	 
	As addressed to the Executive:

	 	

	Jacques Cornet, at the home address

on record with the Company

	 	










The notice shall be deemed to be received on the date of its actual delivery to the address
of the party entitled thereto.




(e) Amendment and Waiver. No amendment or modification of this Agreement shall
be valid or binding upon the Company unless made in writing and signed by an officer of the
Company duly authorized by the Board or upon the Executive unless made in writing and signed
by him. The waiver by the Company of the breach of any provision of this Agreement by the
Executive shall not operate or be construed as a waiver of any subsequent breach by him.




(f) Entire Agreement. This Agreement constitutes the entire Agreement between
the parties with respect to the Executive’s duties and compensation as an executive of the
Company, and there are no representations, warranties, agreements or commitments between the
parties hereto with respect to his employment except as set forth herein. No presumption
shall be made in favor or against either party based upon who has served as draftsman of
this Agreement.




(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the Province of Ontario
Canada.




(h) Assignment. The Executive may not under any circumstances assign any of his
rights or delegate any of his obligations hereunder without first obtaining the prior
written consent of the Company. This Agreement and all of the Company’s rights and
obligations hereunder may be assigned or transferred by it, in whole or in part, to be
binding upon and inure to the benefit of any parent, subsidiary or successor of the Company,
provided either the successor has a net worth greater than the Company at the time of
assignment or the Company remains primarily liable with respect to the obligations so
assigned.




(i) Costs of Enforcement, Litigation. In the event of any suit or proceeding
seeking to enforce the terms, covenants, or conditions of this Agreement, the prevailing
party shall, in addition to all other remedies and relief that may be available under this
Agreement or applicable law, recover his or its reasonable attorneys’ fees and costs as
shall be determined and awarded by the court. Any controversy or dispute with respect to the
terms of Section 14, 15, 16, 17 or 18 of this Agreement will survive termination of this
Agreement and shall be litigated in the courts of competent jurisdiction situated in the
Province of Ontario Canada, to which jurisdiction and venue all parties consent.




(j) Mitigation. The Executive shall not be obligated to seek other employment
in mitigation of the amounts payable under this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the Company’s obligations to make
payments hereunder. Notwithstanding the foregoing, if Executive receives the payments
described in Section 9 by terminating his employment following a Change in Control
and Executive subsequently becomes re-employed by the Company or by the party or parties
effecting the Change in Control, the amounts earned on re-employment (up to a period of one
year’s compensation) shall be repaid to the Company.



19. Executive Acknowledgement. The Executive acknowledges that:



(a) the Executive has had sufficient time to review this Employment Agreement thoroughly;



(b) the Executive has read and understands the terms of this Employment Agreement and the
obligations hereunder;



(c) the Executive has received good and adequate consideration for entering into this
Employment Agreement; and



(d) the Executive has been given an opportunity to obtain independent legal advice concerning
the interpretation and effect of this Employment Agreement.



IN WITNESS WHEREOF, the Company and the Executive have entered into this Agreement as of the
Effective Date.



	 
	 

	COMPANY:

	 

	MERGE TECHNOLOGIES INCORPORATED

	 

	By: /s/ Kenneth D. Rardin

	 

	Kenneth D. Rardin

President and Chief Executive Officer

	 

	EXECUTIVE:

	 

	By: /s/ Jacques Cornet

	 

	 

	Jacques Cornet