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EXHIBIT 10.23
Letter Agreement dated October 11, 2000 between Registrant and Xxxxxxx X. Xxxxxx
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WEBMD CORPORATION
0000 XXXXXXXXX XXXXXX XX
000 XXX XXXXX XXXXXXXX
XXXXXXX, XXXXXXX 00000
October 11, 2000
Xx. Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxx.
Xxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxx:
This letter agreement (the "Agreement") sets forth our mutual
agreement concerning your resignation as a director, executive officer and
employee of WebMD Corporation, a Delaware corporation (the "Company").
1. Resignation. Your employment with the Company and its
subsidiaries and affiliates will terminate in all capacities on October 11, 2000
(the "Effective Time"). This Agreement has been duly authorized by the Company's
Board of Directors (the "Board"). In that regard, you hereby resign, effective
as of the Effective Time, from your positions as Co-Chief Executive Officer and
a director of the Company and from all other officerships, directorships and
positions that you currently hold with the Company or any of its subsidiaries or
affiliates.
2. Severance Benefits. The Company will provide you with
the following severance payments and benefits:
(a) Severance. The Company will pay you an amount equal
to $4,000,000, payable on or before October 12, 2000 by wire transfer to an
account to be designated by you.
(b) Continuation of Insurance Coverage. The Company will
continue (or provide comparable substitute coverage) your health, dental,
disability and life insurance coverage, and continue to pay the employer portion
of the applicable premiums, until the earlier of the 18-month anniversary of the
Effective Time and the date on which you are covered under another comparable
plan. You agree to promptly notify the Company in writing in the event that you
obtain coverage under another such plan.
(c) 401(k) Plan. You will be entitled to receive your
vested accrued benefits under the Company's 401(k) plan in accordance with the
terms and conditions of such plan.
(d) No Other Compensation or Benefits. Except as
otherwise specifically provided herein, you will not be entitled to any
compensation or benefits or to participate in any past, present or future
employee benefit programs or arrangements of the Company or any of its
subsidiaries or affiliates after the Effective Time.
3. Company Stock Options. Your options (the "Options")
(i) to purchase 2,000,000 shares of the Company's common stock ("Common Stock"),
as evidenced by the
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Amended and Restated Stock Option Agreement dated as of September 12, 2000 (the
"Amended Option Agreement") between the Company and you, and (ii) to purchase an
additional 2,486,741 shares of Common Stock will remain subject to, and will be
exercisable in accordance with, the terms and conditions thereof (including,
without limitation, the Letter Agreement dated September 12, 2000 between the
Company and you (the "Letter Agreement") but without regard to the Employment
Agreement dated as of September 30, 1998 (the "Employment Agreement") between
the Company and you). It is hereby expressly agreed that the termination of your
employment will be treated as a termination without "cause" for purposes of the
Options (including, without limitation, for purposes of Sections 1 and 3 of the
Letter Agreement and Section 3(c)(ii) of the Amended Option Agreement), and all
of your Options shall, upon the Effective Time of this Agreement, become fully
vested and remain exercisable for ten years from their respective dates of
grant.
4. Restrictive Covenants. (i) The provisions of Exhibit
B to the Letter Agreement are incorporated herein by reference as if such
provisions were set forth herein in full.
(ii) The first paragraph of Section 2 of Exhibit B to the
Letter Agreement is hereby amended to add the following to the end thereof:
"provided, further, that this provision shall not prevent or impair
Xxxxxx from engaging in raising donations for public charitable
purposes for existing not-for-profit nationally recognized charitable
organizations engaged in a Competitive Business so long as (i) he is
not employed by, and does not become an officer, director or trustee or
serve in a similar capacity of or receive compensation or other profit
from such not-for-profit charitable organization and (ii) such
activities do not relate to or involve such Competitive Business other
than to the extent such raising of donations presents consumer-oriented
health and wellness information in furtherance with the not-for-profit
charitable organization's mission."
5. Cooperation. From and after the date hereof through
the third anniversary of the Effective Time you will (i) cooperate in all
reasonable respects (after taking into account any employment obligations you
may have) with the Company and its affiliates and their respective directors,
officers, attorneys and experts in connection with the conduct of any action,
proceeding, investigation or litigation brought by a third party other than the
Company, involving the Company or any of its affiliates, including any such
action, proceeding, investigation or litigation in which you are called to
testify relating to matters involving facts or events relating to the Company
that arose during your employment with the Company and (ii) promptly respond to
all reasonable requests by the Company and its affiliates relating to
information concerning actual customers of the Company during your employment
which may be in your possession, and that you received during your employment
with the Company. The Company will, as a condition to your obligations under
this Section 5, reimburse you for any reasonable out of pocket expenses incurred
as a result of such cooperation, provided that such expenses have been approved
in writing in advance by the Chief Executive Officer or Chief Financial Officer
of the Company.
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6. Return of Property. Within 10 days after the
Effective Time, you will surrender to the Company all property of the Company
and its affiliates in your possession and all property made available to you in
connection with your employment by the Company, including, without limitation,
any and all records, manuals, customer lists, notebooks, computers, computer
programs and files, papers, electronically stored information and documents kept
or made by you in connection with your employment; provided, however, that you
will be permitted to retain the property listed on Annex A hereto. You will be
given reasonable access to Company premises through October 18, 2000 to retrieve
your personal property. Notwithstanding the foregoing, the Company shall have
the right to retrieve any electronically stored information which is found or
stored in any of the computer equipment listed on Annex A which is otherwise
property owned by the Company or any of its subsidiaries or affiliates and take
any action necessary to delete all such information from the computer
equipment's hard-drive or other memory device.
7. Communications. You and the Company agree that the
press release and related statement regarding your termination of employment
will be in the form attached hereto as Annex B, and that no subsequent comments
should be made to the media or through other public statements by either party
or by any subsidiary, officer or director of the Company regarding your
termination of employment that are inconsistent with such statement. From and
after the Effective Time, you will refrain from taking actions or making public
statements, written or oral, which denigrate, disparage or defame the goodwill
or reputation of the Company and its subsidiaries and their former and current
executive officers and directors. From and after the Effective Time, the Company
will refrain, and will cause its executive officers and directors to refrain,
from taking actions or making public statements, written or oral, which
denigrate, disparage or defame your reputation. The restrictions set forth in
this Section 7 will be subject to such exceptions as are required by law or in
connection with a judicial proceeding.
8. Release. (a) General Release. In consideration of the
Company's obligations under this Agreement and for other valuable consideration,
you hereby release and forever discharge the Company, its subsidiaries and
affiliates and each of their respective officers, employees, directors and
agents (the "Company Releasees") from any and all claims, actions and causes of
action (collectively, "Claims"), including, without limitation, any Claims
arising under any applicable federal, state, local or foreign law, that you may
have, or in the future may possess, arising out of (x) your employment
relationship with and service as a director, employee or officer of the Company
or any of its subsidiaries or affiliates, and the termination of such
relationship or service, or (y) any event, condition, circumstance or obligation
that occurred, existed or arose on or prior to the date hereof; provided,
however, that the release set forth in this Section 8(a) will not apply to (A)
the obligations of the Company under this Agreement, (B) the obligations of the
Company and its subsidiaries to continue to provide director and officer
indemnification pursuant to the agreement dated as of April 22, 1998 (the
"Indemnification Agreement") between Endeavor Technologies Inc., a predecessor
to the Company, and you, which Indemnification Agreement is hereby assumed by
the Company, and Section 10 of this Agreement and (C) your right or ability to
assert in good faith any facts by way of defense (or counterclaim arising from
the same set of facts) against any Claim asserted against you by the Company
pursuant to clause (B) of the proviso to Section 8(b). You further agree that
the payments and benefits described in this Agreement will be in full
satisfaction of any and all claims for payments or benefits, whether express or
implied, that you may have
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against the Company or any of its subsidiaries or affiliates arising out of your
employment relationship, your service as a director, employee or officer of the
Company or any of its subsidiaries or affiliates and the termination thereof.
You hereby acknowledge and confirm that you are providing the release and
discharge set forth in this Section 8(a) only in exchange for consideration in
addition to anything of value to which you are already entitled. You acknowledge
and agree that if you should hereafter make any claim or demand or commence or
threaten to commence any action, claim or proceeding against the Company
Releasees with respect to any cause, matter or thing which is the subject of
this Section 8(a), this Agreement may be raised as a complete bar to any such
action, claim or proceeding, and the applicable Company Releasee may recover
from you all costs incurred in connection with such action, claim or proceeding,
including attorneys' fees.
(b) Company Release. The Company and its subsidiaries and
affiliates (the "Company Releasors") hereby release and forever discharge you,
your estate and your legal representatives (the "Individual Releasees") from any
and all Claims, including, without limitation, any Claims arising under any
applicable federal, state, local or foreign law, that it may have, or in the
future may possess, arising out of (x) your employment relationship with and
service as a director, employee or officer of the Company or any of its
subsidiaries or affiliates or predecessors, and the termination of such
relationship or service, or (y) any event, condition, circumstance or obligation
that occurred, existed or arose on or prior to the date hereof; provided,
however, that the release set forth in this Section 8(b) will not apply to (A)
your obligations under this Agreement and the plans and agreements referred to
herein and (B) any Claim which the Company has against you arising out of
fraudulent conduct by you. The Company acknowledges and agrees that if it or any
other Company Releasor should hereafter make any claim or demand or commence or
threaten to commence any action, claim or proceeding against you or the
Individual Releasees with respect to any cause, matter or thing which is the
subject of this Section 8(b), this Agreement may be raised as a complete bar to
any such action, claim or proceeding, and you or the applicable Individual
Releasee may recover from the Company Releasors all costs incurred in connection
with such action, claim or proceeding, including attorneys' fees.
9. Consulting Engagement. (i) In consideration of the
payments and benefits provided to you hereunder, you agree to serve as a
consultant to the Company for the period (the "Consulting Period") beginning at
the Effective Time and ending on the fourth anniversary thereof. Your services
hereunder during the Consulting Period will consist of such consulting and
advisory services, and will be provided at such times, as may be reasonably
requested (after taking into account any obligations you may have to another
employer) from time to time by W. Xxxxxxx Xxxx; provided, however, that such
services will not be required for more than 4 days during any one-month period;
provided further, however, that you will not be required to perform such
services at the request of any person other than W. Xxxxxxx Xxxx, and that such
services may be performed at the location of your choice. The Company will
reimburse you for any reasonable out-of-pocket expenses incurred by you in
connection with the performance of such consulting and advisory services,
provided that such expenses shall not be required to be incurred by you, and
shall not be reimbursed, unless such expenses have been approved in writing in
advance by the Chief Executive Officer or Chief Financial Officer of the
Company.
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(ii) You will have no authority to bind, or make any
commitments or otherwise act on behalf of, or conduct or participate in any
discussions on behalf of, the Company or any of its subsidiaries or affiliates
in any manner whatsoever after the Effective Time without the prior written
authorization of the Board. You agree not to take any action which would cause
any third party to assume that you have such authority.
10. Indemnification. The Company shall continue to
provide, and shall cause its subsidiaries to continue to provide you with
indemnification, expense advancement, exculpation of liabilities and directors
and officers liability insurance, with respect to actions or inactions by you as
an officer or director of the Company (or any of its subsidiaries) prior to the
Effective Time to the fullest extent permitted by law.
11. No Set-Off or Mitigation. The Company's obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against you or others. Except as specifically provided in this Agreement, in no
event shall you be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to you under any of the provisions
of this Agreement, and such amounts shall not be reduced whether or not you
obtain other employment.
12. Miscellaneous.
(a) Entire Agreement. This Agreement, the Amended Option
Agreement (including, without limitation, Section 8 thereof), the Letter
Agreement and the related Option plans and award documents and the
Indemnification Agreement (collectively, the "Applicable Agreements") set forth
the entire agreement and understanding of the parties hereto with respect to the
matters covered hereby and supersede and replace any express or implied prior
agreement with respect to the terms of your employment and the termination
thereof which you may have had with the Company or any of its subsidiaries or
affiliates (including, without limitation, (i) the Employment Agreement and (ii)
the first sentence of Section 9 of the Amended Option Agreement). This Agreement
may be amended only by a written document signed by the parties hereto.
(b) Governing Law. This Agreement and, notwithstanding
any provision to the contrary contained therein, the other Applicable
Agreements, will be governed by, and construed in accordance with, the laws of
the State of Delaware (without reference to the choice of law provisions of
Delaware law) applicable to contracts executed and to be wholly performed within
such State, and the State or Federal court sitting in New Castle County,
Delaware will have exclusive jurisdiction of the Company and you for purposes of
adjudicating any disputes under any Applicable Agreement. The Company and you
hereby consent to personal jurisdiction and venue in the State or Federal court
sitting in New Castle County, Delaware and hereby waive any claim or defense
that the party lacks minimum contacts with the forum, that such State or Federal
court lacks personal jurisdiction of the parties, or that such State or Federal
court is an improper or inconvenient venue.
(c) Withholding Taxes. Any payments made or benefits
provided to you under this Agreement will be reduced by any applicable
withholding taxes.
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(d) Notices. Any notices required or made pursuant to
this Agreement will be in writing and will be deemed to have been given when
delivered or mailed by United States certified mail, return receipt requested,
postage prepaid, as follows:
if to Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx Xxx.
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
if to the Company:
Xxxx Xxxxxxxx, Esq.
WebMD Corporation
0000 Xxxxxxxxx Xxxxxx XX
000 Xxx Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as either party may furnish to the other in writing in
accordance with this Section 12(d). Notices of change of address will be
effective only upon receipt.
(e) Expenses. The Company will reimburse you for any
unreimbursed reasonable business expenses incurred by you prior to the Effective
Time (including airfare from New York City to Atlanta, Georgia on October 12,
2000), pursuant to the Company's reimbursement policies, following your
presentation of an expense report to the Company. In addition, the Company shall
reimburse you for reasonable fees and expenses of your legal and tax accounting
advisors incurred in connection with the negotiation and execution of this
Agreement not to exceed $75,000 in the aggregate.
(f) Enforceability/Severability. The parties hereto
affirmatively acknowledge that this Agreement, and each of its provisions, is
enforceable, and expressly agree not to challenge nor raise any defense against
the enforceability of this Agreement or any of its provisions in the future. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
In the event that any provision or portion of this Agreement shall be determined
to be invalid or
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unenforceable for any reason, the remaining provisions or portions of this
Agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.
(g) Successors. This Agreement shall be binding on you
and the Company and your's and the Company's respective heirs, successors and
assigns, including without limitation any corporation or other entity into which
the Company may be merged, reorganized or liquidated. Your obligations under
this Agreement may not be assigned. The obligations of the Company under this
Agreement may not be assigned except to a successor to all or substantially all
of the business or assets of the Company or by operation of law. In the event of
your death, all future payments hereunder will be made to your estate or
designated beneficiary.
WEBMD CORPORATION
By /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President --
Co-General Counsel
Accepted and Agreed:
/s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Dated: October 11, 2000
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