1
Exhibit 10.12
XXX XXXXXXXXX
Xxxxxxxx 00, 0000
Xxxxxx X. Xxxxxxxx, M.D.
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx 0X
Xxxxxxx, XX 00000
EMPLOYMENT AGREEMENT
Dear Xxxxxx,
I'm thrilled to extend to you an offer to join the senior execution
team of Medscape, Inc. ("Medscape" or the "Company") as Editor-in-Chief, on the
following terms and conditions.
1. DUTIES. As Editor-in-Chief, you will report to the Chief Executive
Officer of the Company, and be responsible for (i) setting and enforcing
Medscape's editorial strategy and guidelines, with the mutual goals of
maintaining absolute editorial integrity and ensuring that Medscape
becomes the standard of excellence for online healthcare content; and (ii)
cultivating Medscape's strategic relationships with major medical
universities and associations. You will be Medscape's "Ambassador at
Large," carrying your twin messages of editorial integrity and excellence
to the world through speaking engagements, professional associations and
press interviews. We would also fully expect and welcome your ideas and
suggestions on Medscape's strategic positioning and promotion to our core
audiences of physicians, allied healthcare professionals and consumers.
Your role at Medscape will be your primary professional commitment, but
you will be permitted to retain and continue your part-time teaching
positions, independent speaking engagements, seats on foundation boards
and medical committee, and consulting to companies and organizations,
subject to the noncompete provisions of Section 4 below.
2. COMPENSATION AND BENEFITS. Your compensation package would consist
of base salary, options, office and secretarial allowances, vacation and
other benefits, as follows:
a. Base Salary. Your salary shall be $200,000, payable in
accordance with
2
our standard Company payroll practices. You shall earn on a pro rata
a basis an annual cash bonus of at least $25,000, payable on each
anniversary of your Start Date. Your salary shall be reviewed by the
Medscape CEO on each anniversary of your Start Date.
b. Incentive Stock Options. On your Start Date, you will be
granted incentive options to purchase 60,000 shares of Class B
Common Stock of Medscape, par value $.01 per share, at the fair
market value as determined by the Board of Directors ("Incentive
Options"). The Company's Stock Option Plan provides that Incentive
Options vest over a period of 4 years as follows: one quarter of the
Options with become exercisable on the first anniversary of your
Start Date, and the balance of the Incentive Options will become
exercisable in equal monthly installments over the succeeding three
years, such that all these Incentive Options will be fully vested
over four full years of employment. Incentive Options are issued
pursuant to, and are subject to the terms of, the Company's Stock
Option Plan and Agreement, copies of which are being forwarded to
you. The Option Plan provides, among other things, that all options
must be exercised within 10 years after date of grant.
c. Office, Equipment and Secretarial Allowances. The Company
shall pay for all reasonable office, office equipment (computers,
copy machines, etc.) and secretarial expenses in Chicago or Boston,
and, of course, provide you a place to hang your hat here in our hip
offices on 00xx Xxxxxx. Your secretary shall be a Medscape employee.
The Company shall pay (or promptly reimburse you) for all reasonable
travel (domestic - coach; international - business class) and
entertainment expenses relating to your role at Medscape. The
Company shall also pay for all your business-related cellular phone
charges.
d. Association Dues. Medscape would pay for your membership dues
for professional associations up to a maximum of $2,000 per year.
e. Vacation. You shall be entitled to four weeks of paid vacation
each year.
f. Health and Life Insurance. You shall be eligible for all
standard medical, dental, disability and life insurance coverages
offered by the Company to its full-time employees, summaries of
which shall be promptly delivered to you.
3. TERM & TERMINATION. The initial term of your employment shall
commence as of February 15, 1999 (the "Start Date") and expire on the
fourth anniversary of the Start Date.
a. Termination for Good Cause. The Company may terminate you for
"Good Cause," as defined below, at any time by written notice (the
"Good Cause Termination Notice"). Within 10 days after the effective
date of such Notice, the Company shall pay you any unpaid salary
(including any accrued but unpaid bonus amount) accrued through the
effective date of such termination, and no
3
severance amounts shall be paid, and all Options unvested as of the
effective date of Good Cause Termination Notice shall be
extinguished. For purposes of this Agreement, "Good Cause" means
gross misconduct (including acts or omissions) in connection with
your duties hereunder, conviction of a felony, material breach by
you of this Agreement that is not substantially cured within 30
business days after receipt of written notice from Medscape of such
breach, or any act or omission involving fraud, embezzlement or
theft in connection with your employment hereunder.
b. Other Termination. If your employment terminates for any
reason other than those specified in clauses (a), (c), (d) or (e) of
this Section 3, within 30 days after such termination (i) the
Company shall pay you any unpaid salary (including any accrued but
unpaid bonus pay) accrued through the effective date of such
termination, (ii) any Options that have been awarded hereunder but
have not yet fully vested shall vest upon such termination; and
(iii) you shall receive a severance payment equal to your annual
salary and annual bonus in effect at the time of such termination.
c. Termination Upon Death. In the event of your death, your
employment hereunder shall be terminated effective as of the date of
such death, and the Company shall pay your estate within 30 days
after such date any unpaid salary (including any accrued but unpaid
bonus pay) accrued through the effective date of such termination,
and no severance amounts shall be paid, and all options vested as of
the date of such death shall be exercisable in accordance with the
provisions of the Stock Option Plan, and all unvested options as of
such date shall be extinguished.
d. Termination Upon Disability. In the event of your "Disability"
(as defined below), the Company may terminate your employment upon
not less than 30 days' prior written notice (the "Disability
Notice"). "Disability" means a mental or physical condition that
renders you incapable of performing your duties and obligations
under this for a period of six consecutive months, or more than 210
days in any eight month period, in the written opinion of a
competent physician specializing in such condition selected by the
Company's Board of Directors who has personally evaluated and
examined you. You agree to submit to appropriate medical examination
by such physician at the Company's expense and such physician's
determination shall be final. Within 10 days after the Disability
Notice, the Company shall pay you any unpaid salary (including any
accrued but unpaid bonus amount) accrued through the effective date
of such termination, and no severance amounts shall be paid, and all
Options unvested as of the effective date of Disability Notice shall
be extinguished.
e. Voluntary Termination by You. You may terminate this Agreement
at any time by giving the Company 60 days' prior written notice
("Voluntary Termination Notice"). Within 10 days after the effective
date of the Voluntary Termination Notice, the Company shall pay you
any unpaid salary (including any
4
accrued but unpaid bonus amount) accrued through the effective date
of such termination, and no severance amounts shall be paid, and all
Options unvested as of the effective date of Voluntary Termination
Notice shall be extinguished.
4. NON-COMPETE. During the term of this Agreement and for one year
following the expiration or termination of your employment, you agree that
you will not, as an employee, director, owner or consultant or otherwise,
compete, directly or indirectly, with the business of Medscape; provided,
however, that you may (i) own less than 2% of outstanding stock of public
companies that compete with Medscape; and (ii) engage in occasional
writing assignments for print publications. For purposes hereof, the term
"business of Medscape" means the business of providing medical, health,
wellness and related information or services in electronic form on the
internet, dedicated networks or successors thereto, over-the-air,
broadcast (TV and cable) and related means; provided, however, that this
in no way prevents you from appearing on radio, TV or cable programs that
are not competitive with Medscape's business. In addition, you agree that
for the one year period following termination of your employment with the
Company, you will not (i) solicit, divert or take away, or attempt to
solicit, divert or take away, the business or patronage of any of the
clients, customers or accounts of the Company (except on behalf of a
business unrelated to the business of the Company); or (ii) encourage or
solicit any employee of the Company to leave the employ of the Company for
any reason. The restrictions contained in this Section 4 and in Section 5
of this Agreement are necessary for the protection of the business and
goodwill of the Company and are considered by you to be reasonable for
such purpose. You agree that any breach of this Section 4 or Section 5 by
you is likely to cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, you agree that the Company, in
addition to any other remedies that may be available, shall be entitled to
specific performance and other injunctive relief, without proving actual
damages. If any restriction set forth in this Section 4 or in Section 5 is
found by any court of competent jurisdiction to be unenforceable because
it extends for too long a period of time or over too great a geographic
area, it shall be interpreted to extend only over the maximum period of
time, range of activities or geographic area as to which it may be
enforceable.
5. CONFIDENTIAL INFORMATION. You agree not to disclose or use
"Confidential Information," as defined below, of the Company except in
connection with your employment with the Company. "Confidential
Information" means all information in any manner relating to the Company's
business including, but not limited to, information regarding business
plans and strategies, trade secrets, "know how," inventions, software,
finances, markers, properties, methods of doing business, processes,
customers, and employee compensation, whether or not such information is
labeled as confidential. Notwithstanding the foregoing, no information
will be deemed "Confidential Information" if such information (i) is or
becomes part of the public knowledge or literature from a source other
than you or a source acting on your behalf; (ii) is received by you in
writing, without binder of secrecy, from a third party entitled to convey
such information to the public; or (iii) is required by law or a court
order to be disclosed. Upon termination or expiration of this Agreement,
you will deliver to the Company all equipment, records, copies of records
and any other Confidential
5
Information in written or electronic form then in your possession. You
agree that any developments by way of design, copyright, trademark,
software, electronic medical publication or service concept or other
matters which may be developed or perfected by you during the term of this
Agreement, and which relate to the business of Medscape, shall be the
property of the Company. You will assign and will transfer the same to the
Company together with any copyrights, trademarks and applications
therefor.
6. MISCELLANEOUS.
a. Entire Agreement. This Agreement, together with the Option
Agreement and Option Plan referred to herein, constitutes the entire
Agreement between the parties with respect to the subject matter
hereof, and supersedes all prior agreements relating hereto. No
amendment hereto shall be effective unless in writing and signed
both parties.
b. New York Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York,
applicable to contracts made and performed in New York.
c. Arbitration. Any dispute between you and the Company with
respect to the terms of this Agreement, or any claim arising out of
or relating to this Agreement, will be submitted to and be settled
by final and binding arbitration.
d. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall
be construed, if possible, so as to be enforceable under applicable
law; if such construction is not possible, then such provision shall
be excluded from this Agreement and the balance of the Agreement
shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
e. Successors and Assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and shall
be binding upon the successors and assigns of the Company. You shall
no be entitled to assign any of his rights or obligations under this
Agreement.
f. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon
delivery as evidenced by delivery receipt via overnight delivery
services or registered or certified mail to the addresses set forth
on the signature page, or such other address as either party shall
designate to the other in accordance with this provision.
g. Waiver. A waiver by either party of any breach hereof by the
other party shall not be construed as a waiver of any subsequent
breach.
h. Counterparts. This agreement may be executed in counterparts
with the same force and effect as if each signatory had executed the
same instrument.
15
6
If acceptable, please sign both copies of this letter agreement and
return one fully-executed original to me, and welcome to Medscape.
Very truly yours,
MEDSCAPE, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx
President & CEO
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxx, M.D. 2/15/99
