EXHIBIT 10.78
AGREEMENT AND COMPLETE RELEASE
WHEREAS Xxxxxx Xxxx (hereinafter "Xxxx") and xxxxxx.xxx, Incorporated
(hereinafter "xxxxxx.xxx") wish to end the employment relationship between them
and to fully and finally resolve all differences between them, the following
constitutes their AGREEMENT:
In exchange for the mutual covenants herein expressed, the parties agree as
follows:
1. Xxxx shall resign from his employment effective on July 5, 2000 (the
"Termination Effective Date") and xxxxxx.xxx shall pay to Xxxx any unpaid
base salary, bonuses, and accrued but unused 1999 and 2000 vacation earned
by Xxxx prior to the Termination Effective Date. The Employment Agreement of
January 15, 1999, between Xxxx and xxxxxx.xxx shall terminate as of July 5,
2000. (A copy of the Employment Agreement is attached hereto as Exhibit A.)
Xxxx'x resignation shall be deemed a termination of his employment without
cause for purposes of all stock option exercise periods. Notwithstanding the
termination of the Employment Agreement, Xxxx shall remain bound by his
promises regarding nondisclosure and return of confidential information,
assignment of intellectual property, non-competition, and non-solicitation
as set forth in Article V of the Employment Agreement; provided, however, as
to the provisions regarding non-competition in Section 5.4 of the Employment
Agreement, that the entities regarded as "Competing Businesses" are hereby
limited to the following: Medica Logic/Medscape, Inc., Discover Health,
Xxxxxxxxxxxxx.xxx, Healtheon/WebMD/onhealth, and Mediconsult. Further, the
restrictions on solicitation of xxxxxx.xxx employees set forth in Section
5.4 and 5.5 of the Employment Agreement are hereby waived as to individuals
who initiate contact with Xxxx for employment opportunities.
2. In consideration for this Agreement, xxxxxx.xxx will: (a) pursuant to the
xxxxxx.xxx, Inc. Severance Plan For Select Employees and as a vested,
accrued and irrevocable benefit thereunder provided that Xxxx does not
breach this Agreement, pay Xxxx the gross sum of $140,000.00, less all
applicable withholdings, in twelve monthly installments beginning on the
first regularly scheduled pay day following full execution of this
Agreement; (b) allow Xxxx to keep his laptop computer and cell phone; (c)
pay Xxxx'x COBRA premiums for three months, unless his entitlement to COBRA
continuation coverage terminates earlier; (d) forgive Xxxx'x obligations
under the Note dated November 24, 1999; (e) reimburse Xxxx for the actual
attorney's fees and costs incurred by him in the negotiation of this
Agreement, estimated to be in the approximate amount of $5,000.00; (f) have
amended all Xxxx'x outstanding stock option agreements such that the shares
subject to the options are fully vested and the options are immediately
exercisable (such amendments are attached as Exhibits B, C, D, and E
hereto); and (g) have granted a new nonqualified stock option to purchase
50,000 shares at an option price of $1.63 per share (such stock option
agreement is attached as Exhibit F hereto).
3. In consideration for this Agreement, Xxxx will: (a) provide his services as
an independent contractor-consultant in the capacity of Acting Chief
Operating Officer to assist xxxxxx.xxx in the transition to a new Chief
Operating Officer as provided in Exhibit G; and (b) abide by his promises
herein.
4. Xxxx understands, agrees, and expressly represents that the consideration
recited in the foregoing Paragraph 2 is separate from and additional to any
payments or benefits to which he was already entitled by virtue of his
services to xxxxxx.xxx and to which he has no legal right. Xxxx understands,
agrees, and expressly represents that, apart from the consulting arrangement
described above in Paragraph 3 and Exhibit G, he will be entitled to no
further compensation or payments of any type from xxxxxx.xxx.
5. Apart from the consulting arrangement described above in Xxxxxxxxx 0, Xxxx
WAIVES AND DISCLAIMS any claim or right he may have to be engaged or
employed by xxxxxx.xxx or any of its affiliate companies at any time in the
future and promises not to seek or demand future engagement or employment
with xxxxxx.xxx or any of its affiliate companies, it being agreed, however,
that this provision shall not preclude xxxxxx.xxx from requesting on its
initiative and in its sole discretion that Xxxx be employed by it, or
subsequently employing Xxxx, in the future.
6. Xxxx represents and affirms that within two (2) business days of the
termination of his consulting arrangement with xxxxxx.xxx he will return any
and all xxxxxx.xxx property he may have had, including but not limited to
confidential information as defined in the Employment Agreement but
excluding the cell phone and laptop computer conveyed to Xxxx as provided in
Paragraph 2.
7. Xxxx agrees to keep both the existence and the terms of this Agreement
confidential, and not to disclose any information regarding this Agreement
to anyone other than his attorneys, tax advisors, and spouse (if any) who
shall be informed of and bound by this confidentiality provision.
8. Xxxx does, for himself and his heirs, agents, executors, administrators, and
assigns hereby RELEASE and FOREVER DISCHARGE xxxxxx.xxx and its directors,
officers, employees, agents, attorneys, successors, predecessors, assigns,
and affiliated companies (collectively "Releasees") from any and all claims,
actions, and causes of action of whatever kind or nature, which he may now
have or ever may have had against the Releasees or any of them, whether
known or unknown to him, such as may have arisen in whole or in part at any
time prior to or on the date of execution of this Agreement. This includes,
but is not limited to, any claims arising out of any contract, express or
implied, any covenant of good faith and fair dealing, express or implied,
any tort (whether
intentional or negligent, including claims arising out of the NEGLIGENCE OR
GROSS NEGLIGENCE of any person released in this Agreement), and any
federal, state, or other governmental statute, regulation, or ordinance
relating to employment discrimination, termination of employment, or
payment of wages or provision of benefits, including without limitation,
Title VII of the Civil Rights Act of 1964 as amended, the Civil Rights Act
of 1991, the Americans with Disabilities Act, the Employee Retirement
Income Security Act, the Family and Medical Leave Act, the Fair Labor
Standards Act, the Texas Commission on Human Rights Act, the Texas Payday
Law, and the Texas Workers' Compensation Act.
9. xxxxxx.xxx does for itself and its directors, officers, employees, agents,
attorneys, successors, predecessors, assigns, and affiliated companies,
does hereby RELEASE and FOREVER DISCHARGE Xxxx from any and all claims,
actions, and causes of action of whatever kind or nature, which they, or
any of them, may now have or ever may have had against Xxxx whether known
or unknown to them, such as may have arisen in whole or part at any time
prior to or on the date of execution of this Agreement. This Release
includes, but is not limited to, any claims arising out of any contract,
express or implied, any covenant of good faith and fair dealing, express or
implied, any tort (whether intentional or negligent, including claims
arising out of the NEGLIGENCE OR GROSS NEGLIGENCE of any person released in
this Agreement), and any federal, state, or other governmental statute,
regulation, or ordinance of any kind whatsoever.
10. The parties hereto expressly PROMISE NOT TO XXX OR INSTITUTE OTHER LEGAL
PROCEEDINGS on the basis of any claims, actions, or causes of action that
are being released by this Agreement. Each party understands and agrees
that if he or it breaches this promise and files a lawsuit or institutes
other legal proceedings with any court or governmental agency, he or it
will pay for all costs incurred by the released party or parties, or any of
them, including attorneys' fees.
11. Each party hereto understands and agrees that by entering into this
Agreement, neither Xxxx nor xxxxxx.xxx is admitting any liability or
wrongdoing. Rather, each party understands and agrees that this Agreement
is merely to settle any differences between them arising out of Xxxx'x
relationship with xxxxxx.xxx and the termination of that relationship.
12. Xxxx agrees that he will not knowingly, directly or indirectly, in any
individual or representative capacity whatsoever, make any statement, oral
or written, or perform any act or omission that is or could be detrimental
in any material respect to the reputation or goodwill of xxxxxx.xxx or any
other person or entity released herein except as may be required by law,
court order, government agency request or subpoena, or to defend himself in
connection with a legal proceeding. Xxxx further agrees he will not
voluntarily participate in, or aid or encourage any other party in
connection with, any lawsuit or proceeding of any kind brought or asserted
by any person or entity against xxxxxx.xxx or any other person or entity
released herein.
13. xxxxxx.xxx agrees that it will not knowingly make any statement, oral or
written, or perform any act or omission which is or could be detrimental in
any material respect to the reputation or goodwill of Xxxx except as may be
required by law, court order, government agency request or subpoena, or to
defend itself in connection with a legal proceeding. xxxxxx.xxx's
obligations under this paragraph shall be limited to statements made by any
officer who was an officer of xxxxxx.xxx at the time the statement was
made. In response to inquiries from prospective employers, xxxxxx.xxx will
provide nothing less than a neutral letter of reference.
14. xxxxxx.xxx and Xxxx agree that press releases regarding Xxxx'x resignation
will be mutually acceptable.
15. Xxxx hereby agrees that he is solely responsible for all federal, state,
and local tax obligations, if any, including, but not limited to, all
reporting and payment obligations that may arise as a consequence of this
Agreement. Xxxx acknowledges that xxxxxx.xxx and the other persons or
entities released herein make no representations regarding the tax
treatment or consequences of such benefit(s). Xxxx agrees to indemnify and
hold xxxxxx.xxx and the other persons or entities released herein, or any
of them, harmless from and against any and all loss, cost, damage, or
expense, including, without limitation, attorneys' fees, penalties, or
interest, incurred by the xxxxxx.xxx and the other persons or entities
released herein, or any of them, arising out of the tax treatment of the
benefit(s) received by Xxxx as a result of his employment with xxxxxx.xxx,
his stock options, his services as a consultant, or this Agreement.
16. Xxxx and xxxxxx.xxx agree that any dispute or claim relating to, arising
from, or connected in any manner with this Agreement--except for claims
concerning Xxxx'x promises regarding nondisclosure and return of
confidential information, assignment of intellectual property, non-
competition, and non-solicitation as set forth in Article V of the
Employment Agreement--exclusively shall be resolved through final and
binding arbitration. Claims concerning Xxxx'x promises regarding
nondisclosure and return of confidential information, assignment of
intellectual property, non-competition, and non-solicitation as set forth
in Article V of the Employment Agreement may be submitted to arbitration
upon mutual consent of the parties. The arbitration shall proceed in accord
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association ("AAA") in effect at the time the claim or
dispute arose, unless other rules are agreed upon by the parties. The
arbitration shall be conducted in Austin, Texas, by one arbitrator who is a
member of the AAA, unless the parties mutually agree otherwise. The
arbitrator shall have jurisdiction to determine any claim, including the
arbitrability of any claim, submitted to her or him. The arbitrator may
grant any relief authorized by law for any properly established claim.
Prior to the hearing, the AAA exclusively shall have the authority to
determine and allocate filing and administrative fees and arbitrator's
hearing and study fees
between the parties. The arbitrator may reallocate the pre-hearing fees,
costs, and expenses incurred by the parties in any final arbitration award
in accordance with Paragraph 10. The interpretation and enforceability of
this Paragraph of this Agreement exclusively shall be governed and
construed in accord with the United States Federal Arbitration Act, 9
U.S.C. (S)1, et. seq.
17. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all other agreements
between the parties with respect to the subject matter hereof. No waiver,
amendment, or modification of this Agreement shall be valid unless in
writing and signed by each of the parties.
18. The provisions of this Agreement are severable. If any provision is held to
be invalid or unenforceable, it shall not affect the validity or the
enforceability of any other provision.
19. This Agreement shall be interpreted and enforced under the laws of the
state of Texas.
XXXX UNDERSTANDS THAT HE HAS THE RIGHT TO DISCUSS ALL ASPECTS OF THIS
AGREEMENT AND COMPLETE RELEASE ("AGREEMENT") WITH AN ATTORNEY OF HIS CHOICE. BY
HIS SIGNATURE BELOW, XXXX AGREES THAT HE HAS EXERCISED THIS RIGHT TO THE EXTENT
HE DESIRED, THAT HE HAD A SUFFICIENT PERIOD OF TIME TO REVIEW THIS AGREEMENT,
THAT HE FULLY UNDERSTANDS THIS AGREEMENT, AND THAT THIS AGREEMENT IS MADE
KNOWINGLY AND VOLUNTARILY.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS THEREOF, the parties have affixed their signatures in the spaces
provided on this 28 day of June, 2000.
xxxxxx.xxx, Inc. Xxxxxx Xxxx, An Individual
BY: /s/ Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxx
------------------ ---------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXX )
BEFORE ME, the undersigned notary public, on this day personally appeared
XXXXXX XXXX, known to me to be the person who executed the foregoing instrument,
and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN under my hand and seal of office, this 28 day of June, 2000.
/s/ Xxxxxx Xxxxxxxx
-------------------
Notary Public in and for the State of Texas
EXHIBIT B
AMENDMENT TO JANUARY 8, 1999
EMPOWER HEALTH CORPORATION INCENTIVE STOCK OPTION AGREEMENT
FOR XXXXXX XXXX
THIS AMENDMENT ("Amendment") is entered into by and between Xxxxxx
Xxxx ("Employee") and the Compensation Committee (the "Committee"), effective as
of July 5, 2000, the date prior to the date Employee's employment with
xxxxxx.xxx, Inc. (the "Company") is terminated (the "Effective Date").
WHEREAS, Employee and the Company are parties to the Empower Health
Corporation Incentive Stock Option Agreement with a date of grant of January 8,
1999 (the "Agreement"), granted pursuant to the Empower Health Corporation
Amended and Restated 1997 Stock Option Plan (the "Plan"); and
WHEREAS, the Committee has been appointed pursuant to Section 2 of the
Plan; and
WHEREAS, pursuant to Section 4(B) of the Plan, the Committee may
change the vesting schedule of any outstanding option; and
WHEREAS, the Committee and Employee now desire to amend the Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual benefits to the parties arising out of this Amendment, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Committee and
Employee agree that the Agreement shall be amended as follows:
1. As of the Effective Date, Section 3 of the Agreement shall be amended by
adding the following provision:
Notwithstanding the foregoing, in the event that Optionee resigns from
employment with the Company, all shares subject to this Option shall vest
immediately and such Option shall be fully exercisable.
2. As amended hereby, the Agreement is ratified and reaffirmed.
EXECUTED this 27 day of July, 2000.
SECRETARY FOR BOARD OF DIRECTORS MEETING
/s/ Xxxxxx Xxxxxxx
------------------
XXXXXX X. XXXX
/s/Xxxxxx Xxxx
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EXHIBIT C
AMENDMENT TO JUNE 4, 1999
XXXXXX.XXX, INC. INCENTIVE STOCK OPTION AGREEMENT
FOR XXXXXX XXXX
THIS AMENDMENT ("Amendment") is entered into by and between Xxxxxx
Xxxx ("Employee") and the Compensation Committee (the "Committee"), effective as
of July 5, 2000, the date prior to the date Employee's employment with
xxxxxx.xxx, Inc. (the "Company") is terminated (the "Effective Date").
WHEREAS, Employee and the Company are parties to the xxxxxx.xxx, Inc.
Incentive Stock Option Agreement with a date of grant of June 4, 1999 (the
"Agreement"), granted pursuant to the 1999 Equity Participation Plan of
xxxxxx.xxx, Inc. (the "Plan"); and
WHEREAS, the Committee has been appointed pursuant to Section 10.1 of
the Plan; and
WHEREAS, pursuant to Section 5.3(a) of the Plan, the Committee may
accelerate the period during which an option vests; and
WHEREAS, the Committee and Employee now desire to amend the Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual benefits to the parties arising out of this Amendment, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Committee and
Employee agree that the Agreement shall be amended as follows:
1. As of the Effective Date, Section 3 of the Agreement shall be amended by
adding the following provision:
Notwithstanding the foregoing, in the event that Optionee resigns from
employment with the Company, all shares subject to this Option shall vest
immediately and such Option shall be fully exercisable.
2. As amended hereby, the Agreement is ratified and reaffirmed.
EXECUTED this 27 day of July, 2000.
SECRETARY FOR BOARD OF DIRECTORS MEETING
/s/ Xxxxxx Xxxxxxx
------------------
XXXXXX X. XXXX
/s/Xxxxxx Xxxx
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EXHIBIT D
AMENDMENT TO APRIL 28, 2000
XXXXXX.XXX, INC. RETENTION BONUS GRANT
FOR XXXXXX XXXX
THIS AMENDMENT ("Amendment") is entered into by and between Xxxxxx
Xxxx ("Employee") and the Compensation Committee (the "Committee"), effective as
of July 5, 2000, the date prior to the date Employee's employment with
xxxxxx.xxx, Inc. (the "Company") is terminated (the "Effective Date").
WHEREAS, Employee and the Company are parties to the Retention Bonus
Grant with a date of grant of April 28, 2000 (the "Agreement"); and
WHEREAS, the Company and Employee now desire to amend the vesting
schedule of the option subject to the Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual benefits to the parties arising out of this Amendment, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Company and
Employee agree that the Agreement shall be amended as follows:
1. As of the Effective Date, the Agreement shall be amended by adding the
following provision:
Notwithstanding anything to the contrary herein, in the event that Optionee
resigns from employment with the Company, all shares subject to this Option
shall vest immediately and such Option shall be fully exercisable.
2. As amended hereby, the Agreement is ratified and reaffirmed.
EXECUTED this 27 day of July, 2000.
SECRETARY FOR BOARD OF DIRECTORS MEETING
/s/ Xxxxxx Xxxxxxx
------------------
XXXXXX X. XXXX
/s/Xxxxxx Xxxx
--------------
EXHIBIT E
AMENDMENT TO JUNE 5, 2000
XXXXXX.XXX, INC. RETENTION BONUS GRANT
FOR XXXXXX XXXX
THIS AMENDMENT ("Amendment") is entered into by and between Xxxxxx
Xxxx ("Employee") and the Compensation Committee (the "Committee"), effective as
of July 5, 2000, the date prior to the date Employee's employment with
xxxxxx.xxx, Inc. (the "Company") is terminated (the "Effective Date").
WHEREAS, Employee and the Company are parties to the Retention Bonus
Grant with a date of grant of June 5, 2000 (the "Agreement"); and
WHEREAS, the Company and Employee now desire to amend the vesting
schedule of the option subject to the Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual benefits to the parties arising out of this Amendment, the receipt and
sufficiency of which are hereby acknowledged by the parties, the Company and
Employee agree that the Agreement shall be amended as follows:
1. As of the Effective Date, the Agreement shall be amended by adding the
following provision:
Notwithstanding anything to the contrary herein, in the event that Optionee
resigns from employment with the Company, all shares subject to this Option
shall vest immediately and such Option shall be fully exercisable.
2. As amended hereby, the Agreement is ratified and reaffirmed.
EXECUTED this 27 day of July, 2000.
SECRETARY FOR BOARD OF DIRECTORS MEETING
/s/ Xxxxxx Xxxxxxx
------------------
XXXXXX X. XXXX
/s/Xxxxxx Xxxx
--------------
EXHIBIT G
CONSULTING AGREEMENT
xxxxxx.xxx agrees to retain Xxxx, and Xxxx agrees to serve, as an
independent contractor-consultant in the capacity of Acting Chief Operating
Officer to assist xxxxxx.xxx in the transition to a new Chief Operating Officer
for a minimum period of 90 days following the Termination Effective Date (the
"Consulting Period"). Xxxx shall be compensated at the rate of $2,693 per week,
for forty hours per week, during the Consulting Period. However, Xxxx will not
be required to begin providing services under the Consulting Agreement until
July 10, 2000 and Xxxx will not be paid for the partial week between July 6,
2000 and July 10, 2000. Upon mutual written agreement, Xxxx'x service as an
independent-contractor consultant may continue beyond the Consulting Period
defined above.
Xxxx'x duties shall be to advise xxxxxx.xxx's President and Chief
Executive Officer and to carry out the instructions given and tasks delegated by
the President and Chief Executive Officer to him. Xxxx shall have no
independent authority to bind or act on behalf of the company. Xxxx understands
and agrees that he shall in no sense be considered an employee of xxxxxx.xxx or
any related entity while engaging in the activities provided for under this
Consulting Agreement. In keeping with this independent contractor status, Xxxx
is free to control his methods of work, provided that Xxxx continues to render
his best efforts for xxxxxx.xxx under this Agreement.
As a consequence of Xxxx'x independent contractor status, Xxxx is not,
under this Consulting Agreement, entitled to, or eligible to participate in, any
benefits, privileges, incentives or bonus programs given or extended by
xxxxxx.xxx to its employees. Among other things, Xxxx shall have no claim
against xxxxxx.xxx hereunder for vacation pay, sick leave, retirement benefits,
social security, unemployment insurance benefits, or employee benefits of any
kind.
During the term of this Consulting Agreement, Xxxx shall be bound by
his promises regarding nondisclosure and return of confidential information,
assignment of intellectual property, non-competition, and non-solicitation as
set forth in Article V of the Employment Agreement as if he were still an
employee of xxxxxx.xxx.
xxxxxx.xxx may terminate this Consulting Agreement at any time and for
any reason in its sole discretion; provided, however, that if it terminates the
Consulting Agreement within the Consulting Period, it will pay Xxxx $2,693 for
each full week remaining in the Consulting Period and payment for any partial
week shall be prorated. Upon at least two weeks' written notice, Xxxx may
terminate this Consulting Agreement effective at or after 60 days from the
Termination Effective Date and Xxxx will not be entitled to any payment for any
week or partial week remaining in the Consulting Period. xxxxxx.xxx's
termination of this Consulting Agreement for any reason at the end of or, in the
event Xxxx'x service extends beyond the Consulting Period, following the
Consulting Period shall not result in any further payment to Xxxx.
The Indemnification Agreement of February 24, 1999, by and between
xxxxxx.xxx and Xxxx shall continue in full force and effect during the term of
this Consulting Agreement for Xxxx'x actions within the scope of his authority
hereunder.
