Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of July 1, 2002 (the "Agreement")
by and between Medix Resources, Inc., a Colorado corporation with its principal
offices located at Suite 1830, 420 Lexington Avenue, New York, New York, ("the
Company") and Xxxx X. Xxxxxx (the "Executive").
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto, each intending to be legally bound hereby, agree as follows:
1. Employment. The Company agrees to continue to employ the Executive, and
the Executive agrees to serve the Company as its Executive Vice President and
Chief Financial Officer upon the terms and conditions set forth herein. The
Executive hereby represents and warrants that he has legal capacity to execute
and perform this Agreement, that it is a valid and binding Agreement enforceable
against him according to its terms, and that its execution and performance by
him do not violate the terms of any existing agreement or understanding to which
the Executive is a party.
2. Position and Responsibilities. During the Term, the Executive agrees to
serve as Executive Vice President and CFO, reporting to the President and CEO.
The Executive shall be responsible for financial executive leadership and
management and shall have full authority and responsibility with respect
thereto, including the matters set forth in the Job Description attached hereto
as Exhibit A, subject to the supervision, restrictions, limitations and
guidelines set forth by the President and CEO and the Board of Directors in
resolutions adopted in the minutes of the Board of Directors meetings, copies of
which shall be provided to the Executive.
3. Term of Employment. The term of the Executive's employment under this
Agreement shall commence on July 1, 2002 ("Effective Date") and, subject to
earlier termination provisions pursuant to Section 7, shall continue for one (1)
year from the Effective Date. This Agreement shall automatically renew for one
or more additional one (1) year periods unless the Company or the Executive
delivers to the other party, a written notice of intention not to renew in a
form and manner prescribed herein, at least ninety (90) days prior to the
expiration of this Agreement. It is acknowledged and agreed by the parties that
failure to renew the Executive's contract shall not be deemed to be "Termination
Without Cause" hereunder. The "Term" as used herein shall mean the term of this
Agreement and any renewal term thereof.
4. Duties. During the Term, except for illness, incapacity or reasonable
vacation periods of no more than 4 weeks in any calendar year (or such other
periods as shall be consistent with the Company's policies for other key
executives), the Executive shall devote his full attention, best efforts and all
of his business time and skill exclusively to the business and affairs of the
Company, and its affiliated Companies and shall perform and discharge well and
faithfully the duties which may be assigned to him from time to time, and which
are consistent with his position and status, as such business and affairs now
exist and as they may be hereinafter changed. With approval of the President and
CEO of the Company, however, the Executive may serve, on other boards of
directors of, or hold any other offices or positions in companies or
organizations which, in such Board's judgment, will not present any conflict of
interest with the Company or any of its subsidiaries or affiliates or divisions,
or materially affect the performance of Executive's duties pursuant to this
Agreement; and further provided that the outside business is not a "Business
Opportunity" of the Company, as defined herein. A Business Opportunity of the
Company shall be a product, service, investment, venture or other opportunity,
which is either:
(a) Directly related to or within the scope of the existing business of
the Company; or
(b) Within the logical scope of the business of the Company, as such scope
may be expanded or altered from time-to-time by the Board of
Directors.
The terms "affiliate" or "affiliated Company" as used herein mean any
company directly or indirectly controlling, controlled by or under common
control with the other company. A presumption of control shall exist for any
person owning or controlling 10% or more of the outstanding voting securities of
a company, and any officer, director or general partner of a company.
5. Compensation.
(a) Base Salary. The Company shall pay to the Executive as compensation for
his services, the base salary of $207,000 per annum ("Base Salary") as of the
Effective Date of the Agreement. The Base Salary may be increased, but not
decreased, from time-to-time by the Company. Base Salary shall be payable
bi-weekly in accordance with the Company's normal payroll procedures.
(b) Bonus Plan. In addition to the Base Salary, Executive may be eligible
to earn a performance-based bonus in a bonus plan set forth and attached hereto
as Exhibit B, the terms and provisions of which have been authorized by the
President and CEO and the Board of Directors. Executive shall not be entitled to
receive the Bonus for any calendar year if he resigns from the Company or is
terminated by the Company for cause at any time during such calendar year. The
Company will endeavor to pay all eligible bonus amounts after the fiscal year
close but before the end of calendar first quarter.
(c) Option Award. Upon the execution of this Agreement by the Company and
Executive, Executive will receive a grant of options to purchase up to 275,000
shares of the common stock of the Company under the Company's 1999 Stock Option
Plan, at an exercise price that is the closing price of the Company's stock on
the date of July 1, 2002 subject to the terms and conditions of the Stock Option
Plan. Such options are intended to be classified as incentive stock options for
tax purposes, and shall vest and expire and be subject to such other terms as
provided on Exhibit C attached hereto. The terms of the stock option grant are
set forth in a Stock Option Agreement in the form used pursuant to such Plan and
attached to this Agreement.
(d) Medical Coverage and Other Employee Benefits. Except as modified by
this Agreement, the Executive will be eligible to participate in such of the
Company's employee benefits programs as are generally available to senior
executives of the Company, now or hereafter established and maintained by the
Company, to the extent permissible under the general terms and provisions of
such plans or programs, and in accordance with the provisions thereof, including
health insurance with limited Company payments, long-term disability plans,
limited sick time accrual plans, 401(k) Plan participation when eligible, and
term life insurance at Executive's expense, on the same basis as other senior
executives of the Company. Where applicable, the Executive shall be designated
as a "key" employee.
(e) Vacation Time. The Executive shall be entitled to four (4) weeks paid
vacation per calendar year. Such vacation may not be taken in any greater than
two (2) consecutive week increments. Vacation not used by the Executive during
the calendar year shall be forfeited. Compensation for unused vacation time
shall be paid to the Executive on the Date of Termination, as defined herein.
6. Business Expense Reimbursement. The Company shall reimburse the
Executive for all reasonable and necessary expenses incurred by the Executive in
connection with the performance of his duties under this Agreement, including
entertainment, travel and lodging costs, subject to the Executive's presentation
of an appropriate itemized accounting of such expenses on a monthly basis, in
such form as is required by the Company's accounting policies.
7. Effect of Termination of Employment.
(a) Without Cause Termination by the Company. After the completion of the
initial year of employment hereunder, the Company may terminate the employment
of the Executive without cause upon sixty (60) days written notice. In the event
that the Executive's employment terminates due to a Without Cause Termination,
earned but unpaid Base Salary and Bonus as of the Date of Termination (as
defined in Section 15(b) the "Accrued Obligations" shall be payable in full.
Subject to: (1) the Executive's continuing compliance with his obligations under
the provisions of Section 9 below; and (2) the Executive's execution and
delivery to the Company of a Separation Agreement which shall include an
irrevocable general release of all claims, in a form acceptable to the Company,
the Company shall additionally:
(i) continue to pay the Executive's Base Salary, as in effect at the
Date of Termination, for a period of six (6) months following the
Date of Termination, and
(ii) pay to the Executive a pro-rata share of any eligible bonus
amounts in the event of a termination during the calendar year in
which the bonus is earned.
With respect to the payments provided for in this Section 7(a), the
Executive shall be entitled, to the extent permitted by law, as determined by
the Company in good faith, to participate in any compensation deferral plans or
arrangements then provided by the Company to senior executives.
(b) Disability. In the event of the Executive's Disability, the Company
may, by giving a Notice of Disability as provided in Section 15(b), remove the
Executive from active employment and in that event shall provide the Executive
for six (6) months with the same payments and benefits as those provided in
Section 7(a), except Base Salary payments shall be offset by any amounts
otherwise payable to the Executive under the Company's disability program
generally available to other employees.
(c) Death. In the event of the Executive's death during the Term of this
Agreement, this Agreement shall terminate immediately. Upon Executive's death,
the Company shall pay in a lump sum, within forty-five (45) days of the
Executive's death, to such person as the Executive shall have designated to the
Company as his beneficiary, or, if no such person is designated, to the
Executive's estate, an amount equal to the Accrued Obligations as of the date of
death, the value on the Company's books of any accrued but unused vacation time
and accrued and unused sick time, and all unpaid expense reimbursements at the
time of Executive's death. No other payments shall be made, or benefits
provided, by the Company to the Executive's beneficiary or the Executive's
estate.
(d) Termination by the Executive. The Executive, with or without cause, may
terminate this Agreement upon sixty, (60) days' written notice to the Company in
accordance with Section 15 herein. The Executive shall be required to render the
services required under this Agreement during such 60-day period, unless
otherwise directed by the President and CEO. In the event the Executive
terminates employment under this Section 7(c), Executive shall only be entitled
to Accrued Obligations as of the Termination Date, and the Company shall
thereupon have no further obligations to the Executive under this Agreement,
except as may be required by operation of law.
(e) Termination for Cause. At anytime during the Term of this Agreement,
the Executive may be terminated for cause, as defined herein. In such event, the
Company, without liability, may terminate the Executive's employment hereunder
for cause upon ten (10) days' advance written notice, including the reasons
therefore. If the Executive desires to contest the determination to terminate
his employment for cause, he may request, in writing and within five (5)
business days of the written notice to him of his termination, that a meeting of
the President and CEO and Chairman of the Board of Directors be called to hear
his views on the matter. Such meeting shall take place within thirty (30) days
of such written notice. During such period, unless otherwise agreed between the
parties, Executive shall be on paid leave. The named parties shall make their
decision at the meeting and if it is in the Executive's favor, he shall
immediately resume his duties. If it is not in his favor, his employment shall
immediately terminate and thereafter, the Company's obligation hereunder shall
cease and terminate. In the event the Executive's employment hereunder
terminates due to a Termination for Cause, the Company shall pay the Executive
his Accrued Obligations only through the Effective Date of Termination at the
rate in effect at the time the notice of termination is given, plus accrued but
unpaid vacation, and vested stock options may be exercised according to the
terms and limitations of the Plan. The Company thereupon shall have no further
obligations to the Executive, except as may be required by operation of law.
(f) Definitions. For purposes of this Agreement, the following terms have
the following meanings:
(i) "Termination for Cause" means, to the maximum extent permitted by
applicable law, a termination of the Executive's employment by the Company
because the Executive has (A) been convicted of, or has entered a plea of
nolo contendere with respect to a felony, or any misdemeanor evidencing
moral turpitude, deceit, dishonesty or fraud; (B) engaged in conduct which
constitutes a willful and continued failure to perform his duties hereunder
after notice to the Executive and reasonable opportunity to correct the
same; (C) willfully engaged in any misconduct which has the effect of being
injurious to the Company or any of its affiliates; or (D) materially fails
to perform or meet objective standards set by the Board of Directors and
agreed upon by the Executive in advance; or (E) violated the
representations made in Section 1 above, or any of the provisions of
Sections 9 or 10 below. Notwithstanding anything herein to the contrary,
the Company may without liability, terminate the Executive's employment
hereunder for cause upon ten (10) days written notice, and thereafter, the
Company's obligations hereunder shall cease and terminate.
(ii) "Without Cause Termination" means a termination of the
Executive's employment by the Company other than due to Disability or
expiration of the Term and other than a Termination for Cause.
(iii) "Disability" for purposes of this Agreement means the Executive
shall be disabled so as to be unable to perform for 90 consecutive working
days, or 120 working days in the aggregate in any 365-day period, with or
without reasonable accommodation, the essential functions of his then
existing position or positions under this Agreement, as determined by the
person or entity responsible for making determinations under the Company's
long-term disability plan or, if any such person or entity is not able for
any reason to make this determination, by another independent person or
entity experienced in this field selected by the Company and acceptable to
the Executive or his representative.
Nothing contained in this Section 7 shall be deemed to limit any other
right the Company may have to terminate the Executive's employment upon any
ground permitted by applicable law.
8. Triggering Event Lump Sum Compensation. In the event of the occurrence
of a "Triggering Event," which shall be defined to include (i) change in
ownership of 50% or more of the outstanding shares of the Company, or (ii) the
merger, consolidation, reorganization or liquidation of the Company that results
in a change in ownership of 50% or more of the direct or indirect ownership of
the Company before the merger, consolidation, reorganization or liquidation, the
Executive shall receive a lump sum compensation equal to his annual salary and
incentive or bonus payments, if any, as would have been paid to the Executive
during the Company's then-current fiscal year (as if the Executive had been
employed for the full fiscal year), within thirty (30) days of the Triggering
Event. All of Executive's granted but unvested options shall immediately vest
upon the occurrence of a Triggering Event, and all of the shares underlying all
the options held by him shall be registered on a Form S-8 (or any successor
form) in a timely manner (no more than 45 days after such Triggering Event), to
be sold to his by the Company or its successor as unrestricted and
freely-tradeable shares. If the Company has been acquired by another publicly
traded company, the Company shall cause the acquiring company to agree to
exchange its options to acquire such company's shares for the Company options,
and to cause such shares to be registered with the Securities and Exchange
Commission for sale in the public securities markets by the Executive.
Alternatively, if the Company has been acquired by a private company, the
Company shall cause such company to offer to purchase the Executive's options
upon the same terms as are offered to the Company's shareholders in connection
with such company's acquisition of control of the Company. If the total amount
of the change of control compensation were to exceed three times the Executive's
base salary (the average annual taxable compensation of the Executive for the
five years preceding the year in which the change of control occurs), the
Company and the Executive may agree to reduce the lump sum compensation to be
received by Executive in order to avoid the imposition of the golden parachute
tax provided for in the Tax Reform Act of 1984, as amended by the Tax Reform Act
of 1986.
9. Obligations of Executive During and After Employment.
(a) Confidential Information. Executive acknowledges that, by reason of his
duties, he will produce, be given, or may have access to, and become informed
of, confidential or proprietary information which the Company possesses or to
which the Company has rights, which relates to the Company, which is not
generally known to the public or in the trade, and which is a competitive asset
of the Company, or information which constitutes a "trade secret" of the
Company, ("Confidential Information"), including without limitation, (i) the
Company's planning data, marketing strategies, business plans, expansion plans,
products, business opportunity records, notebooks, data, formulas,
specifications, trade secrets, customer lists, account lists, know-how, research
and development programs, sales methods, inventions processes, and other
confidential technical or business information; (ii) non-public terms of any new
products and strategies of the Company; (iii) non-public information relating to
the Company's personnel matters; (iv) the Company's financial results and
information about their business condition; (v) non-public terms of any material
contract of the Company; (vi) the Company's proprietary software and related
documents; (vii) the Company's client and prospect lists and contact persons at
such clients and prospects; and (viii) non-public material information
concerning the Company's customers or their operations, condition (financial or
otherwise) or plans. "Confidential Information" shall not include any
information: (A) generally known to the public except as a result of disclosure
by Executive; (B) disclosed by the Company without an obligation of
confidentiality on the part of the recipient; or (C) required to be disclosed by
law, rule, regulation or order without an obligation of confidentiality on the
part of the recipient, provided that prior to making any disclosure
under this clause (C), Executive shall provide the Company with notice and the
opportunity to contest such disclosure.
Executive acknowledges that his employment creates a relationship of confidence
and trust between himself and the Company with respect to Confidential
Information, and that Confidential Information, whether compiled or created by
him or by the Company, is and shall remain the sole property of the Company.
Executive will faithfully keep Confidential Information in strict confidence and
shall not, either directly or indirectly, at any time, while an employee of the
Company or thereafter, make known, divulge, copy, reveal, furnish, make
available, or use (except for use in the regular course of his duties for the
Company) any Confidential Information without the written consent of the Board
of Directors of the Company. Executive further acknowledges that all records,
files, business plans, documents, equipment and the like, or copies thereof,
including copies on Company computers, relating to Company's business, or the
business of an affiliated Company, which Executive shall prepare, or use, or
come into contact with, shall remain the sole property of the Company, or of an
affiliated Company, and shall not be removed from the Company's or the
affiliated Company's premises without the written consent of the Board of
Directors, and shall be promptly returned to the Company upon termination of
employment with the Company and its affiliated Company. All equipment, software
and other materials provided to the Executive by the Company will remain the
property of the Company, and must be made available to the Company at all times
for servicing, security checks, or any other purpose and the Executive hereby
agrees to turn such items over to the Company immediately upon request.
Executive understands and acknowledges that his obligations under this Section 9
will survive termination of his employment, and will continue indefinitely
unless and until any such Confidential Information has become, in the Company's
reasonable judgment, stale, or, through no fault of Executive's, generally known
to the public or until the Executive is required by operation of law (after
providing the Company with notice and an opportunity to contest such
requirement) to make such disclosure.
The Executive's obligations under this Section 9 are in addition to, and not in
limitation or preemption of, all other obligations of confidentiality which the
Executive may have to the Company under general or specific legal or equitable
principles.
(b) Return Of All Property And Documents. Upon the termination of his
employment for any reason or no reason, the Executive immediately shall return
to the Company all of its property, including without limitation, all documents
(including copies) and information, however maintained (including computer
files, computers, equipment, tapes, and recordings), concerning the Company or
acquired by the Executive in the course and scope of his employment (excluding
only those documents relating solely to the Executive's own salary and
benefits).
(c) Non-Interference. Throughout the Term and continuing for the twelve
(12) month period immediately following the expiration of the Term, and
notwithstanding the Agreement's earlier termination except if such termination
is pursuant to Section 7(a), the Executive shall not: (i) hire or employ,
directly or indirectly, through any enterprise with which he is associated, any
employee of the Company; or (ii) recruit, solicit or induce (or in any way
assist another person or enterprise in recruiting, soliciting or inducing) any
such employee, or any consultant, vendor or supplier of the Company to terminate
or reduce such person's employment, consulting or other business relationship
with the Company.
(d) Non-Solicitation. Throughout the Term and continuing for the twelve
(12) month period immediately following the expiration of the Term, and
notwithstanding the Agreement's earlier termination except if such termination
is pursuant to Section 7(a), the Executive shall not, directly or indirectly, in
any capacity: (i) solicit the business or patronage of any Customer, as herein
defined, for any other person or entity, (ii) divert, entice, or otherwise take
away from the Company the business or patronage of any Customer, or attempt to
do so, or (iii) solicit or induce any Customer to terminate or reduce its
relationship with the Company.
(e) Non-Competition. The Executive acknowledges that, as of the execution
of this Agreement, (i) the Company is engaged in the business of healthcare
connectivity (the "Business"); (ii) the Company's Business is conducted
currently throughout the United States, and may be expanded to other locations;
(iii) his employment with the Company has given him access to trade secrets and
Confidential Information concerning the Company; and (iv) the agreements and
covenants contained in this Agreement are essential to protect the Business and
goodwill of the Company. Accordingly, the Executive covenants and agrees as
follows:
(i) Throughout the Term and continuing for a period of twelve (12)
months after termination of the Executive's employment, except if such
termination is pursuant to Section 7(a), the Executive shall not directly
or indirectly, render services to, act as an officer, director, partner,
consultant or employee of, or otherwise assist any Competitor. "Competitor"
as used herein means any person, firm or organization (or parent,
subsidiary or affiliate thereof) engaged in or about to become engaged in
research on, or the production and/or provision of any Relevant Services,
regarding which the Executive has obtained Confidential Information by
virtue of his employment with the Company or with respect to which the
Executive can exert a competitive influence by virtue of the special and
unique services he has provided the Company.
(ii) Throughout the Term and continuing for a period of twelve (12)
months after termination, except if such termination is pursuant to Section
7(a), the Executive shall not engage in any other business activities
directly or indirectly, which are or may be competitive with, or which
might place the Executive in a competing position to, that of the Company
or any affiliated Company;
(iii) Throughout the Term and continuing for a period of twelve (12)
months after termination, except if such termination is pursuant to Section
7(a), the Executive shall not, directly or indirectly, in any capacity: (A)
provide or assist with the provision of Relevant Services, except as an
employee of the Company; or (B) be employed by or affiliated or associated
in a business capacity with any person or entity in the business of
providing Relevant Services other than the Company;
(iv) If the Executive should be unable to obtain employment consistent
with his training and education solely because of the provisions of this
Section, such provisions shall be binding upon the Executive for only so
long as the Company shall make payments to the Executive equal to his
monthly Base Salary at termination (including payment of health insurance
premiums, if any, provided by the Company on behalf of the Executive as of
the date of Termination, but exclusive of any additional compensation and
all other employee benefits) for each month in which the Executive shall:
(i) be unable to obtain employment solely because of this Section; (ii)
provide the Company with a written affidavit declaring under oath that he
is not in any way assisting a Competitor and that he has conscientiously
sought employment, but has been unable to obtain employment because of this
Section and describing in detail his efforts to obtain employment; and
(iii) provide the Company with any further information requested by the
Company to clarify, substantiate, or expand upon the statements made in
such affidavit. The Company's obligation to make or continue monthly
payments hereunder shall terminate either by the Company's giving the
Executive a written release from his obligations under this Section or upon
the Executive's obtaining employment consistent with the provisions of this
Section, whichever occurs sooner. Executive shall promptly give written
notice of such employment to the Company within five (5) days of acceptance
of such employment. The Company's obligation to make the monthly payments
hereunder shall in no event continue more than six (6) months immediately
following termination of the Executive's employment with the Company, and
in no event shall the Company be liable under this Agreement for any action
relating thereto for any amount greater than the aggregate of such monthly
payments. Payments due hereunder, if any, shall be made in accordance with
the Company's regular procedures.
(v) Executive agrees that he will provide a copy of this Agreement to
any prospective employer with whom he is contemplating discussing or
interviewing for possible employment during the time period during which
this Section is effective.
(f) Certain Definitions. For purposes of this Agreement:
(i) "Relevant Services" shall mean (a) directly related to or within
the scope of the existing business of the Company [as an internet based,
healthcare software company] or (b) any other product or service within the
logical scope of the business of the Company as such scope may be expanded
or altered by the Board of Directors and (c) any other services or products
provided by the Company from time to time which, at any time during the
twelve (12) months preceding the termination of the Executive's employment.
(ii) "Customer" means any person or entity to the extent that such
person or entity (A) is receiving Relevant Services from the Company on the
date of termination of the Executive's employment with the Company, (B)
received such services for compensation at any time during the one-year
period immediately preceding the date of termination of the Executive's
employment with the Company or (C) at any time during the one-year period
immediately preceding the date of termination of the Executive's employment
with the Company was solicited by the Executive, directly or indirectly, in
whole or in part, on behalf of the Company to provide Relevant Services.
(g) Litigation and Regulatory Cooperation. During and after the Executive's
employment, notwithstanding the cause of termination, the Executive shall
cooperate fully with the Company in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future against or on
behalf of the Company which relate to events or occurrences that transpired
while the Executive was employed by the Company. The Executive's full
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery,
trial, arbitration, mediation, or other alternative dispute resolution, and to
act as a witness on behalf of the Company at mutually convenient times. During
and after the Executive's employment, the Executive shall also cooperate fully
with the Company in connection with any investigation or review of any federal,
state or local regulatory authority provided that such investigation or review
relates to events or occurrences which transpired while the Executive was
employed by the Company. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in connection with the Executive's
performance of obligations pursuant to this Section 9(g).
(h) Nondisparagement. During and after the Executive's employment,
notwithstanding the cause of termination, Executive agrees not to take any
action or make any statement, written or oral, to any current or former employee
of the Company or to any other person which disparages the Company, their
management, directors or shareholders, as applicable, or their practices or
which disrupts or impairs their normal operations, including actions or
statements (i) that would harm the reputation of the Company, as applicable,
with their clients, suppliers, employees or the public, or (ii) that would
interfere with existing or prospective contractual or employment relationships
with clients, suppliers or individuals.
(i) Remedies. The Company's obligation to make payments or provide any
benefits under this Agreement (except to the extent previously vested) shall
cease upon any violation of the provisions of this Section 9. In addition, in
the event of a violation by the Executive of the provisions of this Section 9,
the Company shall be entitled, if it shall so elect, to institute legal
proceedings to obtain damages for any such breach, or to enforce the specific
performance by the Executive of this Section 9 and to enjoin the Executive from
any further violation, and may exercise such remedies cumulatively or in
conjunction with such other remedies as may be available to the Company at law
or in equity. Executive agrees that irreparable harm should be if any provision
of this Section 9 is breached in any way. The Executive agrees that it would be
difficult to measure any damages to the Company which might result from any
breach by the Executive of the promises set forth in this Section 9, and that in
any event money damages would be an inadequate remedy for any such breach.
Executive agrees that faithful adherence to the terms of this Section is an
essential condition of employment with the Company. Accordingly, the Executive
agrees that if the Executive breaches any provision of this Agreement, the
Company shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach, without the requirement of posting any bond in connection with obtaining
temporary or injunctive relief, and without showing or proving any actual damage
to the Company. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedy available to the Company for such breach or
threatened breach, including but not limited to, the recovery of damages against
the Executive.
(j) Survival; Authorization to Modify Restrictions. The Executive
acknowledges and agrees that the covenants of the Executive and the restrictions
contained in this Section 9 are intended to protect the Company's interest in
its Confidential Information and its commercial relationships and goodwill with
its customers, prospective customers, vendors, suppliers, consultants and
employees. The Executive further acknowledges and agrees that the covenants of
the Executive, and the restrictions contained in this Section 9, shall survive
termination of this Agreement and any termination of the Executive's employment,
for the periods stated herein and shall continue in full force and effect
regardless of any change in the Executive's title, duties, responsibility,
compensation or benefits while he remains employed by the Company.
The Executive represents that he has read and understands the provisions of
this Agreement, including this Section 9 that he has had the opportunity to
consult with counsel concerning such provisions, and that he understands the
effect of such provisions on his ability to earn his livelihood upon any
termination of his employment with the Company. The Executive acknowledges that
it would cause the Company serious and irreparable injury and cost if Executive
were to use his ability and knowledge in competition with the Company or to
otherwise breach the obligations contained in this Section 9 and, in view of the
nature and level of his responsibilities and the level of his compensation,
agrees that the provisions of this Section 9 are reasonable. Accordingly, it is
the intention of the parties that the provisions of this Section 9 shall be
enforceable to the fullest extent permissible under applicable law, but that if
any portion or provision of this Agreement shall to any extent be declared
illegal or unenforceable by a court of competent jurisdiction, then (A) the
court may amend such portion or provision so as to comply with law in a manner
consistent with the intention of this Agreement, (B) the remainder of this
Agreement, or the application of such illegal or unenforceable portion or
provision in circumstances other than those as to which it is so declared
illegal or unenforceable, shall not be affected thereby and (C) each portion or
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
(k) Jurisdiction and Venue. The parties agree that any action by the
Company to enforce the covenants and restrictions contained in this Section 9 or
any action by either party to obtain a judgment on an arbitrator's award
referred to in Section 11 may be instituted and maintained in the state or
federal courts in New York, New York. Subject to the first sentence of Section
11 hereof, the parties hereby irrevocably submit to the jurisdiction of the
state and federal courts in New York, New York in any suit, action or proceeding
arising under, or relating to, this Agreement and hereby irrevocably waive any
objections to the venue of any of such courts in any such suit, action or
proceeding, including any claim that any other court constitutes a more
appropriate or convenient forum.
10. Proprietary Developments.
(a) The Executive acknowledges that he has been an employee and officer of
the Company and its predecessor during the development of the software and
Intellectual Property, as defined herein, currently owned by the Company, and
the Executive makes no claim to any right, title or interest (including patent
rights, copyrights, trade secret rights, trademark rights, sui generic database
rights, and all other intellectual property rights of any sort throughout the
world), made or conceived or reduced to practice, in whole or in part, by
Executive during such employment by the Company and its predecessors that relate
to such Intellectual Property. Any and all inventions (whether or not
patentable), products, discoveries, improvements, processes, methods, computer
software programs, models, techniques, formulae, trade secrets, service marks,
patent rights, copyrights, sui generis database rights, designs, designations,
know-how, ideas, trademarks and works of authorship (collectively, hereinafter
referred to as "Intellectual Property"), made, developed or created by the
Executive (alone or in conjunction with others, during regular hours of work or
otherwise) during the Executive's employment by the Company and its
predecessors, which may be directly or indirectly useful in, or relate to,
business conducted or to be conducted by the Company shall be the Company's
exclusive property and will be promptly disclosed by the Executive to the
Company. To the fullest extent permitted by law, such Intellectual Property
shall be deemed works made for hire.
(b) Executive hereby transfers and assigns to the Company or its designated
affiliate any right, title or interest which Executive may have or acquire in
any such Intellectual Property (including patent rights, copyrights, trade
secret rights, trademark rights, sui generis database rights, and all other
intellectual property rights of any sort throughout the world) relating to any
and all inventions (whether or not patentable), works of authorship,
designations, designs, know-how, ideas and information made or conceived or
reduced to practice, in whole or in part, by Executive, (i) during the Term that
relate to the subject matter of, or arise out of, his services to the Company,
(ii) are referred to in clause (a) above, or (iii) constitute any Proprietary
Information (as defined below) (collectively, "Inventions"). Executive will
promptly disclose and provide all Inventions to Company. Executive waives any
license or other special right which Executive may have or accrue therein.
Executive agrees to execute any documents and to take any actions that may be
required, as reasonably determined by the Company's counsel, to effect and
confirm such transfer, assignment and waiver. Executive shall further assist
Company, at its request and expense, to further evidence, record and perfect
such assignments and to perfect, obtain, maintain, enforce and defend any rights
assigned. Executive hereby irrevocably designates and appoints the Company as
its agent and attorney-in-fact to act for and in Executive's behalf to execute
and file any documents and to do all other lawfully permitted acts to further
the foregoing with the same legal force and effect as if executed by Consultant.
The Executive shall, upon the Company's request, execute any documents necessary
or advisable in the opinion of the Company's counsel to direct the issuance of
patents, trademarks or copyrights to the Company or its designated affiliate
with respect to such Intellectual Property as are to be the Company's exclusive
property under this Section 10 or to vest in the Company or such affiliate title
to such Intellectual Property, the expense of securing any patent, trademark or
copyright, however, to be borne by the Company or such affiliate. The Executive
will keep confidential and will hold for sole benefit of the Company any
Intellectual Property which is to be their exclusive property under this Section
10 for which no patent, trademark or copyright is issued.
(c) Executive agrees that all Inventions and all other business, customer,
marketing, technical and financial information (including, without limitation,
the identity of and information relating to the Company's customers or
employees) that Executive developed, learned or obtained for or about the
Company and its predecessors, or that Executive develops, learns or obtains
during the Term that relate to the Company or the business or that are received
by or for the Company in confidence, constitute "Proprietary Information,"
provided that Proprietary Information shall not include information in the
public domain through no fault of Executive. Executive will hold in confidence
and not disclose or, except in performing the services hereunder, use any
Proprietary Information. Upon termination of this Agreement, and as otherwise
requested by Company, Executive will promptly return to Company all items and
copies containing or embodying Proprietary Information, except that Executive
may keep personal copies of his compensation records and this Agreement.
(d) As additional protection for Proprietary Information, Executive agrees
that during the Term and for one year thereafter, Executive will not encourage
or solicit any employee or consultant of Company to leave Company for any
reason. As further protection, Executive will not engage in any activity that is
in any way competitive with the business of the Company, and Executive will not
assist any other person or organization in competing or in preparing to compete
with any business of Company.
(e) The Executive agrees that non-public terms of Intellectual Property
shall constitute Confidential Information within the meaning of Section 9.
(f) The foregoing provisions of this Section 10 shall be binding upon the
Executive's heirs and legal representatives. The agreements of the Executive in
this Section shall be enforceable by injunction and shall survive the
termination of this Agreement
11. Resolution of Disputes. Except as otherwise provided in Section 9, any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in New York, New York, by three
arbitrators in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrators' award in any court
having jurisdiction.
12. Full Settlement. The Company's obligation to make any payment provided
for in this Agreement and otherwise to perform its obligations hereunder shall
be in lieu of all other severance payments to the Executive under any other
severance plan, arrangement or agreement of the Company and its affiliates, and
in full settlement of any and all claims or rights of the Executive for
severance, separation and/or salary continuation payments resulting from the
termination of his employment.
13. Withholding Taxes. The Company shall withhold from any payments made
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
14. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation or
entity which assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
or entity, and this Agreement shall continue in full force and effect.
15. Notices.
(a) General. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given when delivered or 5 days after being deposited in the
United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
(i) To the Company: Xxxx X. Xxxxxxx, President & CEO
Medix Resources, Inc.
The Graybar Building, Suite 1830
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Copy to:
X. X. Xxxxxxx
P. A. Xxxxxxxxx
(ii) To the Executive: Xxxx X. Xxxxxx
00 Xxxxx Xxxx Xxxx
Xxxx Xxxxxxxx, Xxx Xxxx 106
or to such other address as the addressee party shall have previously
specified in writing to the other.
(b) Notice of Termination. Except in the case of death of the Executive,
any termination of the Executives employment hereunder prior to the expiration
of the Term pursuant to Section 7, whether by the Executive or the Company,
shall be effected only by a written notice given to the other party in
accordance with this Section 15("Notice of Termination"). Any Notice of
Termination shall (i) indicate the specific termination provision in Section 7
relied upon, (ii) in the case of a termination for Cause, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination and (iii) specify the effective date of such termination of
employment (the "Date of Termination"), which shall not be less 10 days nor more
than 90 days after such notice is given. The failure of the Executive or the
Company to set forth in any Notice of Termination any fact or circumstance which
contributes to a showing of Cause shall not waive any right of the Executive or
the Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
16. Indemnification. The Company shall indemnify and hold harmless
Executive to the full extent required by law. To the extent that any of the
Company's officers or directors are covered by or benefit from one or more,
Director and Officers' liability insurance policies, the Executive shall also be
covered by or benefit from such policy or policies.
17. No Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect; provided, however, that nothing in this Section 17 shall
preclude the assumption of such rights by executors, administrators, or other
legal representatives of the Executive or his estate or their assigning any
rights hereunder to the person or persons entitled thereto.
18. Binding Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the Executive and the Company and, as permitted by this
Agreement, their respective successors, assigns, heirs, beneficiaries and
representatives.
19. Counterparts; Headings; Interpretation. This Agreement may be executed
in counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument. The
underlined Section headings contained in this Agreement are for convenience of
reference only and shall not affect the interpretation or construction of any
provision hereof. This Agreement is the result of negotiation and compromise
between the parties hereto, each represented by counsel. The fact that either
party, in the course of negotiations, agreed to an addition, deletion or change
requested by the other party in the language of this Agreement shall not be
deemed an admission of fact by the party agreeing to such change.
20. Arbitration. Except as otherwise provided in Section 9, any
controversy, dispute or claim arising out of, or relating to this Agreement
and/or its interpretation shall be settled by binding arbitration in New York,
New York in accordance with the Rules of the American Arbitration Association
for employment disputes then in effect. The award rendered by the arbitrators
shall be final and judgment may be entered upon the award in any court having
jurisdiction. If any legal proceeding and/or arbitration is brought to enforce
or interpret the terms of this Agreement, each party shall bear its own
attorney's fees, costs, and necessary disbursements in such legal proceeding
and/or arbitration except as otherwise provided herein.
21. General Provisions.
(a) Non-Assignment. The Executive's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, nor shall
Executive's rights be subject to encumbrance or to the claims of the Company's
creditors. Nothing in this Agreement shall prevent the consolidation of the
Company, with or its merger into, any other corporation, or the sale by the
Company of all or substantially all of its property or assets. However, the
rights of the Executive hereunder shall be enforceable against any successor to
the Company, and the rights of the Company hereunder shall benefit any successor
to the Company.
(b) Entire Agreement; Amendments. This Agreement and the rights of
Executive with respect to the obligations and benefits of employment recited in
this Agreement, constitute the entire Agreement between the parties hereto in
respect of the employment of the Executive by the Company and supersede any and
all other agreements either oral or in writing between the parties hereto with
respect to the employment of the Executive. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless contained in a
writing executed by the party against whom such amendment or waiver is asserted,
and in the case of the Company, by its duly authorized officer.
(c) Divisible. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part there of are declared
invalid or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts there of and the
applicability there of shall not be affected thereby.
(d) Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed exclusively by the laws of the
State of New York, without regard to principles of conflicts of laws thereof.
(e) Construction. Throughout this Agreement, the singular shall include the
plural, and the plural shall include the singular, and the masculine and neuter
shall include the feminine, wherever the context so requires.
(f) Text to Control. The headings of paragraphs and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this Agreement exists, the text shall control.
(g) Authority. The officer executing this Agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
IN WITNESS WHEREOF, the Company and the Executive hereby voluntarily
execute this Agreement, as of the date first above written, after arms-length
negotiations, with the full intention to be mutually bound by the terms hereof.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By:
---------------
Xxxx X. Xxxxxxx
President & CEO
THE EXECUTIVE:
By:
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Exhibit A
JOB DESCRIPTION
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RESPONSIBILITIES
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(To be completed)
Exhibit B
2002 Bonus Plan
To be determined
The Company will endeavor to pay all eligible bonus amounts after the
fiscal year close but before the end of calendar first quarter.
Exhibit C
2002 Incentive Stock Options
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Incentive Stock Exercise Expiration Vesting Requirements
Options Price Date
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o 50,000 vest immediately
~275,000 $.38 5 Years
o The remaining 225,000 option
shares will vest in even
(Closing quarterly increments over the
Price on next eight (8) calendar
7/1/200)2 quarters (28, 125 per quarter)
assuming continued active
employment.
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