EMPLOYMENT AGREEMENT
Exhibit 10.11
This EMPLOYMENT AGREEMENT (the “Agreement”) is dated June 3, 2009, and is entered into
by and between EMDEON BUSINESS SERVICES LLC, a Delaware corporation (together with its subsidiaries
and Affiliates, as defined below, the “Company”), and Xxxxx Xxxx (“Executive”).
WHEREAS, Executive is currently serving as the Chairman of the Company, as an independent
consultant to, and member of the Board of Directors of, the Company;
WHEREAS, the Company desires to employ Executive as a full-time employee and Executive desires
to accept such employment with the Company on the terms set forth herein;
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein
(including, without limitation, the Company’s employment of Executive and the advantages and
benefits thereby inuring to Executive) and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby
agree as follows:
1. Employment of Executive. The Company hereby employs Executive as Executive
Chairman and Executive hereby accepts such employment with the Company effective as of May 26, 2009
(the “Employment Commencement Date”). Executive will report to the Board of Directors of
the Company (the “Company Board”) and perform such duties and services for the Company as
may be designated from time to time, which shall include coordinating with the Chief Executive
Officer of the Company (the “CEO”) with respect to expanding the Company’s business in the
following areas: (a) data and analytical products and services, (b) financial services and (c)
expansion of key payor and provider relationships. Executive shall use his best and most diligent
efforts to promote the interests of the Company and, except as may be approved in advance by the
Company Board, shall devote all of his business time and attention to his employment under this
Agreement; provided, however, that Executive shall be permitted to manage his personal,
financial and legal affairs, in each case, so long as such activities do not singularly or in the
aggregate require more than insubstantial portions of his working time or interfere or be
inconsistent with his duties and obligations under this Agreement. Executive acknowledges that the
Company’s principal offices are in Tennessee, and Executive agrees he will be required to travel to
Tennessee and elsewhere in connection with the performance of his duties hereunder. During the
Employment Period, Executive shall also serve as a member of the EBS Master Board (as defined
below) or the board of directors of any Affiliate of the Company for so long as he remains
appointed or elected thereto, without additional compensation therefor, except with respect to the
Class B Units described in Section 2.3 below.
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2. Compensation and Benefits.
2.1 Salary. Commencing on the Employment Commencement Date, Executive shall be paid
for his services during the Employment Period (as defined below) a base salary at the annual rate
of $500,000 (as may be increased by the Board of Directors of EBS Master LLC (the “EBS Master
Board”, which reference herein shall refer to any committee of the EBS Master Board as may be
designated by the EBS Master Board, or to whom the EBS Master Board has delegated its authority, to
act on behalf of the EBS Master Board), (the “Base Salary”). Such Base Salary shall be
payable in equal installments, no less frequently than bi-monthly, pursuant to the Company’s
customary payroll policies in force at the time of payment, less any required or authorized payroll
deductions.
2.2 Bonus. During the Employment Period, Executive shall be eligible to receive an
annual bonus, the target of which is 50% of Base Salary, and the amount of which (the
“Bonus”) shall be tied to achievement of specific metrics as agreed between Executive and
the EBS Master Board each year. Such Bonus, if any, shall be payable at such time as executive
officer bonuses are paid generally so long as Executive remains in the employ of the Company on the
payment date.
2.3 Profits Interest. In connection with his full-time employment with the Company
and pursuant to the Class B-2 Unit Award Agreement dated on or about the date hereof between
Executive and EBS Executive Incentive Plan LLC (the “Class B-2 Unit Award Agreement”),
Executive will be granted 850,000 Class B-2 Units of EBS Executive Incentive Plan LLC (“Plan
LLC”) under the Amended and Restated EBS Executive Equity Incentive Plan (as amended from time
to time, the “Plan”). As of the date hereof and pursuant to the Class B Unit Award
Agreement dated August 5, 2008 between Executive and Plan LLC (the “Class B Unit Award
Agreement” and, together with the Class B-2 Unit Award Agreement, the “Award
Agreements”), Executive holds 320,379.3 Class B Units of Plan LLC granted to Executive in
connection with his services as a director of EBS Master LLC.
2.4 Benefits. During the Employment Period, Executive shall be entitled to
participate, on the same basis and at the same level as other similarly situated senior executives
of the Company, in any group insurance, hospitalization, medical, health and accident, disability,
fringe benefit and tax-qualified retirement plans or programs of the Company now existing or
hereafter established to the extent that he is eligible under the general provisions thereof.
Executive shall be entitled to vacation time consistent with the Company’s policies. The date or
dates of such vacations shall be selected by Executive having reasonable regard to the business
needs of the Company.
2.4 Expenses. Pursuant to the Company’s customary policies in force at the time of
payment, Executive shall be promptly reimbursed, against presentation of vouchers or receipts, for
all authorized expenses properly and reasonably incurred by him on behalf of the Company in the
performance of his duties hereunder.
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3. Employment Period. Executive’s employment under this Agreement shall commence as
of the Employment Commencement Date, and shall terminate as set forth in Section 4 hereof (the
“Employment Period”). Executive acknowledges that his employment is for an unspecified
duration that constitutes at-will employment, and that either the Company or Executive can
terminate such employment at any time, for any reason, with or without notice, subject to the
consequences set forth herein.
4. Termination of Employment.
4.1 Termination by the Company for Cause.
(a) Executive’s employment with the Company may be terminated at any time by the Company for
Cause (as defined below). Upon such a termination, the Company shall have no obligation to
Executive other than the payment of Executive’s earned and unpaid compensation, vested and accrued
benefits under the Company’s ERISA-based plans and accrued but unreimbursed expenses (collectively,
the “Accrued Obligations”), to the effective date of such termination.
(b) For purposes of this Agreement, the term “Cause” shall mean any of the following:
(i) Executive’s (x) failure to devote substantially all his business time and attention to the
performance of his duties to the Company, (y) failure to comply with the employment policies of the
Company or any Affiliate or (z) material breach of this Agreement, in each case, which failure or
breach is not cured to the reasonable satisfaction of the EBS Master Board within thirty days of
written notice to Executive;
(ii) Executive’s commission of any act of dishonesty or breach of trust in connection with
performance of his employment-related duties to the Company, as determined by the EBS Master Board
in its sole discretion; and
(iii) Executive’s conviction of, or pleading guilty or nolo contendere to, any felony or to
any crime of moral turpitude.
4.2 Permanent Disability; Death. If during the Employment Period, (a) Executive shall
become ill, mentally or physically disabled, or otherwise incapacitated so as to be unable
regularly to perform the duties of his position for a period in excess of 90 consecutive days or
more than 180 days in any consecutive 12 month period, or (b) a qualified independent physician
determines that Executive is mentally or physically disabled so as to be unable to regularly
perform the duties of his position and such condition is expected to be of a permanent duration (a
“Permanent Disability”), then the Company shall have the right to terminate Executive’s
employment with the Company upon written notice to Executive. In the event the Company terminates
Executive’s employment as a result of his Permanent Disability or in the event Executive’s
employment is terminated due to his death at any time prior to the 2012 Measurement Date, as
defined in the Class B-2 Unit Award Agreement, Executive or Executive’s estate
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shall be entitled to the benefits that he would have been entitled to receive if Executive’s
employment had been terminated by the Company without Cause pursuant to Section 4.4 (subject to the
provisions and conditions set forth therein); provided, however, that the Company shall have no
other obligation to Executive or Executive’s estate pursuant to this Agreement in the event that
Executive’s employment with the Company is terminated pursuant to this Section 4.2.
4.3 Termination by the Executive. Executive may voluntarily resign from his
employment with the Company, provided that Executive shall provide the Company with thirty
(30) days advance written notice (which notice requirement may be waived, in whole or in part, by
the Company in its sole discretion) of his intent to resign. If Executive so terminates his
employment with the Company, other than in accordance with Section 4.5, the Company shall have no
obligation other than the payment of the Accrued Obligations to the effective date of such
termination.
4.4 Termination by the Company without Cause. Executive’s employment with the Company
may be terminated at any time by the Company without Cause. If the Company terminates Executive’s
employment without Cause at any time prior to the 2012 Measurement Date, the Company shall have the
following obligations to Executive (but excluding any other obligation to Executive pursuant to
this Agreement):
(a) payment of the Accrued Obligations;
(b) the continuation of his Base Salary (at the rate in effect on the date of termination), as
severance, for a period of (x) two years if the date of termination is prior to the 2011
Measurement Date and (y) 1 year if the date of termination is on or after the 2011 Measurement
Date, each payment being a separate payment due on the same fixed schedule that the Company follows
for its regular payroll, commencing on the 60th day following termination of employment provided
the Release Condition, if applicable, is satisfied, and subject to the provisions of Section 6.11;
and
(c) if Executive timely elects to continue his health insurance pursuant to COBRA, the Company
shall pay that portion of the premium that it pays for active employees with similar coverage for a
period of 18 months or, if earlier, until such time as Executive is eligible for comparable
coverage with a subsequent employer (and Executive shall promptly notify the Company if he becomes
eligible for comparable coverage); and
(d) Executive’s Class B-2 Units and Class B Units in Plan LLC shall be treated as set forth in
the Award Agreements and the Plan governing same;
provided, however, that the continuation of salary and benefits hereunder shall cease on the
occurrence of any circumstance or event that would constitute Cause under Section 4.1 of this
Agreement (including any breach of the restrictive covenants referenced and incorporated in Section
5 below or any similar restrictive covenants to which Executive is bound).
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4.5 Termination by Executive for Good Reason. Executive may resign his employment
with the Company for Good Reason. Executive must provide written notice to the Company (and EBS
Master LLC), which notice shall detail the specific basis for such termination, and the Company
shall be given the opportunity to cure the basis for such termination within the thirty (30) day
period following the date of such notice. For purposes of this Section 4.5, the term “Good
Reason” means either of the following:
(a) a reduction in Executive’s Base Salary or
(b) a material diminution in Executive’s duties and responsibilities;
provided that Executive’ termination will not be for Good Reason unless he provides notice
to the Company not later than 90 days following the occurrence (or later discovery by Executive) of
the event constituting Good Reason, and if not cured within the 30 day cure period, Executive must
terminate his employment within 60 days following the end of the cure period.
If Executive terminates his employment pursuant to this Section 4.5 prior to the 2012 Measurement
Date, Executive shall be entitled to receive the same benefits as if his employment had been
terminated by the Company without Cause under Section 4.4 (subject to the provisions and conditions
set forth herein).
4.6 Release. Executive acknowledges that the payments and benefits under this Section
4 resulting from a termination of Executive’s employment with the Company are in lieu of any and
all severance benefits to which Executive may otherwise be entitled under any severance plan or
policy of the Company upon his termination of employment. Executive acknowledges that, if
requested by the Company, he must execute and not revoke a release of claims in a form provided by
the Company within 60 days following Executive’s termination of employment (the “Release
Condition”).
4.7 Continued Service as a Director following Termination of Employment. Subject to
the provisions of Section 6.11, references herein to “employment” and “termination of employment”
shall refer to Executive’s services as an employee of the Company and “employment” shall not
include the period, if any, during which Executive serves as a non-employee director of the Company
(or of any Affiliate of the Company).
5. Restrictive Covenants.
5.1 Trade Secret and Proprietary Information Covenants. Executive acknowledges and
agrees that he has executed and is subject to and bound by the Trade Secret and Proprietary
Information Covenants Agreement (the “Restrictive Covenants Agreement”) attached hereto as
Exhibit A.
5.2 Extension of Restricted Period. The Restricted Period (as defined in the
Restrictive Covenants Agreement) shall be extended by the length of any period
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during which Executive is in breach of the terms of this Section 5 or the Restrictive
Covenants Agreement.
5.3 Nondisparagement. Executive agrees that at no time during his employment by the
Company or thereafter, shall he make, or cause or assist any other person to make, any statement or
other communication to any third party which impugns or attacks, or is otherwise critical of, the
reputation, business or character of the Company or any of its directors, officers or employees.
6. Miscellaneous.
6.1 Representations and Covenants. In order to induce the Company to enter into this
Agreement, Executive makes the following representations and covenants to the Company and
acknowledges that the Company is relying upon such representations and covenants:
(a) No agreements or obligations exist to which Executive is a party or otherwise bound, in
writing or otherwise, that in any way interfere with, impede or preclude him from fulfilling all of
the terms and conditions of this Agreement. Executive will abide by any agreements that protect
proprietary information or any other information of another company while Executive is performing
his duties hereunder and after his employment has terminated.
(b) Executive, during his employment, shall use his best efforts to disclose to the Board and
the Chief Executive Officer of the Company in writing or by other effective method any bona fide
information known by him and not known to the Board and/or the Chief Executive Officer of the
Company that he reasonably believes would have any material negative impact on the Company.
6.2 Entire Agreement. This Agreement (including the Restrictive Covenants Agreement
attached hereto as Exhibit A) contains the entire understanding of the parties in respect of its
subject matter and supersedes upon its effectiveness all other prior agreements and understandings
between the parties with respect to such subject matter, including, without limitation, the letter
agreement dated February 22, 2008 between Executive and General Atlantic.
6.3 Notices. Any notice necessary under this Agreement shall be addressed to the
General Counsel of the Company at its principal executive office and to the Executive at the
address appearing in the personnel records of Company for Executive or to either party at such
other address as either party hereto may hereafter designate in writing to the other. Any notice
shall be deemed effective upon receipt thereof by the addressee or two (2) days after such notice
has been mailed, return receipt requested, or sent by a nationally recognized overnight courier
service, whichever comes first.
6.4 Amendment; Waiver. This Agreement may not be amended, supplemented, canceled or
discharged, except by written instrument executed by the party
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against whom enforcement is sought. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof.
6.5 Binding Effect; Assignment. The rights and obligations of this Agreement shall
bind and inure to the benefit of any successor of the Company by reorganization, merger or
consolidation, or any assignee of all or substantially all of the Company’s business and
properties. The Company may assign its rights and obligations under this Agreement to any of its
subsidiaries or Affiliates (as such term is defined in the Fourth Amended and Restated Limited
Liability Company Agreement of EBS Master LLC, dated as of May 21, 2008, as amended from time to
time) without the consent of Executive. The Company will require any such purchaser, successor or
assignee to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such purchase, succession or
assignment had taken place. Executive’s rights or obligations under this Agreement may not be
assigned by Executive, except that the rights specified in Section 4.2 shall pass upon Executive’s
death to Executive’s executor or administrator.
6.6 Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
6.7 Governing Law; Forum. This Agreement shall be construed in accordance with and
governed for all purposes by the laws and public policy (other than conflict of laws principles) of
the State of Tennessee applicable to contracts executed and to be wholly performed within such
State. Any proceeding arising out of or relating to this Agreement shall be brought in the state
courts or federal courts in the state of Tennessee and the parties each hereby expressly submit to
the personal jurisdiction and venue of such courts.
6.8 Further Assurances. Each of the parties agrees to execute, acknowledge, deliver
and perform, and cause to be executed, acknowledged, delivered and performed, at any time and from
time to time, as the case may be, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably necessary to carry out the
provisions or intent of this Agreement.
6.9 Severability. The parties have carefully reviewed the provisions of this
Agreement and agree that they are fair and equitable. However, in light of the possibility of
differing interpretations of law and changes in circumstances, the parties agree that if any one or
more of the provisions of this Agreement shall be determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remainder of the provisions of this Agreement shall, to
the extent permitted by law, remain in full force and effect and shall in no way be affected,
impaired or invalidated.
6.10 Withholding Taxes. All payments hereunder shall be subject to any and all
applicable federal, state, local and foreign withholding taxes.
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6.11 Section 409A. It is intended that (1) each installment of the payments provided
under this Agreement is a separate “payment” for purposes of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and (2) that the payments satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A of the Code provided under
Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding
anything to the contrary in this Agreement, if the Company determines (i) that on the date the
Executive’s employment with the Company terminates or at such other times that the Company
determines to be relevant, the Executive is a “specified employee” (as such term is defined under
Treasury Regulation 1.409A-1(i)) of the Company and (ii) that any payments to be provided to the
Executive pursuant to this Agreement are or may become subject to the additional tax under Section
409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code if
provided at the time otherwise required under this Agreement, then such payments shall be delayed
until the date that is six months after the date of the Executive’s “separation from service” (as
such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the
date of the Executive’s death. Any payments delayed pursuant to this Section 6.11 shall be made in
lump sum on the first day of the seventh month following the Executive’s “separation from service”
(as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of the
Executive’s death. In addition, to the extent that any reimbursement, fringe benefit or other,
similar plan or arrangement in which the Executive participates during the term of Executive’s
employment under this Agreement or thereafter provides for a “deferral of compensation” within the
meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under
such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement
or payment in any other calendar year (except that a plan providing medical or health benefits may
impose a generally applicable limit on the amount that may be reimbursed or paid), and (ii) subject
to any shorter time periods provided herein or the applicable plans or arrangements, any
reimbursement or payment of an expense under such plan or arrangement must be made on or before the
last day of the calendar year following the calendar year in which the expense was incurred.
6.12 Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| EMDEON BUSINESS SERVICES LLC | ||||||
| By: | /s/ Xxxx X. Xxxxxxx | |||||
| Name: | ||||||
| Title: | ||||||
| EXECUTIVE: | ||||||
| /s/ Xxxxx Xxxx | ||||||
| Xxxxx Xxxx | ||||||
EXHIBIT A
TRADE SECRET AND PROPRIETARY INFORMATION COVENANTS
AGREEMENT
AGREEMENT
This Agreement (this “Agreement”), dated ___, 2009 is executed by and between
EMDEON BUSINESS SERVICES LLC, a Delaware corporation (together with EBS Executive Incentive Plan
LLC and of their respective subsidiaries and Affiliates, the “Company”), and XXXXX XXXX
(“Executive” or “I” or “me”). This Agreement forms a part of the
Employment Agreement to which it is attached. References in this Agreement to “employment” and
“termination of employment” shall refer to the period of Executive’s services to Emdeon and its
Affiliates and termination thereof, which shall include the period, if any, during which the
Participant serves as non-employee director, independent contractor or consultant of Emdeon (or any
of its Affiliates). Capitalized terms used and not defined herein shall have the meanings given to
them in the Employment Agreement.
1. Confidentiality.
(a) Trade Secret and Proprietary Information. I understand and acknowledge that,
during the course of my employment with the Company, I will be granted access to valuable
information relating to the Company’s business that provides the Company with a competitive
advantage (or that could be used to the Company’s disadvantage by a Competitive Business (as
defined herein), which is not generally known by, nor easily learned or determined by, persons
outside the Company (collectively “Trade Secret and Proprietary Information”). The term
Trade Secret and Proprietary Information shall include, but shall not be limited to: (a)
specifications, manuals, software in various stages of development; (b) customer and prospect
lists, and details of agreements and communications with customers and prospects; (c) sales plans
and projections, product pricing information, acquisition, expansion, marketing, financial and
other business information and existing and future products and business plans of the Company; (d)
sales proposals, demonstrations systems, sales material; (e) research and development; (f) computer
programs; (g) sources of supply; (h) identity of specialized consultants and contractors and Trade
Secret and Proprietary Information developed by them for the Company; (i) purchasing, operating and
other cost data; (j) special customer needs, cost and pricing data; and (k) employee information
(including, but not limited to, personnel, payroll, compensation and benefit data and plans),
including all such information recorded in manuals, memoranda, projections, reports, minutes,
plans, drawings, sketches, designs, formula books, data, specifications, software programs and
records, whether or not legended or otherwise identified by the Company as Trade Secret and
Proprietary Information, as well as such information that is the subject of meetings and
discussions and not recorded. Trade Secret and Proprietary Information shall not include such
information that I can demonstrate (i) is generally available to the public (other than as a result
of a disclosure by me), (ii) was disclosed to me by a third party under no obligation to keep such
information confidential or (iii) was known by me prior to, and
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not as a result of, my employment or anticipated employment with the Company or its
subsidiaries.
(b) Duty of Confidentiality. I agree at all times, both during and after my
employment with the Company, to hold all of the Company’s Trade Secret and Proprietary Information
in a fiduciary capacity for the benefit of the Company and to safeguard all such Trade Secret and
Proprietary Information. I also agree that I will not directly or indirectly disclose or use any
such Trade Secret and Proprietary Information to any third person or entity outside the Company,
except as may be necessary in the good faith performance of my duties for the Company. I further
agree that, in addition to enforcing this restriction, the Company may have other rights and
remedies under the common law or applicable statutory laws relating to the protection of trade
secrets. Notwithstanding anything in this Agreement to the contrary, I understand that I may
disclose the Company’s Trade Secret and Proprietary Information to the extent required by
applicable laws or governmental regulations or judicial or regulatory process, provided that I give
the Company prompt notice of any and all such requests for disclosure so that it has ample
opportunity to take all necessary or desired action, to avoid disclosure.
(c) Company Property. I acknowledge that: (i) all Trade Secret and Proprietary
Information of the Company, (ii) computers, and computer-related hardware and software, cell
phones, beepers and any other equipment provided to me by the Company, and (iii) all documents I
create or receive in connection with my employment with the Company, belong to the Company, and not
to me personally (collectively, “Company Property”). Such documents include, without
limitation and by way of non-exhaustive example only: papers, files, memoranda, notes,
correspondence, lists, e-mails, reports, records, data, research, proposals, specifications,
models, flow charts, schematics, tapes, printouts, designs, graphics, drawings, photographs,
abstracts, summaries, charts, graphs, notebooks, investor lists, customer/client lists, and all
other compilations of information, regardless of how such information may be recorded and whether
in printed form or on a computer or magnetic disk or in any other medium. I agree to return all
Company Property (including all copies) to the Company immediately upon any termination of my
employment, and further agree that, during and after my employment with the Company, I will not,
under any circumstances, without the Company’s specific written authorization in each instance,
directly or indirectly disclose Company Property or any information contained in Company Property
to anyone outside the Company, or otherwise use Company Property for any purpose other than the
advancement of the Company’s interests.
(d) Unfair Competition. I acknowledge that the Company has a compelling business
interest in preventing unfair competition stemming from the intentional or inadvertent use or
disclosure of the Company’s Trade Secret and Proprietary Information and Company Property.
(e) Investors, Other Third-Parties, and Goodwill. I acknowledge that all
Third-Parties I service or propose to service while employed by the Company are doing business with
the Company and not me personally, and that, in the course of dealing with
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such Third-Parties, the Company establishes goodwill with respect to each such Third-Party
that is created and maintained at the Company’s expense (“Third-Party Goodwill”). I also
acknowledge that, by virtue of my employment with the Company, I have gained or will gain knowledge
of the business needs of, and other information concerning, Third-Parties, and that I would
inevitably have to draw on such information were I to solicit or service any of the Third-Parties
on my own behalf or on behalf of a Competitive Business (as defined herein).
(f) Intellectual Property and Inventions. I acknowledge that all developments,
including, without limitation, the creation of new products, conferences, training/seminars,
publications, programs, methods of organizing information, inventions, discoveries, concepts,
ideas, improvements, patents, trademarks, trade names, copyrights, trade secrets, designs, works,
reports, computer software, flow charts, diagrams, procedures, data, documentation, and writings
and applications thereof relating to the past, present, or future business of the Company that I,
alone or jointly with others, may have discovered, conceived, created, made, developed, reduced to
practice, or acquired during my employment with the Company (collectively, “Developments”)
are works made for hire and shall remain the sole and exclusive property of the Company, and I
hereby assign to the Company all of my rights, titles, and interest in and to all such
Developments, if any. I agree to disclose to the Company promptly and fully all future
Developments and, at any time upon request and at the expense of the Company, to execute,
acknowledge, and deliver to the Company all instruments that the Company shall prepare, to give
evidence, and to take any and all other actions that are necessary or desirable in the reasonable
opinion of the Company to enable the Company to file and prosecute applications for, and to
acquire, maintain, and enforce, all letters patent, trademark registrations, or copyrights covering
the Developments in all countries in which the same are deemed necessary by the Company. All data,
memoranda, notes, lists, drawings, records, files, investor and client/customer lists, supplier
lists, and other documentation (and all copies thereof) made or compiled by me or made available to
me concerning the Developments or otherwise concerning the past, present, or planned business of
the Company are the property of the Company, and will be delivered to the Company immediately upon
the termination of my employment with the Company.
2. Covenant Not to Compete with the Company.
(a) I acknowledge that the business of the Company is national in scope, that its products and
services are marketed throughout the entire United States, that the Company competes in nearly all
of its business activities with other individuals or entities that are, or could be, located in
nearly any part of the United States and that the nature of my services, position, and expertise
are such that I am capable of competing with the Company from nearly any location in the United
States.
(b) Accordingly, in order to protect the Company’s Trade Secret and Proprietary Information
and Third-Party Goodwill, I acknowledge and agree that during the term of my employment with the
Company and for a period of eighteen (18) months after the date my employment with the
Company is terminated for any reason (the “Restricted Period”), I will not, without the
Company’s express written permission,
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directly or indirectly (including through the Internet), own, control, manage, operate,
participate in, be employed by, or act for or on behalf of, any “Competitive Business” (as defined
herein) located anywhere within the geographic boundaries of the United States (or outside of the
United States to the extent that such Competitive Business services persons located within the
United States).
For purposes of this Agreement “Competitive Business” shall mean: (i) any enterprise,
including any payer (including, without limitation, insurance companies, HMO’s, pharmacy benefits
management companies, and/or self-insured employer groups) engaged in establishing electronic
linkages between individual healthcare providers, patients, and/or payers for the purpose of
facilitating or conducting financial, administrative and clinical communication and/or
transactions; (ii) any enterprise engaged in the printing or electronic communication of patient
statements or other invoices for services rendered; and (iii) any enterprise engaged in any other
type of business in which the Company is also engaged, or plans to be engaged, so long as I am
directly involved in such business or planned business on behalf of the Company.
3. Non-Solicitation of Employees, Customers. In order to protect the Company’s Trade
Secret and Proprietary Information and Third-Party Goodwill, during the Restricted Period, I will
not, without the Company’s express written permission, directly or indirectly:
(a) solicit, induce, hire, engage, or attempt to hire or engage any employee or independent
contractor of the Company, or in any other way interfere with the Company’s employment or
contractual relations with any of its employees or independent contractors, nor will I solicit,
induce, hire, engage or attempt to hire or engage any individual who was an employee of the Company
at any time during the one (1) year period immediately prior to the termination of my employment
with the Company;
(b) contact, call upon or solicit, on behalf of a Competitive Business, any existing or
prospective client, or customer of the Company who I serviced, or otherwise developed a
relationship with, as a result of my employment with the Company, nor will I attempt to divert or
take away from the Company the business of any such client or customer;
4. Injunctive Remedies. I acknowledge and agree that the restrictions contained in this
Agreement are reasonably necessary to protect the legitimate business interests of the Company, and
that any violation of any of the restrictions will result in immediate and irreparable injury to
the Company for which monetary damages will not be an adequate remedy. I further acknowledge and
agree that if any such restriction is violated, the Company will be entitled to immediate relief
enjoining such violation (including, without limitation, temporary and permanent injunctions, a
decree for specific performance, and an equitable accounting of earnings, profits, and other
benefits arising from such violation) in any court having jurisdiction over such claim, without the
necessity of showing any actual damage or posting any bond or furnishing any other security, and
that the specific enforcement of the provisions of this Agreement will not diminish my ability to
earn a livelihood or create or impose upon me any undue hardship. I also agree that
A-5
any request for such relief by the Company shall be in addition to, and without prejudice to, any
claim for monetary damages that the Company may elect to assert.
5. Severability Provision. I acknowledge and agree that the restrictions imposed upon me
by the terms, conditions, and provisions of this Agreement are fair, reasonable, and reasonably
required for the protection of the Company. In the event that any part of this Agreement is deemed
invalid, illegal, or unenforceable, all other terms, conditions, and provisions of this Agreement
shall nevertheless remain in full force and effect. In the event that the provisions of any of
Sections 1, 2, or 3 of this Agreement relating to the geographic area of restriction, the length of
restriction or the scope of restriction shall be deemed to exceed the maximum area, length or scope
that a court of competent jurisdiction would deem enforceable, said area, length or scope shall,
for purposes of this Agreement, be deemed to be the maximum area, length of time or scope that such
court would deem valid and enforceable, and that such court has the authority under this Agreement
to rewrite (or “blue-pencil”) the restriction(s) at-issue to achieve this intent.
6. Non-Waiver. Any waiver by the Company of my breach of any term, condition, or provision
of this Agreement shall not operate or be construed as a waiver of the Company’s rights upon any
subsequent breach.
7. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, I HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION
ARISING OUT OF, UNDER, IN CONNECTION WITH, OR IN ANY WAY RELATED TO THIS AGREEMENT. THIS INCLUDES,
WITHOUT LIMITATION, ANY LITIGATION CONCERNING ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT
(WHETHER VERBAL OR WRITTEN), OR ACTION OF THE COMPANY OR ME, OR ANY EXERCISE BY THE COMPANY OR ME
OF OUR RESPECTIVE RIGHTS UNDER THIS AGREEMENT OR IN ANY WAY RELATING TO THIS AGREEMENT. I FURTHER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE COMPANY TO ISSUE AND ACCEPT THIS
AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| EMDEON BUSINESS SERVICES LLC | ||||||||
| By: | /s/ Xxxx Xxxxxxx | |||||||
| Name: | ||||||||
| Title: | ||||||||
| XXXXX XXXX | ||||||||
| /s/ Xxxxx Xxxx | ||||||||
