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SEVERANCE AGREEMENT FOR XXXXXXX X. XXXXXXXXX
This Xxxxxxxxx Agreement entered into this 22nd day of May, 2001, by and between
Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), a Pennsylvania resident and Healthaxis Inc.
and Xxxxxxxxxx.xxx, Inc. (hereinafter collectively referred to as "Company"),
both Pennsylvania corporations.
I. STATUS. Effective July 31, 2001 (the "Separation Date"), Xxxxxxxxx shall
resign as a full-time executive officer of Company. Between the date of
this Agreement and the Separation Date, Xxxxxxxxx shall continue to
perform all current duties as Sr. Vice President, Secretary & General
Counsel.
II. SEPARATION COMPENSATION. Effective on the Separation Date, Xxxxxxxxx shall
receive a severance compensation payment of six (6) months pay ($80,000),
subject to federal, state and local taxes as applicable.
III. MEDICAL EXPENSES. Xxxxxxxxx shall receive continuation of medical and
dental insurance benefits at the current contribution rate, as applicable,
for six (6) months following the Separation Date, or until Xxxxxxxxx
receives comparable employer sponsored insurance benefits, whichever is
earlier.
IV. BUSINESS RELATED EXPENSES. Subject to the approval of Company, Xxxxxxxxx
shall be reimbursed for all reasonable and necessary Company
business-related expenses incurred by Xxxxxxxxx up to the Separation Date.
V. OPTIONS. All unvested stock options as of the Separation Date (37,571)
previously granted to Xxxxxxxxx shall be fully vested and the
post-termination exercise period for all of Xxxxxxxxx'x vested stock
options shall be amended in each option to allow for a one-year post
termination exercise period (effective from the Separation Date).
VI. SALE OF BUILDING. Company agrees to pay Xxxxxxxxx an incentive bonus
according to the schedule below for the sale of the building and closure
of the operations at 0000 XxXxxx Xxxx, Xxxx Xxxxxxxx, XX. Such activities
include but are not limited to, the sale of inventory and equipment, the
termination of service contracts, the legal documentation and transfer of
title to the building, and the possible dislocation/relocation of
personnel and company functions as determined by the Company. Company
agrees to act in good faith to authorize and facilitate the
recommendations made by Xxxxxxxxx regarding winding down and closure
activities in order to achieve the timelines outlined below.
Net Receipts from
Closure Date Sale of the Building Bonus
------------- -------------------- -----
by 09/30/01 $4.25 mm $150,000 (cash in hand)
by 09/30/01 $4.00 mm $125,000
by 10/31/01 $4.00 mm $100,000
by 09/30/01 $3.75 mm $ 75,000
by 11/30/01 $3.75 mm $ 50,000
by 11/30/01 $3.50 mm $ 25,000
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VII. Retained Employment. Effective July 1, 2001, Xxxxxxxxx shall be retained
on a part-time basis as an "at-will" Secretary & General Counsel of the
Corporation. The terms of this employment are as follows:
A. Duties and Responsibilities: Advise the public Corporation on legal and
regulatory matters. Perform the responsibilities of Secretary of the
Corporation.
B. Authority. Xxxxxxxxx shall have the authority of the Secretary and
General Counsel of the Company to execute and negotiate documents
consistent with past practices. He shall have the authority to direct
the activities of outside counsel to the extent necessary to properly
advise and represent the Company regarding SEC and other related
matters.
C. Retention Fees: Company shall pay Xxxxxxxxx at the rate of $5,000 per
month for the performance of his duties herein. Payments shall be
payable in monthly installments, subject to federal, state and local
taxes. Services can be terminated by either party with 30-days written
notice. Xxxxxxxxx shall not be eligible for, and waives employment
benefits, except as otherwise provided for in this Agreement, during
the course of his part-time "at-will" employment.
D. Liability Coverage: Company shall provide D&O liability coverage on
behalf of Xxxxxxxxx, and shall indemnify and hold harmless Xxxxxxxxx
from and against any and all liability consistent with the By-Laws of
the Corporation and the Business Corporation Law.
E. Business Related Expenses. Subject to the approval of Company,
Xxxxxxxxx shall be reimbursed for all reasonable and necessary Company
business-related expenses incurred by Xxxxxxxxx in the conduct of his
"at-will" employment as Secretary & General Counsel.
VIII. MUTUAL RELEASE OF LIABILITY. Effective as of the Separation Date,
Xxxxxxxxx and Company agree to and shall execute the attached Mutual
Release of Liability releasing one another from any and all past and
present liabilities (except enforcement of Xxxxxxxxx'x rights under this
Severance Agreement and Xxxxxxxxx'x stock option agreements) arising in
connection with Xxxxxxxxx'x employment at Company prior to the Separation
Date. Neither Xxxxxxxxx nor Company intend this Release to affect
liabilities which may arise during the course of Xxxxxxxxx'x part-time
employment effective July 1, 2001 for events on or subsequent to that
date.
IX. ENTIRE AGREEMENT. The terms contained herein and on the attached Mutual
Release of Liability represent the full and final terms of separation
between Xxxxxxxxx and Company and supersede any and all other agreements,
except agreements or amendments to previously granted stock options to
Xxxxxxxxx as regards the employment of Xxxxxxxxx.
X. ARBITRATION. The parties herein agree to settle any unresolved disputes
arising from either the Severance Agreement or the Mutual Release of
Liability through binding arbitration under the rules of the American
Arbitration Association at a location to be determined by Company.
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XI. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to the principles of conflicts of law thereof.
Accepted, Agreed to and Effective this 22nd day of May, 2001.
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XXXXXXX X. XXXXXXXXX
XX. VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
XXXXXXXXXX.XXX, INC.
HEALTHAXIS INC.
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XXXXX X. XXXXXX
PRESIDENT & CEO
XXXXXXXXXX.XXX, INC.
HEALTHAXIS INC.
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