FIRST AMENDMENT TO CHANGE IN CONTROL EMPLOYMENT AGREEMENT
Exhibit 10.11
FIRST
AMENDMENT
TO
CHANGE IN CONTROL EMPLOYMENT AGREEMENT
This
First Amendment to Change in Control Employment Agreement (this “Amendment”)
is made and entered into by and between Healthaxis, Ltd., a Texas limited partnership (“Healthaxis”),
and Xxxxx X. Xxxxxx (the “Executive”), to be effective as of the 13th day of
May, 2005.
WHEREAS,
Healthaxis and Executive are parties to that certain Change in Control Employment
Agreement dated as of January 1, 2002 (the “Agreement”), which sets forth,
among other things, the terms and conditions pursuant to which Healthaxis or its
successor will continue to employ the Executive and/or the amount of certain payments
that would be made to the Executive upon certain events following a Change in Control;
WHEREAS,
the parties desire to amend the Agreement as provided herein; and
WHEREAS,
except as otherwise defined herein, all capitalized terms used in this Amendment shall
have the meaning specified in the Agreement.
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements contained
herein and in the Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, Healthaxis and Executive do
hereby agree as follows:
1.
Change in Control. The parties acknowledge and agree that a “Change in Control” has
occurred under the terms of the Agreement as a result of the consummation of the
transactions contemplated by that certain Stock and Warrant Purchase Agreement dated
February 23, 2005 by and between Healthaxis and Tak Investments, Inc. (the “Purchase
Agreement”). As a result, the “Effective Date” referenced in the
Agreement shall be the date of this Amendment and the “Employment Period” referenced
in the Agreement shall henceforth commence.
2.
New Travel Responsibilities. As a result of the consummation of the transactions
contemplated by the Purchase Agreement, Executive acknowledges that he may be
required to travel on Healthaxis business to India and the Virginia/Washington D.C.
area more than has been the case in the past, and Executive agrees that Healthaxis’ requirement
that the Executive engage in such travel shall not constitute grounds for Executive’s
termination of employment with “Good Reason” under Section 4(c)(iii) of the
Agreement. Notwithstanding the foregoing, the Executive shall continue to be based
at the Healthaxis office provided for in Section 3(a)(i)(B) of the Agreement.
3.
Elimination of Executive’s Unilateral Termination Period. The Agreement is
hereby amended by deleting the final sentence of Section 4(c) of the Agreement
entitling the Executive to terminate his employment with Healthaxis for any reason
during the 30-day period immediately following the first anniversary of the Effective
Date.
4.
Severance Payments. Section 5(a)(i)(B) of the Agreement is hereby amended to
provide that the Executive shall be entitled thereunder to a lump sum payment equal
to the sum of “(x) the Executive’s Annual Base Salary and (y) the Executive’s
Annual Bonus” (rather than the current language in the Agreement providing that
the Executive shall be entitled thereunder to a lump sum payment of one-half of the
Executive’s Annual Base Salary and one-half of the Executive’s Annual Bonus).
5.
Cash Payment;Vesting of Options; Additional Grant. In consideration of Executive’s
foregoing agreement to the amendments to the Agreement and the other covenants and
agreements contained herein, Healthaxis does hereby agree (a) to pay Executive a lump
sum payment of $10,000 in cash within five (5) business days of the closing of the
transactions contemplated by the Purchase Agreement (subject to applicable tax
withholding requirements), (b) that all outstanding stock options awarded by
Healthaxis or its affiliates to the Executive prior to the date of this Amendment
shall become 100% vested and the related stock options shall become fully
exercisable, and (c) simultaneously with the closing of the transactions
contemplated by the Purchase Agreement, the Executive shall be granted an additional
40,000 stock options under the Healthaxis Inc. 2000 Stock Option Plan, which additional
options shall have an exercise price equal to the market price of Healthaxis common
stock on the date of the grant. Of these stock options so granted, 25% shall vest on
the date of grant, and an additional 25% shall vest on each of the following three
anniversary dates of the date of grant; provided, that such options shall be subject
to the otherwise applicable accelerated vesting and extended exercise provisions of
Section 5(a)(ii) of the Agreement. Healthaxis and the Executive agree to take such
further actions as shall be necessary to document the foregoing agreement relating to
the vesting of stock options and additional option grant.
Except
as expressly amended as provided herein, the Agreement shall continue in full force and
effect in accordance with its terms.
EXECUTED
by the parties to be effective as of the date set forth hereinabove.
| HEALTHAXIS: | EXECUTIVE: | |
| Healthaxis, Ltd. | ||
| /s/ Xxxxx X. Xxxxxx | ||
| |
||
| By: | Healthaxis Managing
Partner, LLC, General Partner |
Xxxxx X. Xxxxxx |
| By: | /s/ Xxxxx. X. XxXxxx | |
| |
||
| Xxxxx X. XxXxxx | ||
| President | ||
