WebMD, LLC 111 Eighth Avenue New York, NY 10011 212-624-3700 As of December 10, 2008 Wayne Gattinella c/o WebMD Health Corp. 111 Eighth Avenue New York, NY 10011-5201 Dear Wayne:
Exhibit 10.53
WebMD, LLC
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
000-000-0000
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
000-000-0000
As of December 10, 2008
Dear Xxxxx:
The purpose of this letter is to (i) amend the letter agreement between you and WebMD, LLC, a
subsidiary of WebMD Health Corp. (previously known as WebMD, Inc., the “Company”) dated as of April
28, 2005 (the “Letter Agreement”; terms defined herein without definition have the meanings
specified in the Letter Agreement) in a manner intended to bring the Letter Agreement into
compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and the final
regulations issued thereunder, (ii) amend the bonus provision to provide for discretionary bonuses
consistent with past practice and (iii) describe the grant of nonqualified options and restricted
stock made to you on December 10, 2008. Accordingly, your execution of this letter amendment
indicates your agreement to the amendment of the Letter Agreement as set forth below:
| 1. | Section 2(b) is amended in its entirety to read as follows: |
“You shall have the opportunity to earn an annual bonus of up to 100% of your
Base Salary, the actual amount of which to be determined by the Compensation
Committee of the Board of Directors of WebMD Health Corp. (“WHC”) in its sole and
absolute discretion. Subject to Section 6(a) below, payment of the bonus (if any)
will be made at such time as the Company generally pays bonuses to its senior
executives, so long as you are employed on such date.”
| 2. | Section 6 is amended in its entirety to read as follows: |
“6. Termination of Employment. (a) In the event of the termination of
your employment by the Company without Cause or by you for Good Reason (as such
terms are defined on Annex A attached hereto) prior to April 30, 2009, subject to
Section 6(b) below and your continued compliance with the Trade Secret & Proprietary
Information Agreement, you will be entitled: (i) to continue to receive, as
severance, the Base Salary in effect at the time of such termination
for a period of one year (the “Severance Period”), payable as set forth in Section
6(c) below, (ii) if such termination occurs after the end of a calendar year
but before the payment of a bonus for such prior year, you shall be entitled to the
bonus otherwise payable to you for such year, even if you are not employed on the
bonus payment date and such bonus will be paid at the time that bonuses are paid to
other executive officers of the Company, but in no event later than December 31 of
the year in which your employment terminates and (iii) if you timely elect to
continue your health coverage through COBRA, the Company shall pay the COBRA premium
for the same type of coverage through the Severance Period or, if earlier, until you
are eligible for comparable coverage with a subsequent employer. In addition, in
the event of the termination of your employment by the Company without Cause or by
you for Good Reason prior to the fourth anniversary of the Grant Date of the New
Stock Option, 25% of the New Stock Option shall continue to vest and remain
outstanding as if you remained in the employ of the Company through the vesting date
following the date of termination, subject to your execution of the release
described below in Section 6(b) and your continued compliance with the Trade Secret
& Proprietary Information Agreement. In the event of termination of your employment
for any other reason, you shall receive compensation earned through the date of
termination and your rights with respect to options shall be as specified in the
applicable option agreements.
(b) In order to receive any of the benefits described in Section 6(a) under
this Letter Agreement (the “Severance Benefits”), you must (i) execute and deliver
to the Company a release of claims satisfactory to the Company (but which will not
require release of any Company payments due to you that are otherwise payable at the
date of termination of this Letter Agreement) within the time prescribed therein but
in no event later than fifty (50) days of the date of your termination of employment
and (ii) not revoke such release pursuant to any revocations rights afforded by law.
The Company shall provide to you the form of release no later than three (3) days
following your termination of employment. If you do not timely execute and deliver
to the Company such release, or if you execute such release but revoke it, no
Severance Benefits shall be paid.
(c) The Severance Benefits described in Section 6(a)(i) above shall be paid,
minus applicable deductions, including deductions for tax withholding, in equal
payments on the regular payroll dates during the one-year period following your
termination of employment. Commencement of payments of the Severance Benefits
described in Section 6(a)(i) shall begin on the first payroll date that occurs in
the month that begins at least 60 days after the date of your termination of
employment, but which may be accelerated by no more than 30 days (the “Starting
Date”) provided that you have satisfied the requirements of Section 6(b) of this
Agreement. The first payment on the payment Starting Date shall include those
payments that would have previously been paid if the payments of the Severance
Benefits described in Section 6(a)(i) had begun on the first payroll date following
your termination of employment. This timing of the commencement of benefits is
subject to Section 11 below.
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(d) For purposes of this Letter Agreement, “termination of employment” shall
mean a “separation of service” as defined in Section 409A of the Internal Revenue
Code of 1986, as amended, (the “Code”) and Treasury Regulations Section 1.409A-1(h)
without regard to the optional alternative definitions available thereunder.
(e) Your entitlement to the payments of the Severance Benefits described in
Section 6(a)(i) shall be treated as the entitlement to a series of separate payments
for purposes of Section 409A of the Code.”
| 3. | A new Section 11 is hereby inserted after Section 10 to read as follows: |
“11. Section 409A.
(a) Potential Six-Month Delay. Notwithstanding any other provisions of
this Letter Agreement, any payment of the Severance Benefits under this Letter
Agreement that the Company reasonably determines is subject to Section
409A(a)(2)(B)(i) of the Code shall not be paid or payment commenced until the later
of (i) six (6) months after the date of your termination of employment (or, if
earlier, your death) and (ii) the Starting Date. On the earliest date on which such
payments can be commenced without violating the requirements of Section
409A(a)(2)(B)(i) of the Code, you shall be paid, in a single cash lump sum, an
amount equal to the aggregate amount of all payments delayed pursuant to the
preceding sentence.
(b) Savings Clause. It is intended that any amounts payable under this
Letter Agreement shall either be exempt from or comply with Section 409A of the Code
(including Treasury regulations and other published guidance related thereto) so as
not to subject you to payment of any additional tax, penalty or interest imposed
under Section 409A of the Code. The provisions of this Letter Agreement shall be
construed and interpreted to avoid the imputation of any such additional tax,
penalty or interest under Section 409A of the Code yet preserve (to the nearest
extent reasonably possible) the intended benefit payable to you. Notwithstanding
the foregoing, the Company makes no representation or warranty and shall have no
liability to you or to any other person if any of the provisions of this Letter
Agreement are determined to constitute deferred compensation subject to Section
409A, but that do not satisfy an exemption from, or the conditions of, that
section.”
| 4. | The definition of Good Reason in Annex A of the Letter Agreement is amended in its entirety to read as follows: |
“A termination of employment by you for “Good Reason” means your resignation
of employment within one year of the occurrence (without your written consent) of
any of the following conditions or events: (i) any material reduction in your base
salary, (ii) a material reduction in your authority with the Company, (iii) any
material breach by the Company of this Letter Agreement; provided, however,
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that none of the foregoing conditions or events shall constitute Good Reason unless
(A) you shall have provided written notice to the Company within ninety (90) days
after the occurrence of such condition or event describing the condition or event
claimed to constitute Good Reason and (B) the Company shall have failed to remedy
the condition or event within thirty (30) days of its receipt of such written
notice.”
| 5. | Equity Grants. The Compensation Committee of the Board of Directors of WebMD Health Corp. (“WHC”) approved the following | ||
| equity grants to you on December 10, 2008 (“date of grant”): | |||
(a) A nonqualified option (the “2008 Options”) to purchase 240,000 shares of WHC’s
common stock under WHC’s Amended and Restated 2005 Long-Term Incentive Plan (the “Plan”) The
per share exercise price is the closing price of WHC’s common stock on the date of grant and
the 2008 Options shall vest subject to your continued employment on the applicable vesting
dates (except as set forth in the following sentences) in equal annual installments of 25%
commencing on March 31, 2010 (full vesting on March 31, 2013). In the event of a Change of
Control of HLTH Corporation (“HLTH”) (as defined in its 2000 Long Term Incentive Plan) or a
Change of Control of WHC (as defined in the Plan), you may resign at any time after the one
year anniversary of such Change of Control and the 2008 Options shall continue to vest and
remain outstanding through the second anniversary of the Change of Control and the 90 day
post termination exercise period would commence on the second vesting date, subject to your
execution of a release of claims in a form approved by the Company and continued compliance
with the Trade Secret and Proprietary Information Agreement; provided, however, that in no
event shall a transaction between HLTH and WHC constitute a Change of Control for either
company and provided further that a Change of Control of WHC or HLTH shall not be deemed to
have occurred if a split-off, spin-off or other transaction that results in WHC no longer
being a subsidiary or affiliate of HLTH that occurs in connection with a Change of Control
of HLTH. In the event that your employment is terminated without Cause or Good Reason on or
following such a Change of Control of HLTH or WHC, the 2008 Options shall continue to vest
and remain outstanding through the second anniversary of the Change of Control and the 90
day post termination exercise period would commence on the second vesting date, subject to
your execution of a release of claims in a form approved by the Company and continued
compliance with the Trade Secret and Proprietary Information Agreement. The 2008 Options
will have a term of ten years, subject to earlier expiration in the event of termination of
employment in accordance with the Plan. Subject to the terms of this Section, the 2008
Options shall be evidenced by the Company’s standard form of option agreement.
(b) 60,000 shares of Restricted Stock (the “2008 Restricted Shares”) under the terms of
the Plan. The 2008 Restricted Shares shall vest and the restrictions thereon lapse in the
same manner as the 2008 Options subject to your continued employment on the applicable
vesting dates except as set forth in the following sentences. In the event of a Change of
Control of HLTH or of WHC, you may resign at any time after the one year anniversary of such
Change of Control and that portion of the 2008 Restricted Shares that
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would have vested through the second anniversary of the Change of Control will
accelerate to the date of termination; subject to the same provisos as set forth above with
respect to the 2008 Options and subject to your execution of a release of claims in a form
approved by the Company. In the event that your employment is terminated without Cause or
for Good Reason on or following a Change of Control of HLTH or WHC, that portion of the 2008
Restricted Shares that would have vested through the second anniversary of the Change of
Control will accelerate to the date of termination and subject to your execution of a
release of claims in a form approved by the Company. Subject to the terms of this Section,
the 2008 Restricted Shares shall be evidenced by the Company’s standard form of restricted
stock agreement.
Except as set forth herein, the Letter Agreement remains in full force and effect.
| Sincerely, |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President | |||
Agreed to:
|
/s/ Xxxxx Xxxxxxxxxx
|
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