Exhibit 10.04
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") , made as of the 15 day of
June, 1999 (the "Effective Date"), by and between REALMED CORPORATION, an
Indiana corporation (the "Company") and Xxxxxx X. Xxxxx, an individual resident
of Indiana ("Executive").
WHEREAS, the Company desires to employ Executive as the Chief Executive
Officer and Executive desires to be so employed on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Executive and the Company
including, without limitation, the promises and covenants of the parties set
forth herein, the parties hereto, intending to be legally bound, hereby agree to
as follows:
ARTICLE I
EMPLOYMENT
Section 1.1 Term of Employment. The term of Executive's employment
under this Agreement shall commence on June 15, 1999 and continue for a period
of five years, unless earlier terminated as provided in this Agreement. At the
end of the initial five year term, this Agreement shall automatically renew for
consecutive two year terms unless either party hereto gives written notice to
the other of its intent to terminate this Agreement at least sixty days prior to
the end of the initial term or any renewal term (a "Section 1.1 Termination").
Notwithstanding the foregoing, the indemnification provisions of this Agreement
contained in Section 4.2 regarding an Excess Parachute Payment (as defined
below) on account of a Change in Control (as defined below) shall survive until
the expiration of the statute of limitations for assessment of any excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code").
Section 1.2 Duties and Responsibilities of Executive. Executive is
hereby employed as the Chief Executive Officer of the Company. The Company
acknowledges that Executive has prior commitments to Newcourt Credit Group,
Inc., its successors and assigns, and any of its affiliates (collectively
"Newcourt"), and, while working as an executive employee for the Company, shall
also remain an employee of Newcourt. Executive may devote whatever time and
attention to Newcourt business that he deems reasonable and proper.
Notwithstanding his commitments to Newcourt, Executive shall devote the majority
of his time, energy, and skill to such office and shall do and perform all
services and acts necessary or advisable to fulfill the duties of such office.
In his capacity as Chief Executive Officer of the Company, Executive shall
report to the Board of Directors of the Company, and shall conduct and perform
such additional services and activities as may be determined from time to time
by the Board of Directors of the Company. Executive's authority from and
responsibility to the Company shall at all times be subject to the review and
discretion of the Board of Directors of the Company. Executive acknowledges that
he has a duty of loyalty to the Company and, except for his commitments to
Newcourt, shall not engage in, directly or indirectly, any other business or
activity that could materially and adversely affect the Company's business or
Executive's ability to perform his duties under this Agreement; provided,
however, that the Executive shall be free to participate in civic and charitable
activities so long as such activities do not materially interfere with his
duties and responsibilities hereunder.
Section 1.3 Compensation. For services to be rendered by Executive
under this Agreement, the Company shall pay Executive as follows:
(a) Base Salary. Executive shall be paid a
minimum annual gross salary of two hundred fifty
thousand dollars ($250,000), payable biweekly.
Executive's annual gross salary may be upwardly
adjusted from time to time by the Board of Directors
of the Company. At no time during the term of this
Agreement shall Executive's base salary be decreased
from the amount of the base salary then in effect.
Executive's base salary shall be earned and accrued
on a per diem basis.
(b) Pre-IPO Bonus. At any time prior to the
initial public offering of any of the Company's stock
pursuant to an effective registration statement under
the Securities Act of 1933 (an "IPO"), the Executive
shall be part of a bonus pool consisting of senior
management of the Company. Each year, the Company's
Board of Directors, in its discretion, may pay
bonuses to such bonus pool; provided, however, that
any bonus paid to Executive shall be equal to the
bonus paid to Xxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx.
(c) Post-IPO Bonus. Subsequent to the
closing of an IPO, Executive shall be entitled to
receive annual bonuses pursuant to a bonus
arrangement then in effect, which arrangement shall
be adopted by the Board of Directors of the Company
after consultation with an independent consulting
firm and which arrangement shall provide for bonus
arrangements comparable to those provided to
executives similarly situated to Executive.
Section 1.4 Tax Reimbursement Payment.
(a) Notwithstanding anything to the contrary
contained in this Agreement, or in any plan of the
Company, or in any other agreement or understanding,
the Company will pay to the Executive, at the times
herein specified, an amount (the "Additional Amount")
equal to the excise tax under Section 4999 of the
Code, if any, incurred or to be incurred by the
Executive by reason of the payments under this
Agreement, acceleration of vesting of stock options,
stock appreciation rights or restricted stock granted
under the Company's various stock option, stock
appreciation or other employee incentive plans, or
payments under any other plan, agreement or
understanding between the Executive and the Company,
constituting Excess Parachute Payments (as defined
below), plus all excise taxes and federal, state and
local income taxes incurred or to be incurred by the
Executive with respect to the receipt of the
Additional Amount. For purposes of this Agreement,
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the term "Excess Parachute Payment" shall mean any
payment or any portion thereof which would be an
"excess parachute payment" within the meaning of
Section 280G(b) of the Code, and which would result
in the imposition of an excise tax on the Executive
under Section 4999 of the Code.
(b) All determinations required to be made
regarding the Additional Amount, including whether
payment of any Additional Amount is required and the
amount of any Additional Amount, shall be made by the
independent accounting firm which is advising the
Company (the "Accounting Firm"), which shall provide
detailed support calculations to the Company and the
Executive on or before the last day of the calendar
year during which occurs the Change in Control (the
"Change in Control Year"). In computing taxes, the
Accounting Firm shall use the highest marginal
federal, state and local income tax rates applicable
to single taxpayers for the year in which the
Additional Amount is to be paid (unless, within
thirty (30) days after the occurrence of the Change
in Control the Executive specifies in writing to the
Company his marginal tax rate) and shall assume the
full deductibility of state and local income taxes
for purposes of calculating federal income tax
liability. The portion of the Additional Amount based
on the excise tax as determined by the Accounting
Firm to be due for the Change in Control Year shall
be paid to the Executive no later than March 1
immediately following the end of the Change in
Control Year. The portion of the Additional Amount
based on the excise tax as determined by the
Accounting Firm to be due for each calendar year
following the Change in Control Year shall be paid to
the Executive on or before March 1 immediately
following the end of each such calendar year. If the
Company determines that the excise tax for any year
will be different from the amount originally
calculated in the report of the Accounting Firm
delivered at the end of the Change in Control Year,
then the Company shall provide to the Executive
detailed support calculations by the Accounting Firm
specifying the basis for the change in the Additional
Amount.
(c) As a result of the uncertainty in the
application of Section 280G of the Code at the time
of the initial determination by the Accounting Firm
of an Additional Amount under Section 1.4(b) hereof,
it is possible that an Additional Amount in excess of
the amount initially determined which will not have
been made by the Company should have been made (an
"Underpayment"). In the event that the Accounting
Firm, based upon controlling precedent, determines
that any Underpayment has occurred, such Underpayment
shall promptly be paid by the Company to or for the
benefit of the Executive, together with interest at
the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code.
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(d) The Executive shall notify the Company
in writing of any claim by the Internal Revenue
Service that, if successful, would require the
payment by the Executive of any excise tax under
Section 4999 of the Code beyond any amount of such
excise tax for which an Additional Amount had
theretofore been determined by the Accounting Firm
under Section 1.4(b) hereof. Such notification shall
be given as soon as practicable but no later than ten
business days after the Executive is informed in
writing of such claim and shall apprise the Company
of the nature of such claim and the date on which
such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of
the 30_day period following the date on which he
gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes
with respect to such claim is due). If the Company
notifies the Executive in writing prior to the
expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give to the Company any information reasonably
requested by the Company relating to such
claim;
(ii) take such action, at the expense of the
Company, in connection with contesting such
claim as the Company shall reasonably request
in writing from time to time, including,
without limitation, accepting legal
representation with respect to such claim
by an attorney reasonably satisfactory to the
Executive;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and
pay directly all costs and expenses (including
additional interest and penalties) incurred in
connection with such contest and shall
indemnify and hold the Executive harmless, on an
after-tax basis, for any excise tax or federal, state
and local income tax (including interest and
penalties with respect thereto) imposed as a result
of such representation and payment of costs and
expense. Without limitation on the foregoing, the
Company shall control all proceedings taken in
connection with such contest and, at its sole option,
may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with
the Internal Revenue Service or other taxing
authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the
tax (including any penalties or interest) claimed and
pursue a claim for a refund administratively or by
bringing a proceeding in court, and the Executive
agrees to prosecute such contest to a determination
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before the Internal Revenue Service or other taxing
authority, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs the Executive to pay such claim and seek a
refund, the Company shall advance the amount of such
payment to the Executive, on an interest_free basis
and shall indemnify and hold the Executive harmless,
on an after_tax basis, from any excise tax or
federal, state and local income tax (including
interest and penalties with respect thereto) imposed
with respect to such advance or with respect to any
imputed income with respect to such advance; and
further provided that any extension of the statute of
limitations relating to payment of taxes for the
taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to
issues with respect to which an Additional Amount
would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
(e) If, after the receipt by the Executive
of an amount advanced by the Company pursuant to the
last sentence of Section 1.4(d), the Executive
receives any refund of any amount paid with the
amount advanced, the Executive shall promptly pay to
the Company the amount of such refund (together with
any interest paid or credited thereon net of any
federal, state, or local income taxes of the
Executive (determined in the manner prescribed by
Section 1.4(b) hereof) with respect to such
interest). If, after the receipt by the Executive of
any amount advanced by the Company pursuant to the
last sentence of Section 1.4(d), a final
determination is made that the Executive is not be
entitled to any refund with respect to such claim,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of
any Underpayment otherwise payable under Section
1.4(c).
Section 1.5 Benefits.
(a) Vacation. Executive shall be entitled to
four weeks paid vacation during each calendar year
during the term of this Agreement. Vacation not used
during any calendar year may be carried forward to
the next year; provided, however, that no more than
four weeks of unused vacation time may be carried
forward from one year to the next year.
(b) Life, Disability and Retirement
Programs. Executive shall be entitled to participate
in any life, disability and retirement programs which
may from time to time be offered generally to all of
the other members of the senior management personnel
of the Company.
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(c) Group Insurance. Executive shall be
entitled to participate in any group health, dental,
and vision insurance programs which may from time to
time be offered generally to all of the other members
of the senior management personnel of the Company.
Section 1.6 Stock Options. Executive shall be granted an option to
purchase one million (1,000,000) shares of the Company pursuant to that certain
1999 Stock Option and Incentive Plan (the "Plan") and that certain Stock Option
Agreement dated as of June 15, 1999 ("SO Agreement") and an additional two
hundred fifty thousand (250,000) restricted shares of the Company pursuant to
the Plan and that certain Restricted Stock Agreement dated as of June 15, 1999
("RS Agreement") (such options and shares to be drawn from the employee option
pool and subject to such terms and conditions as set forth in the SO Agreement
and the RS Agreement). In addition, Executive shall be entitled to participate
in any other incentive and stock option plans which may from time to time be
offered generally to all of the other members of the senior management personnel
of the Company and to members of the Board of Directors.
Section 1.7 Business Expenses. Executive shall be entitled to
reimbursement of all ordinary and necessary business expenses reasonably
incurred by him for business travel (including reasonable moving expenses),
communications, entertainment and meals in connection with the performance of
Executive's duties under this Agreement in accordance with the Company's
policies for reimbursement of business expenses in effect from time to time as
reasonably approved by the Board of Directors of the Company.
ARTICLE II
COVENANTS OF EXECUTIVE
Section 2.1 Confidential Information. Executive acknowledges that in
connection with his employment by the Company, Executive may be given access to,
generate, or otherwise come into contact with or become aware of certain
proprietary, secret and/or confidential information and materials which are the
property of or relate to (a) the Company, and/or (b) the Company's business of
electronic health-care industry claims resolution procedures, customers, clients
or suppliers (collectively, "Confidential Matters"). Confidential Matters shall
include, without limitation, all information and materials created or developed
by, provided to or otherwise disclosed to Executive in connection with
Executive's employment by the Company (excepting only information and materials
already known to the public), including, without limitation, all of the
following:
(a) trade secrets, know-how and all other
business, financial or technical information which
gives or could give the Company a competitive
advantage;
(b) software used by the Company (including
source code and object code) and associated layouts,
templates, processes, documentation, databases,
designs and techniques, and all modifications thereto
(collectively, "Confidential Software");
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(c) the names and addresses of the Company's
past, present or prospective customers or clients and
all documents, information and materials which
concern or relate to such customers or clients,
regardless of whether such documents, information and
materials were supplied or produced by the Company or
such customers or clients;
(d) inventions, improvements, innovations,
research and development, software and all other
discoveries or work product created or used by the
Company, including those which are conceived or
developed by Executive alone or with others in
connection with Executive's employment by the
Company, or which are conceived or developed by
Executive after termination of such employment by
using Confidential Matters; and
(e) information concerning the Company's
products, services, systems, methods, employees,
technology, suppliers, licensors, affiliates,
financing sources, profits, revenues, financial
condition and affairs, marketing plans or programs,
and business strategies and practices.
Notwithstanding anything in this Agreement to the contrary, any information or
other matter of or relating to Newcourt's businesses, customers, clients or
suppliers shall not be deemed to be Confidential Matters covered by this
Agreement, including, without limitation, any information relating to potential
financing opportunities which may be discovered by Executive in his capacity as
an employee of the Company.
Executive acknowledges and agrees that Confidential Matters
are the property of the Company and that Executive shall not acquire any
ownership rights in Confidential Matters. Executive shall:
(a) use Confidential Matters solely in
connection with Executive's employment by the
Company; and
(b) hold Confidential Matters in trust and
confidence, and use all reasonable means to assure
that they are not directly or indirectly disclosed to
or copied by unauthorized persons or used in an
unauthorized manner, both during and after
Executive's employment by the Company.
Executive shall not load, install, copy, store or otherwise
retain any Confidential Software on any computer or other device which is not
Company property without first obtaining the Company's written consent.
To the extent that Executive creates or develops any Confidential
Matters, Executive shall:
(a) promptly disclose them to the Company;
and
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(b) at the Company's request, assign them to
the Company and execute all documents and do all
things necessary to assist the Company in obtaining
such patent, copyright, trademark, trade secret
and/or other protection as the Company in its sole
discretion deems necessary or appropriate, with the
Company to pay all resulting expenses.
Upon termination of Executive's employment with the Company
for any reason, Executive shall delete all Confidential Matters from the memory
of any computer belonging to Executive and shall turn over to the Company (a)
all documents and other materials (including, without limitation, all tapes,
floppy disks and other forms of electronic storage media) which constitute,
contain or are derived from Confidential Matters; and (b) all other documents,
notes, work product and other materials connected with or arising out of
Executive's employment with the Company.
Section 2.2 Non-solicitation of Customers and Non-Competition. During
the term of his employment with the Company under this Agreement, and for a
period of two years (which shall be extended by the length of any period during
which Executive is in violation of this Section 2.2) after any termination of
the Executive's employment for any reason, Executive shall not (on Executive's
own behalf or that of any other person or entity) directly or indirectly sell or
otherwise provide or solicit the sale or provision of any product, license,
process or service which directly or indirectly competes with any product,
license, process or service of the Company to any person or entity which was, at
the time of termination of Executive's employment, a customer or client of the
Company.
During the term of Executive's employment with the Company under this
Agreement, and for a period of two years (which shall be extended by the length
of any period during which Executive is in violation of this Section 2.2) after
any termination of Executive's employment with the Company for any reason,
Executive shall not (on Executive's own behalf or that of any other person or
entity), without prior written consent of the Board of Directors of the Company,
which consent may be withheld at the sole discretion of the Board of Directors
of the Company, directly or indirectly own, manage, operate, control, invest in,
lend to, acquire an interest in, or otherwise engage or participate in, (whether
as an employee, independent contractor, consultant, partner, shareholder, joint
venturer, investor or any other type of participant), the management or conduct
of any electronic health-care industry claims resolution business or enterprise
that directly or indirectly competes in any Market Area (as defined below) with
any product, license, process or service which the Company sold or provided at
the time of Executive's termination of employment with the Company ("Competitive
Product"). For purposes of this Agreement, Market Area shall mean either (i) the
standard metropolitan statistical area as designated by the federal government
in which the Company sold or provided any Competitive Product or (ii) in all
other cases, the county in which the Company sold or provided any Competitive
Product. Provided, however, that nothing in this Section 2.2 shall prohibit
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Executive from acquiring or holding, for investment purposes only, less than
five percent (5%) of the outstanding publicly traded securities of any
corporation which may compete directly or indirectly with the Company or from
engaging in the business of investment banking. Provided, further that nothing
contained in this section 2.2 shall prohibit Executive from continuing his
employment with Newcourt and if necessary financing a Competitive Product in the
Market Area for and on behalf of Newcourt, including, without limitation,
financing Competitive Products for and on behalf of Newcourt in the Market Area
after termination of his employment with the Company.
Section 2.3 Non-Solicitation of Employees. During the term of
Executive's employment with the Company under this Agreement, and for a period
of two years (which shall be extended by the length of any period during which
Executive is in violation of this Section 2.3), after any termination of
Executive's employment with the Company for any reason (the "Non_solicitation
Period"), Executive shall not, directly or indirectly, through one or more
intermediaries or otherwise, hire, employ, induce, solicit for employment, or
assist others in hiring, employing, inducing or soliciting for employment any
individual who is at any time during the Non_solicitation Period an employee of
the Company. Provided, however, that nothing in this section 2.3 shall apply to
Executive hiring any employee of the Company as an employee or consultant of
Newcourt nor shall it apply to Executive hiring any employee of the Company who
was related to or affiliated with Newcourt prior to working for the Company.
Section 2.4 Injunctive Relief. Executive acknowledges that his actual
or threatened breach of any provision of Article II of this Agreement will cause
or threaten irreparable injury to the Company that cannot adequately be measured
in money damages, and that the Company shall be entitled to obtain injunctive
relief with respect to any such actual or threatened breach by Executive.
Injunctive relief shall be in addition to and not in lieu of any other available
remedies.
Section 2.5 Individual Capacity. This Agreement is entered into with
Executive in his individual capacity and not as an agent or employee of
Newcourt. Notwithstanding the fact that Executive shall also remain an employee
of Newcourt, Executive's obligations under this Article II are personal to him
and shall not be imputed to or otherwise effect Newcourt.
ARTICLE III
TERMINATION OF EMPLOYMENT
Section 3.1 Termination by Company. In addition to termination pursuant
to Section 1.1, Executive's employment under this Agreement may be terminated by
the Company by giving notice to Executive during the term of this Agreement as
follows:
(a) upon Executive's death or, subject to
any applicable federal, state or local laws
(including, but not limited to, the Americans With
Disabilities Act), any disability which renders
Executive incapable of performing his duties
hereunder for more than one hundred twenty calendar
days (termination under this Section 3. 1(a) shall be
deemed termination "without Cause");
(b) for any reason not constituting "for
Cause" (as defined below) following a determination
by the Board of Directors of the Company to terminate
Executive's employment (termination under this
Section 3.1(b) shall also be deemed termination
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"without Cause"; provided, however, that a Section
1.1 Termination shall not constitute a termination
"without Cause"); or
(c) "for Cause," which for purposes of this
Agreement shall mean that the Executive shall have:
(i) committed an act of fraud,
embezzlement or theft in connection with his
duties under this Agreement at any time
subsequent to the date of this Agreement;
(ii) intentionally inflicted material
damage to any material asset of the
Company or the Company;
(iii) breached any provision of Article
II of this Agreement;
(iv) engaged in the illegal use of
drugs during the term of this Agreement or
been under the influence of alcohol during
the performance of his duties under this
Agreement;
(v) been convicted of any crime
constituting a felony under applicable law,
other than a felony related to the operation
of a motor vehicle;
(vi) committed any act of dishonesty
against the Company;
(vii) committed any intentional tort
against the Company or any employee of the
Company; or
(viii) committed any act of gross
insubordination.
Section 3.2 Termination by Executive. Executive's employment under this
Agreement may be terminated by Executive for "Good Reason" (as defined below) or
otherwise, by giving Company at least 30 days advanced written notice or
termination. For purposes of this Agreement, "Good Reason" shall mean, the
occurrence of any of the following events, unless such event has been consented
to by Executive in writing or such event is fully corrected as provided below:
(a) a material breach by the Company of any
material provision of this Agreement, including, but
not limited to, the assignment to Executive of any
duties materially inconsistent with Executive's
position in the Company or a material adverse
alteration in the nature or status of Executive's
responsibilities; provided, however, that in the
event of this subsection (a) being the sole basis for
termination, Executive shall furnish the Company in
writing a notice of proposed termination setting
forth a specific statement of the Good Cause for
which termination is sought. The Company shall then
have a period of ninety days after the giving of such
notice of proposed termination by Executive in which
to cure the breach specified in such notice. If at
the end of such ninety day period no such cure has
been effected, the Executive's employment shall be
terminated at the end of such ninety day period.
(b) the occurrence of a "Change in Control"
as defined below.
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For purposes of this Agreement a "Change in Control" shall mean an
event as a result of which: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), is
or becomes the "beneficial owner" (as defined in Rule 13d_3 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 40% of the total voting power of the voting stock of
the Company; (ii) the Company consolidates with, or merges with or into another
corporation or sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of its assets to any person or any corporation
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding voting stock of the Company
is changed into or exchanged for cash, securities or other property, other than
any such transaction where (A) the outstanding voting stock of the Company is
changed into or exchanged for (x) voting stock of the surviving, or transferee
corporation or (y) cash, securities (whether or not including voting stock) or
other property, and (B) the holders of the voting stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
60% of the voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) individuals who at the date of the
Merger constitute the Board of the Company (together with any new directors
whose election by such Board or whose nomination for election by the
stockholders of the Company was approved by a vote of 66 2/3% of the directors
then still in office who are either directors at the date of the Merger or whose
election or nomination for election was previously so approved) ceased for any
reason to constitute a majority of the Board of the Company then in office; or
(iv) the Company is liquidated or dissolved or adopts a plan of liquidation;
provided, however that a Change in Control shall not be deemed to have occurred
if (aa) all of the shares of common stock of the Company owned (legally or
beneficially) by Executive were not voted against the transaction which would,
but for this proviso, constitute a Change in Control, or (bb) such Change in
Control relates to an IPO.
Section 3.3 Severance. For purposes of this Agreement,
Executive's entitlement to any severance payments upon termination of his
employment shall be as set forth below:
(a) If, prior to the closing of an IPO
Executive is terminated without Cause pursuant to
Section 3.1(a) or Section 3.1(b) or resigns for Good
Reason (i) Executive shall be entitled to severance
pay of $1,000,000, payable in a lump sum on the date
of such termination; (ii) all of Executive's rights
to options to purchase common stock of the Company
shall vest, (iii) all of the restrictions on
Executive's restricted stock of the Company granted
to him pursuant to the RS Agreement shall lapse and
become fully vested, and (iv) at the option of
Executive, the Company shall either (A) loan
Executive an amount equal all applicable federal and
state taxes recognized by Executive as a result of
the vesting of such options and restricted stock
pursuant to subsections (ii) and (iii) above (the
"Recognized Taxes"), including, without limitation,
all federal and state income and Medicare taxes,
which loan shall bear interest at the lowest rate at
which interest income shall not be imputed to
Executive for federal income tax purposes, interest
and principal being due and payable at the earlier of
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an IPO or 3 years from the date of Severance, or (B)
purchase from Executive, at such price as Executive
and Company may agree upon, so many shares so vested
as are necessary to pay the Recognized Taxes;
(b) If, after the closing of an IPO,
Executive is terminated without Cause pursuant to
Section 3.1(a) or Section 3.1(b) or resigns for Good
Reason Executive shall be entitled to receive
severance pay pursuant to a severance arrangement
then in effect, adopted by the Board of Directors of
the Company after consultation with an independent
consulting firm and which arrangement shall provide
for severance pay comparable to severance pay
provided to executives similarly situated to
Executive.
(c) In the event of a Section 1.1
Termination, a termination of Executive for Cause, a
termination by Executive for any reason other than
Good Reason, or any other termination of or by
Executive (other than as set forth in Sections 3.3(a)
and 3.3(b)), then Executive shall not receive any
severance pay (and Executive shall forfeit all unused
vacation time and any stock options or restricted
stock which has not then vested), unless, and to the
extent that, some severance pay is approved in
writing by the Board of Directors of the Company in
his sole discretion. In the event the Executive shall
provide thirty days prior written notice of his
intent to resign, the Company may accept such
resignation effective as of any date during such
thirty day period as the Company deems appropriate,
provided that the Executive shall receive from the
Company the per diem portion of his salary and be
entitled to participate at the Company's expense in
any Company sponsored benefit programs in which he
was a participant as of the effective date of his
resignation for the duration of such thirty day
period. Notwithstanding the foregoing, Executive
shall receive the per diem portion of such annual
salary that is accrued but unpaid up to the date of
any termination for Cause.
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes and
withholding as shall be required pursuant to any applicable law, rule or
regulation.
Section 4.2 Attorneys' Fees. If either party shall institute litigation
or arbitration to enforce any of its rights under this Agreement, the prevailing
party shall be entitled to recover from the other party the prevailing party's
reasonable attorneys' fees and costs incurred in any such litigation or
arbitration.
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Section 4.3 Notice. For purposes of this Agreement, all communications
including, without limitation, notices, consents, requests or approvals,
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or five (5) business days after having been
mailed by United States registered mail or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive office or to Executive at
his principal residence, or to such other address as any party may have
furnished to the other in writing and in accordance herewith, except the notices
of change of address shall be effective only on receipt.
Section 4.4 Governing Law. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Indiana, without giving effect to the principles of conflict of
laws of such State. Any and all actions concerning any dispute arising under
this Agreement shall be filed and maintained only in a state or federal court
sitting in the State of Indiana, and each party hereby consents and submits to
the jurisdiction of such state or federal court.
Section 4.5 Validity. It is not the intent of any party hereto to
violate any public policy of any jurisdiction in which this Agreement may be
enforced. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal; provided, however, if the provision so held to be
invalid, unenforceable or otherwise illegal constituted a material inducement to
a party's execution and delivery of this Agreement, such provision shall not be
reformed unless prior to any reformation that party agrees to be bound by the
reformation.
Section 4.6 Entire Agreement. This Agreement supersedes any other
agreements, oral or written, between the parties with respect to the subject
matter hereof, and contains all of the agreements and understandings between the
parties with respect to the employment of the Executive by the Company. Any
waiver or modification of any term of this Agreement shall be effective only if
it is set forth in a writing signed by all parties hereto.
Section 4.7 Successors and Binding Agreement.
(a) This Agreement shall be binding upon and
inure to the benefit of the Company and any Successor
of or to the Company, but shall not otherwise be
assignable or delegable by the Company. "Successor"
shall mean any successor in interest, including,
without limitation, any entity, individual or group
of persons acquiring, directly or indirectly all or
substantially all of the business or assets of the
Company, as the case may be, whether by sale, merger,
consolidation, reorganization or otherwise.
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(b) The Company shall require any Successor
to agree at the time of becoming a Successor to
perform this Agreement to the same extent as the
original parties would be required if no succession
had occurred.
(c) This Agreement shall inure to the
benefit of and be enforceable by Executive's personal
or legal representatives, executors, administrators,
heirs, distributes and legatees.
(d) This Agreement is personal in nature and
neither of the parties shall, without the consent of
the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder
except as expressly provided in this Section 4.7.
Section 4.8 Captions. The captions in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
Section 4.9 Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and the Company. No waiver by a party
hereto at any time of any breach by another party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provision or conditions at the
same or at any prior or subsequent time.
Section 4.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date first above written.
"Company" "Executive"
RealMed Corporation
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxx
Signature Signature
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
Printed Name, Title Printed Name, Title
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