WebMD, LLC 111 Eighth Avenue New York, NY 10011 212-624-3700 As of December 14, 2008 Steven Zatz, M.D. c/o WebMD Health Corp. 111 Eighth Avenue New York, NY 10011-5201 Dear Steve:
Exhibit 10.74
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 14, 2008
Dear Xxxxx:
The purpose of this letter amendment is to amend the letter agreement between you and WebMD
Health Corp. (previously known as WebMD Health Holdings, Inc., the “Company”) dated as of
July 14, 2005 (the “Agreement”) in a manner intended to bring the Agreement into compliance
with Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations
issued thereunder. Accordingly, your execution of this letter amendment indicates your agreement
to the amendment of the Agreement as set forth below:
| 1. | Section 2(b) is amended by deleting the last sentence thereof. | ||
| 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 the fourth anniversary of the
Effective Date, 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 on the date hereof 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 that
you would have received for such year 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 that portion of the COBRA
premium that it would pay if you were an active employee with the same type of
coverage through the Severance Period or, if earlier, until you are eligible for
comparable coverage with a subsequent employer, in each case. 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 Effective Date, 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 and restricted stock will be as specified in the applicable
option or restricted stock agreements.
(b) In order to receive any of the benefits described in Section 6(a) under
this 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 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 12 below.
(d) For purposes of this 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) All Severance Benefits shall be completed by, and no further Severance
Benefits shall be payable after, December 31 of the second taxable year following
the year in which your termination of employment occurs.
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(f) 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 12 is hereby inserted after Section 11 to read as follows: |
“12. Section 409A.
(a) Potential Six-Month Delay. Notwithstanding any other provisions of
this Agreement, any payment of the Severance Benefits under this 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
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 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 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 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 Agreement; provided, however, 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.” |
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| Except as set forth herein, the Agreement remains in full force and effect. |
| Sincerely, |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Executive Vice President | |||
Agreed to:
|
/s/ Xxxxxx Xxxx
|
Date: December 16, 2008
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