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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of March 4, 1999, is by and between
MEDSCAPE, INC., a New York corporation with offices at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Medscape"), and XXX XXXXX, an individual with an address
at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 ("Xxxxx").
1. Employment. Medscape hereby employs Xxxxx during the Term
(as hereinafter defined) as President, Medscape Consumer Division, and she will
report directly to the Executive Vice President of Medscape. As such, Xxxxx'x
responsibilities will include the formulation and implementation of Medscape's
strategy to leverage and extend xxxxxxxx.xxx.'s position as the leading
professional healthcare website to also become the leading consumer healthcare
website. Xxxxx will be directly responsible for all sales of banners,
sponsorships and related promotional products to pharmaceutical and other
sponsors of Medscape Consumer Division, as well as developing and managing new
product lines for Medscape Consumer Division (e.g., webcasting). In addition to
Xxxxx'x sales responsibilities, she will also be directly responsible for
Medscape Consumer's metric marketing group (Xxx Drill and her staff). The
Medscape Consumer sales group and the Medscape Consumer metric marketing group
will report to Xxxxx. If and when a free-standing consumer marketing department
is created, it will report to Xxxxx.
2. Performance of Services.
(a) Xxxxx hereby accepts such employment and agrees that
throughout the period of her employment hereunder she will devote such business
time and attention, as well as her full knowledge and skills, faithfully,
diligently and to the best of her ability, in furtherance of the business of
Medscape in connection with the performance of her duties as described in
Paragraph 1 hereof, and subject, at all times, to the policies of Medscape
generally applicable to its employees.
(b) Medscape Consumer Division will receive dedicated
support from the other Medscape departments: Editorial, Marketing, Production,
Business Development and Finance.
3. Term. Xxxxx shall be employed for an initial term
commencing as of the date hereof (the "Commencement Date"), and ending on the
third anniversary of such date (the "Term"), unless her employment is terminated
prior to the expiration of the Term pursuant to the provisions hereof.
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4. Compensation.
(a) Base Compensation. As compensation for her services
hereunder, during the Term, Medscape will pay to Xxxxx a salary (the "Base
Salary") at the rate of One Hundred Sixty-Five Thousand ($165,000.00) Dollars
per annum, payable in accordance with Medscape's standard payroll procedures.
The Base Salary may be increased annually based on the recommendation of
Medscape's Executive Vice President and President and the approval of its Board
of Directors.
(b) Signing Cash Bonus. Xxxxx will be entitled to a signing
bonus payment ("Signing Cash Bonus") of Ten Thousand ($10,000.00) Dollars,
payable within sixty (60) days of the Commencement Date.
(c) Performance Cash Bonus. In addition to Xxxxx'x Base
Salary and Signing Cash Bonus, Xxxxx will be entitled to a performance bonus
payment of Fifty Thousand ($50,000.00) Dollars ("Performance Cash Bonus") should
the revenues actually received by Medscape (recognized in accordance with
Medscape's revenue recognition policy) from Medscape Consumer Division
("Consumer Revenues") meet or exceed Four Million ($4,000,000.00) Dollars on or
before the date which is fifteen months after the Commencement Date.
(d) Stock Options.
(i) In addition to Xxxxx'x Base Salary, Signing Cash
Bonus and Performance Cash Bonus, Xxxxx will be granted on the Commencement Date
85,000 options to purchase Medscape's Class B Common Stock ("Common Stock") at
an exercise price of $2.50 per share (the "Incentive Stock Options"). The
Incentive Stock Options will vest over a period of four (4) years as follows:
one-fourth (1/4) of the Incentive Stock Options will become exercisable on the
first anniversary of the Commencement Date, and the balance of the Incentive
Stock Options will become exercisable in equal monthly installments over the
next succeeding three (3) years.
(ii) In addition to Xxxxx'x Base Salary, Signing Cash
Bonus, Performance Bonus and Incentive Stock Options, Xxxxx will be granted upon
the Commencement Date 70,000 options to purchase Medscape's Class B Common Stock
at an exercise price of $2.50 per share (the "Additional Stock Options"), which
shall fully vest on the earlier of (i) the seventh anniversary of this Agreement
provided that Xxxxx is a Medscape employee on such anniversary or (ii) the dates
set forth below if Consumer Revenues meet or exceed the following amounts:
Date Consumer Revenues Additional Stock Options
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June 4, 2000 $4,000,000 to 4,999,999* 25,000
June 4, 2000 $5,000,000 and up* 10,000
June 4, 2001 $8,000,000 to 8,999,999** 25,000
June 4, 2001 $9,000,000 and up** 10,000
* During the period from the Commencement Date to June 4, 2000.
**During the period commencing June 4, 2000 to June 4, 2001.
Notwithstanding the foregoing, to the extent that the value of the Additional
Stock Options vesting in any one year, when aggregated with the Incentive Stock
Options (collectively with the Additional Stock Options, the "Compensation
Options") vesting in that same year exceeds $100,000.00, the vesting of those
excess Additional Stock Options ("Excess Option") shall roll over to the next
succeeding year in which the aggregate value of Compensation Options does not
exceed $100,000.
(iii) If Xxxxx'x employment hereunder is terminated
prior to the vesting of any Compensation Options, such unvested Compensation
Options shall be forfeited except that any Excess Options shall vest in full
upon such termination and provided that if Xxxxx'x employment is terminated by
Medscape without Good Cause (as defined below), and Consumer Revenues to date in
such year have met or exceeded the amount(s) which would trigger earlier vesting
as provided in Paragraph 4(d)(ii), Additional Stock Options will vest as if the
date of termination were the anniversary date.
Except to the extent inconsistent with the terms hereof, the
terms and conditions of the Incentive Stock Options and Additional Options will
be subject to the Medscape 1996 Stock Option Plan, as amended and Medscape's
current form of Incentive Stock Option Agreement. The Compensation Options shall
constitute and be treated as "incentive stock options" as defined under Section
422 of the Internal Revenue Code of 1986, as amended, for federal income tax
purposes.
5. Expenses. Medscape shall reimburse Xxxxx for all expenses
reasonably incurred by her in connection with the performance of her duties
hereunder and the business of Medscape, upon the submission to Medscape of
appropriate vouchers therefor, all in accordance with Medscape's policies and
procedures as in effect from time to time. Medscape shall also pay fifty (50%)
percent of the documented fees and disbursements of counsel to Xxxxx for
services in connection with the negotiation and documentation of this Agreement
up to a maximum reimbursement of $1,500.00.
6. Vacation. Xxxxx shall be entitled to three (3) weeks paid
vacation during the first year of her employment hereunder, and three (3) weeks
paid vacation per year thereafter.
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7. Benefits. Xxxxx shall be entitled to such family health and
medical benefits (including dental), all other employee benefits generally
afforded to senior executives of Medscape and all life and disability insurance
as is provided to Medscape employees generally.
8. Development Rights and Confidential Information.
(a) Xxxxx agrees that any developments by way of invention,
design, copyright, trademark, software or other matters which may be developed
or perfected by her during the Term or which are in process or under
investigation during the Term, and which relate to the business of the Company
or its subsidiaries ("Developments"), shall be the property of Medscape. Xxxxx
will, at the request and expense of Medscape, assist Medscape in applying for
and prosecuting letters patent for any Development in the United States or in
foreign countries if Medscape reasonably requests, and will assign and will
transfer the same to Medscape together with any letters patent, copyrights,
trademarks and applications therefor.
(b) Xxxxx agrees not to disclose or use Confidential
Information (as hereinafter defined) of Medscape except in connection with her
employment by Medscape. For purposes of this Section 8(b), the term
"Confidential Information" shall mean all information in any manner relating to
Medscape's business including, but not limited to, information regarding
business plans and strategies, trade secrets, "know how," inventions, software,
finances, markets, properties, methods of doing business, processes, customers,
staff resumes, employee compensation, or suppliers, whether or not such
information is labeled or otherwise identified as confidential. Irrespective of
the foregoing, no information will be deemed "Confidential Information" if such
information: (i) is part of the public knowledge or literature or becomes part
of the public knowledge or literature, in either case from a source other than
Xxxxx or a source acting at her direction, (ii) is received by Xxxxx in writing
from a third party who is entitled to convey such information to the public, or
(iii) is required by law or court order to be disclosed. Upon termination of
Xxxxx'x employment hereunder, she will deliver to Medscape all equipment,
records, copies of records and any other written information of or pertaining to
Medscape or any subsidiary of Medscape which are then in her possession.
9. Representation and Warranty. Xxxxx represents and warrants
to Medscape that she is not a party to any prior employment agreement or other
agreement which restricts, interferes with or impairs, or which might be claimed
to restrict, interfere with or impair, in any way, Xxxxx'x use of any
information or Xxxxx'x execution or performance of this Agreement.
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10. Restrictive Covenants.
(a) Xxxxx agrees that her services hereunder are of a
special, unique, extraordinary and intellectual character, and her position with
Medscape places her in a position of confidence and trust with the customers and
employees of Medscape and its affiliates. Xxxxx further acknowledges that the
rendering of services to the customers of Medscape and its affiliates
necessarily requires the disclosure of Confidential Information of Medscape. The
parties hereto agree that in the course of Xxxxx'x employment with Medscape,
Xxxxx may develop a personal acquaintanceship and relationship with Medscape's
and its affiliates' customers, and a knowledge of those customers' affairs and
requirements which may constitute the primary contact of Medscape and its
affiliates with such customers. Xxxxx acknowledges that Medscape's and its
affiliates' relationships with its established customers may therefore be placed
in Xxxxx'x hands in confidence and trust. Xxxxx consequently agrees that it is
reasonable and necessary for the protection of the goodwill and business of
Medscape that Xxxxx make the covenants contained herein. Accordingly, Xxxxx
agrees that, so long as she shall be in Medscape's employ and for a period of
nine months after the termination of such employment for any reason whatsoever
other than by Medscape without Good Cause, or by virtue of Medscape's failure to
renew this Agreement, she shall not, whether as an owner, shareholder (other
than in her capacity as holder of less than two (2%) percent of the shares of
any corporation whose shares are traded on a national securities exchange or
over the counter which shall be excepted from this restriction), partner,
employee, consultant, advisor, independent contractor or otherwise, directly or
indirectly compete with the business of Medscape in any manner; provided, that
the foregoing covenant not to compete shall not apply to Xxxxx if (i) her
employment is terminated due to the non-renewal of this Agreement upon the
expiration of the Term or (ii) she is entitled to severance pay pursuant to the
third sentence of Section 12 below and waives in writing in advance such right
to severance pay. Additionally, Xxxxx agrees that so long as she shall be in
Medscape's employ and for a period of one year after the termination of such
employment for any reason whatsoever, Xxxxx will not, within the United States
and its territories and possessions, or in any other geographical area in which
Medscape has an office or a client (the "Medscape Territory"), directly or
indirectly, on Xxxxx'x own behalf or on behalf of anyone else engaged in a
business which is directly competitive with Medscape, without the prior written
consent of Medscape: (i) persuade or attempt to persuade any customer of
Medscape or its affiliates as of the date of the termination of Xxxxx'x
employment, to cease doing business with, or to reduce the amount of business it
does with, Medscape or its affiliates or solicit the business of any of
Medscape's or its affiliates' customers as of the date of the termination of
Xxxxx'x employment hereunder; (ii) render to or for any customer of Medscape as
of the date of the termination of Xxxxx'x employment hereunder any services of
the type rendered by Medscape to its customers unless such services are rendered
as an employee or consultant of Medscape; or (iii) solicit or encourage to leave
the employ of Medscape
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or its affiliates, or to become employed by any person other than Medscape, any
employee of Medscape or its affiliates, or any individual who was an employee of
Medscape or its or affiliates during the one year prior to the termination of
Xxxxx'x employment. Xxxxx further agrees that so long as she shall be in
Medscape's employ and for a period of one year after the termination of such
employment for any reason whatsoever, Xxxxx will not, within the Medscape
Territory, directly or indirectly, on Xxxxx'x own behalf or on behalf of anyone
else engaged in a business which is directly competitive with Medscape, without
the prior written consent of Medscape, employ any employee of Medscape or its
affiliates, or any individual who was an employee of Medscape or its affiliates
during the six months prior to the termination of Xxxxx'x employment.
(b) Xxxxx has carefully considered the nature and extent
of the restrictions upon her and the rights and remedies conferred upon Medscape
under this Agreement, and hereby acknowledges and agrees that the same (i) are
reasonable in time and territory, (ii) are designed to eliminate competition
which otherwise would be unfair to Medscape, (iii) do not stifle the inherent
skill and experience of Xxxxx, (iv) would not operate as a bar to Xxxxx'x sole
means of support, (v) are fully required to protect the legitimate interests of
Medscape and (vi) do not confer a benefit upon Medscape disproportionate to the
detriment to Xxxxx or the benefit otherwise afforded her by this Agreement.
(c) Xxxxx and Medscape acknowledge and agree that the
restrictions and obligations imposed on Xxxxx by virtue of this Paragraph 10
are, in light of the circumstances, fair and reasonable as to type, scope and
period of time, and are reasonably required for the protection of Medscape and
the goodwill associated with the business of Medscape. However, it is the intent
of Xxxxx and Medscape that this Agreement be enforceable and restrict Xxxxx'x
activities only to the extent permitted by applicable law. Therefore, if any
provision of this Paragraph 10 as presently written shall be construed to be
illegal, invalid or unenforceable by a court of competent jurisdiction, said
illegal, invalid or unenforceable provision shall be deemed to be amended and
shall be construed by the court to have the broadest type, scope and duration
permissible under applicable law, and if no validating construction is possible,
shall be severable from the rest of this Agreement, and the validity, legality
or enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
11. Certain Remedies. The parties hereto acknowledge that, in
the event of a breach or a threatened breach by Xxxxx of any of her obligations
under Paragraphs 8 or 10 of this Agreement, Medscape will not have an adequate
remedy at law. Accordingly, in the event of any such breach or threatened breach
by Xxxxx, Medscape shall be entitled to such equitable and injunctive relief as
may be available to restrain Xxxxx and any business, firm, partnership,
individual, corporation or entity
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participating in such breach or threatened breach from the violation of the
provisions hereof. Nothing herein shall be construed as prohibiting Medscape
from pursuing any other remedies available at law or in equity for such breach,
including the recovery of damages.
12. Termination of Employment; Compensation. Xxxxx'x
employment hereunder shall terminate upon her resignation or death and may be
terminated by Medscape at any time for or without Good Cause (as hereinafter
defined) or by reason of Xxxxx'x Disability. In the event that Xxxxx'x
employment is terminated by reason of her death or resignation, or by Medscape
for Good Cause or because of Xxxxx'x Disability, Xxxxx or her estate, as the
case may be, shall be entitled only to her accrued and unpaid Base Salary as of
the date of termination. In the event that Xxxxx'x employment is terminated by
Medscape without Good Cause (and not because of Xxxxx'x Disability) during the
Term hereof, Xxxxx shall be entitled to receive her Base Salary through the
earlier of (a) the end of the Term and (b) nine (9) months from the date of
termination, plus any accrued but unpaid Performance Cash Bonus, if any, through
the date of termination.
For purposes of this Agreement, "Disability" means a
mental or physical condition that renders Xxxxx incapable of performing her
duties and obligations under this Agreement for a period of six consecutive
months, or more than 210 days in any eight month period, in the written opinion
of a competent physician specializing in such condition selected by the Medscape
Board of Directors who has personally examined and evaluated her condition.
Medscape shall have the right to terminate the employment of Xxxxx hereunder at
any time following her Disability.
For purposes of this Agreement, "Good Cause" means gross
misconduct, gross neglect of duties (including by reason of alcohol or drug
dependency), acts involving moral turpitude, conviction of a felony, material
breach by Xxxxx of this Agreement that is not substantially cured within 30
business days after receipt of written notice from Medscape of such breach, or
any act or omission involving fraud, embezzlement or misappropriation of any
property of the Company by Xxxxx.
13. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and no
amendment, waiver or modification hereof shall be valid or binding unless made
in writing and signed by the party against whom enforcement thereof is sought.
This Agreement supersedes all prior agreements, representations and
understandings of the parties hereto relating to the employment of Xxxxx by
Medscape.
14. No Reliance. The parties hereto each represent to the
other that in executing this Agreement each does not rely upon, and has not
relied upon, any
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representation or statement not set forth herein with regard to the subject
matter, basis or effect of this Agreement or otherwise.
15. Notices. All notices, consents, waivers or other
communications required or permitted to be given or made pursuant to any of the
provisions of this Agreement (collectively, "Notices") shall be in writing and
shall be deemed to have been duly given or made for all purposes if sent by
certified or registered mail, return receipt requested, and postage prepaid,
hand delivered, sent by confirmed telecopy or other confirmed electronic means
or by express mail service or other verified overnight courier service to the
party at its or her address as it appears on the first page of this Agreement,
or at such other address as either party may specify by Notice give to the other
party in accordance with this Paragraph 15 and with copies to the parties
indicated below. A Notice shall only be deemed given or received on a business
day (any day other than Saturday, Sunday or Federal legal holiday). The date any
such Notice shall be deemed given and received is: (i) if hand delivered, on the
date of hand delivery; (ii) if sent by registered or certified mail, three (3)
business days following the posting of the mail; (iii) if sent by express mail
or other verified overnight courier service, the date received; or (iv) if sent
by confirmed telecopy or other confirmed electronic means, the date when receipt
is confirmed by the same means (The telecopy number for Medscape is: (212)
760-3140. The telecopy number for Xxxxx is: ________________).
If a notice is being provided to Xxxxx, a copy shall also be provided to:
Xxxxxxx X. Xxxxxx, Esq.
Putney, Twombly, Hall & Hirson
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If a notice is being provided to Medscape, a copy shall also be provided to:
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
16. No Assignment. Neither this Agreement nor the right to
receive any payments hereunder may be assigned by Xxxxx, and any attempted
assignment shall be null and void and of no effect. This Agreement shall be
binding upon Xxxxx, her heirs, executors and administrators and upon Medscape,
its successors and assigns.
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17. No Modification. No termination, alteration, modification
or variation or waiver of this Agreement or any of the provisions hereof shall
be effective unless in writing executed by the parties hereto, or in the case of
a waiver, by the party or parties waiving compliance. No waiver of any default
or breach of this Agreement shall be deemed a continuing waiver or a waiver of
any other breach or default. No course of dealing nor any delay on the part of
either party in exercising any rights hereunder shall operate as a waiver of any
such rights.
18. Governing Law. This Agreement shall be governed,
interpreted and construed according to the internal laws of the State of New
York without regard to conflict of laws principles. Any legal action or
proceeding with respect to this Agreement or any transaction related hereto
shall be brought in the courts of the State of New York or of the United States
District Court for the Southern District of New York, and, by the execution and
delivery of this Agreement, each of the parties hereto hereby consents for
itself and in respect of its property to the exclusive jurisdiction of the
aforesaid courts and agrees that service of process in any legal action or
proceeding with respect to this Agreement or any transaction related hereto may
be made on such party by delivery of such process by certified mail, return
receipt requested, to such party at its address set forth in the heading hereof
with the same effect as if such process was personally served on such party
within the State of New York. Each of the parties hereto hereby irrevocably
waives, to the extent permitted by applicable law, any objection, including, but
not limited to, any objection to the laying of venue or based on the ground of
forum non conveniens, which it may now or hereafter have to the bringing of any
action or proceeding in such jurisdictions in respect of this Agreement or any
transaction related hereto. Nothing contained herein shall affect the right of
any party hereto to serve process in any other manner permitted by law.
19. Severability. Should any clause, paragraph or part of this
Agreement be held or declared to be void or illegal for any reason by a court of
competent jurisdiction, such provision shall be ineffective, but all other
clauses, paragraphs or parts of this Agreement which can be effected without
such illegal clause, paragraph or part shall nevertheless remain in full force
and effect.
20. Headings. The headings and captions contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
21. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by Medscape hereunder to Xxxxx shall be subject to
withholding of such amounts relating to taxes as Medscape may reasonably
determine it should withhold pursuant to any applicable law or regulation.
22. Survival. The provisions of Paragraphs 8, 9, 10, 11, 12,
13, 14, 18
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and 19 and of this Paragraph 22 shall survive the termination or expiration of
this Agreement.
23. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original but all of which
shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
MEDSCAPE, INC.
By: /s/ Xxxx X. Xxxxxx /s/ Xxx Xxxxx
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Xxxx X. Xxxxxx Xxx Xxxxx
President and Chief Executive Officer
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