EMPLOYMENT AGREEMENT
Exhibit 10.1
This EMPLOYMENT AGREEMENT is made and entered into as of this 7th day of January
2011, by and between MedAssets Services, LLC., a Delaware corporation (the “Company”), and
Xxxxxxx Xxxxxx (“Employee”).
W I T N E S S E T H :
WHEREAS, the Company desires to employ Employee and to enter into an agreement embodying the
terms of such employment (this “Agreement”) and Employee desires to enter into this
Agreement and to accept such employment, subject to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are mutually
acknowledged, the Company and Employee hereby agree as follows:
Section 1. Definitions.
(a) “Accrued Obligations” shall mean (i) all accrued but unpaid Base Salary through
the date of termination of Employee’s employment hereunder; (ii) any unpaid or unreimbursed
expenses incurred in accordance with Section 7 hereof, to the extent incurred prior to termination
of employment; (iii) any benefits provided under the Company’s employee benefit plans upon a
termination of employment, in accordance with the terms therein, including rights to equity in the
Company pursuant to the Company’s equity plans or grant documents thereunder if applicable; (iv)
rights to indemnification by virtue of Employee’s position as an officer or director of the Company
Group or under any indemnification agreement between Employee and the Company, and the benefits
under any directors’ and officers’ liability insurance policy maintained by the Company Group, in
accordance with its terms thereof; and (v) any additional payments required to be made under
Section 9 below, to the extent not previously paid.
(b) “Affiliate” shall mean, as to any Person, any other Person that controls, is
controlled by, or is under common control with, such Person.
(c) “Annual Bonus” shall have the meaning set forth in Section 4(b) below.
(d) “Base Salary” shall mean the salary, and any increase thereof, provided for in
Section 4(a) below.
(e) “Board” shall mean the Board of Directors of the Company.
(f) “Cause” shall mean (i) Employee’s act(s) of gross negligence or willful misconduct
in the course of Employee’s employment hereunder that is or could reasonably be expected to be
materially injurious to the Company or any other member of the Company Group,
(ii) willful failure or refusal by Employee to perform in any material respect his duties or
responsibilities, (iii) misappropriation by Employee of any assets or business opportunities of the
Company or any other member of the Company Group, (iv) embezzlement or fraud committed by Employee,
or at his direction, (v) Employee’s conviction by a court of competent jurisdiction of, or pleading
“guilty” or “ no contest” to, a felony or any other criminal charge (other than minor traffic
violations) that has, or could be reasonably expected to have, an adverse impact on the performance
of Employee’s duties to the Company or any other member of the Company Group or otherwise result in
material injury to the reputation or business of the Company or any other member of the Company
Group, or (vi) Employee’s breach of any material provision of this Agreement. For purposes of this
definition of Cause, no act or failure to act on the part of Employee shall be considered “willful”
if it is done, or omitted to be done, by Employee in good faith and with a good faith belief that
Employee’s act or omission was in the best interests of the Company.
(g) “Change in Control” means:
(i) a change in ownership or control of the Company effected through a transaction or
series of transactions (other than an offering of Stock to the general public through a
registration statement filed with the Securities and Exchange Commission) whereby any
“person” or related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act), other any other member of the Company Group or an employee
benefit plan maintained by the Company or any other member of the Company Group, directly or
indirectly acquires “beneficial ownership” (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the
total combined voting power of the Company’s securities outstanding immediately after such
acquisition;
(ii) the date upon which individuals who, as of the Commencement Date, constitute the
Board (the “Incumbent Board”), cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board; or
(iii) the sale or disposition, in one or a series of related transactions, of all or
substantially all of the assets of the Company to any “person” or “group” (as such terms are
defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company’s
Affiliates.
(h) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(i) “Commencement Date” shall mean April 1, 2011.
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(j) “Company” shall have the meaning set forth in the preamble hereto.
(k) “Company Group” shall mean the Company together with any direct or indirect parent
or subsidiary of the Company.
(l) “Competitive Activities” shall mean any business activities in which the Company
or any other member of the Company Group engage (or have committed plans to engage) during the Term
of Employment, or, following termination of Employee’s employment hereunder, was engaged in
business (or had committed plans to engage) at the time of such termination of employment.
(m) “Confidential Information” shall mean confidential or proprietary trade secrets,
client lists, client identities and information, information regarding service providers,
investment methodologies, marketing data or plans, sales plans, management organization
information, operating policies or manuals, business plans or operations or techniques, financial
records or data, or other financial, commercial, business or technical information (i) relating to
the Company or any other member of the Company Group, or (ii) that the Company or any other member
of the Company Group may receive belonging to suppliers, customers or others who do business with
the Company or any other member of the Company Group, but shall exclude any information that is in
the public domain or hereafter enters the public domain, in each case without the breach by
Employee Section 10(a) below.
(n) “Developments” shall have the meaning set forth in Section 10(d) below.
(o) “Disability” shall mean any physical or mental disability or infirmity that
prevents the performance of Employee’s duties for a period of (i) one hundred twenty (120)
consecutive days or (ii) one hundred eighty (180) non-consecutive days during any twelve (12) month
period. Any question as to the existence, extent or potentiality of Employee’s Disability upon
which Employee and the Company cannot agree shall be determined by a qualified, independent
physician selected by the Company and approved by Employee (which approval shall not be
unreasonably withheld). The determination of any such physician shall be final and conclusive for
all purposes of this Agreement.
(p) “Employee” shall have the meaning set forth in the preamble hereto.
(q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(r) “Excise Tax” shall mean any tax imposed under Section 4999 of the Code or any
similar tax that may hereafter be imposed.
(s) “Good Reason” shall mean, without Employee’s written consent, (i) a material
diminution in Employee’s employment duties, responsibilities or authority, or the assignment to
Employee of duties that are materially inconsistent with his position; (ii) any reduction in Base
Salary or target Annual Bonus opportunity; (iii) the relocation of Employee’s principal place of
employment (as provided in Section 3(c) hereof) more than fifty (50) miles from its current
location; or (iv) any breach by the Company of any material provision of this Agreement.
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(t) “Interfering Activities” shall mean (i) encouraging, soliciting, or inducing, or
in any manner attempting to encourage, solicit, or induce, any individual employed by, or
individual or entity providing consulting services to, the Company or any other member of the
Company Group to terminate such employment or consulting services; provided, that the foregoing
shall not be violated by general advertising not targeted at employees or consultants of the
Company or any other member of the Company Group; (ii) hiring any individual who was employed by
the Company or any other member of the Company Group within the six (6) month period prior to the
date of such hiring; or (iii) encouraging, soliciting or inducing, or in any manner attempting to
encourage, solicit or induce any customer, supplier, licensee or other business relation of the
Company or any other member of the Company Group to cease doing business with or materially reduce
the amount of business conducted with the Company or any other member of the Company Group, or in
any way interfere with the relationship between any such customer, supplier, licensee or business
relation and the Company or any other member of the Company Group.
(u) “Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust (charitable or non-charitable),
unincorporated organization or other form of business entity.
(v) “Restricted Area” shall mean any State of the United States of America or any
other jurisdiction in which the Company or any other member of the Company Group engage (or have
committed plans to engage) in business during the Term of Employment, or, following termination of
Employee’s employment, were engaged (or had committed plans to engage) in business at the time of
such termination of employment.
(w) “Restricted Period” shall mean the period commencing on the Commencement Date and
ending on the twenty-four month anniversary of Employee’s termination of employment hereunder for
any reason.
(x) “Severance Multiplier” shall mean, with respect to any termination of Employee’s
employment hereunder by the Company without Cause or by Employee with Good Reason, 1;
provided, however, that in the event such termination occurs within the two (2)
year period following a Change in Control, the Severance Multiplier shall instead equal 2.
(y) “Severance Term” shall mean, with respect to any termination of Employee’s
employment hereunder by the Company without Cause or by Employee with Good Reason, the period
commencing on the date of such termination and extending through a number of months thereafter
determined by multiplying (x) the Severance Multiplier by (y) twelve (12) months.
(z) “Term of Employment” shall have the meaning ascribed to such term in Section 2
below.
Section 2. Acceptance and Term of Employment.
The Company agrees to employ Employee and Employee agrees to serve the Company on the terms
and conditions set forth herein. Subject to earlier termination pursuant to Section 8 hereof, the
term of employment shall commence on the Commencement Date and shall
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continue until the second anniversary of the Commencement Date (the “Initial Term”),
and shall automatically extend for additional one (1) year terms thereafter (each, a “Renewal
Term” and, together with the Initial Term, the “Term of Employment”), unless either the
Employee or the Company provides written notice (a “Notice of Non-Extension”) to the other
party of its intention not to extend the agreement at least twelve (12) months prior to the
expiration of the Initial Term or the Renewal Term, as applicable.
Section 3. Position, Duties and Responsibilities; Place of Performance.
(a) During the Term of Employment, Employee shall be employed and serve as the Executive Vice
President and Chief Financial Officer of the Company (together with such other position or
positions consistent with Employee’s title as the Board shall specify from time to time) and shall
have such duties typically associated with such title. Subject to the foregoing, Employee also
agrees to serve as an officer and/or director of the Company or any parent or subsidiary of the
Company, as specified by the Board, in each case without additional compensation. Employee’s sole
remedy for any alteration of the employment arrangement (including compensation terms) is set forth
in Section 8 of this Agreement.
(b) Employee shall devote his full business time, attention, skill and best efforts to the
performance of his duties under this Agreement and shall not engage in any other business or
occupation during the Term of Employment, including, without limitation, any activity that (x)
conflicts with the interests of the Company or its subsidiaries, (y) interferes with the proper and
efficient performance of his duties for the Company, or (z) interferes with the exercise of his
judgment in the Company’s best interests. Notwithstanding the foregoing, nothing herein shall
preclude Employee from (i) serving, with the prior written consent of the Board, as a member of the
board of directors or advisory boards (or their equivalents in the case of a non-corporate entity)
of non-competing businesses and charitable organizations, (ii) engaging in charitable activities
and community affairs, and (iii) managing his personal investments and affairs; provided,
however, that the activities set out in clauses (i), (ii) and (iii) shall be limited by
Employee so as not to materially interfere, individually or in the aggregate, with the performance
of his duties and responsibilities hereunder.
(c) Employee’s principal place of employment shall be at the Company’s corporate headquarters
in Alpharetta, Georgia, although Employee understands and agrees that he may be required to travel
from time to time in the connection with his performance of duties hereunder.
Section 4. Compensation. During the Term of Employment, Employee shall be entitled to the
following compensation:
(a) Base Salary. Employee shall be paid an annualized Base Salary, payable in
accordance with the regular payroll practices of the Company, of not less than $350,000 subject to
increase, if any, as may be approved in writing by the Chief Executive Officer of the Company or
the Compensation, Governance and Nominating Committee of the Board of Directors (the
“Compensation Committee”).
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(b) Annual Bonus. Employee shall be eligible to participate in an annual incentive
bonus plan established by the Board (or committee thereof) in respect of each fiscal year during
the Term of Employment (the “Annual Bonus”), with a target Annual Bonus amount for each
fiscal year of 40% of Base Salary, subject to change, if any, as may be approved in writing by the
Chief Executive Officer of the Company or the Compensation Committee.
Section 5. Employee Benefits.
During the Term of Employment, Employee shall be entitled to participate in health, insurance,
retirement and other perquisites and benefits generally provided to other senior executives of the
Company that are made available from time to time. Employee shall also be entitled to the same
number of holidays, vacation and sick days as are generally allowed to senior executives of the
Company in accordance with Company policies in effect from time to time.
Section 6. “Key-Man” Insurance.
At any time during the Term of Employment, the Company shall have the right to insure the life
of Employee for the sole benefit of the Company, in such amounts, and with such terms, as it may
determine. All premiums payable thereon shall be the obligation of the Company. Employee shall
have no interest in any such policy, but agrees to reasonably cooperate with the Company in taking
out such insurance by submitting to physical examinations, supplying all information reasonably
required by the insurance company, and executing all necessary documents, provided that no
financial obligation or liability is imposed on Employee by any such documents.
Section 7. Reimbursement of Business Expenses.
Employee is authorized to incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement and the Company shall promptly reimburse him for all such
reasonable business expenses incurred in connection with carrying out the business of the Company,
subject to documentation in accordance with the Company’s policy, as in effect from time to time.
Section 8. Termination of Employment.
(a) General. The Term of Employment shall terminate upon the earliest to occur of (i)
Employee’s death, (ii) a termination by reason of a Disability, (iii) a termination by the Company
with or without Cause, (iv) a termination by Employee with or without Good Reason, or (v)
expiration of the Term of Employment in accordance with Section 2 above. Upon any termination of
Employee’s employment for any reason, except as may otherwise be requested by the Company in
writing and agreed upon in writing by Employee, Employee shall resign from any and all
directorships, committee memberships or any other positions Employee holds with the Company or any
other member of the Company Group. Notwithstanding anything herein to the contrary, the payment
(or commencement of a series of payments) hereunder of any nonqualified deferred compensation
(within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed
until such time as Employee has also undergone a “separation from service” as defined in Treas.
Reg. 1.409A-1(h), at which time
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such nonqualified deferred compensation (calculated as of the date of Employee’s termination
of employment hereunder) shall be paid (or commence to be paid) to Employee on the schedule sett
forth in this Section 8 as if Employee had undergone such termination of employment (under the same
circumstances) on the date of his ultimate “separation from service.”
(b) Termination due to Death or Disability. Employee’s employment shall terminate
automatically upon his death. The Company may terminate Employee’s employment immediately upon the
occurrence of a Disability, such termination to be effective upon Employee’s receipt of written
notice of such termination. In the event Employee’s employment is terminated due to his death or
Disability, Employee or his estate or his beneficiaries, as the case may be, shall be entitled to:
(i) the Accrued Obligations;
(ii) any unpaid Annual Bonus in respect to any completed fiscal year which has ended
prior to the date of such termination, such amount to be paid at the same time it would
otherwise be paid to Employee had no such termination occurred, but in no event later than
two and one-half months following the end of the fiscal year to which the Annual Bonus
relates; and
(iii) a pro rata Annual Bonus (determined using the target Annual Bonus if such
termination occurs during the fiscal year in which the Commencement Date falls, and using
the Annual Bonus paid or payable for the immediately prior fiscal year for terminations
after the fiscal year in which the Commencement Date falls) based on the number of days
elapsed from the commencement of such fiscal year through and including the date of such
termination, such amount to be paid within five (5) business days of such termination.
Except as set forth in this Section 8(b), following Employee’s termination by reason of his death
or Disability, Employee shall have no further rights to any compensation or any other benefits
under this Agreement.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take effect unless the provisions of this
subsection (i) are complied with. Employee shall be given not less than thirty (30) days
written notice by the Board of the intention to terminate his employment for Cause, such
notice to state in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based. Employee shall
have thirty (30) days after the date that such written notice has been given to Employee in
which to cure such act or acts or failure or failures to act, to the extent such cure is
possible. If he fails to cure such act or acts or failure or failures to act, the
termination shall be effective on the date immediately following the expiration of the
thirty (30) day notice period. If cure is not possible, as determined by the Board in its
sole discretion, the termination shall be effective on the date of receipt of such notice by
Employee. During any cure period provided hereunder, the Board may, in its sole and
absolute discretion, prohibit Employee from entering the premises of the Company (or
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any subsidiary thereof) or otherwise performing his duties hereunder, and any such
prohibition shall in no event constitute an event pursuant to which Employee may terminate
employment with Good Reason; provided, however, that if cure is possible,
and Employee can reasonably demonstrate to the Board that he desires to enter the premises
of the Company (or a subsidiary thereof) or to otherwise perform his duties hereunder solely
to attempt to cure the act or acts or failure or failures to act that constitute the grounds
on which the proposed termination for Cause is based, Employee shall be permitted to enter
the premises of the Company (or a subsidiary thereof) or otherwise to perform his duties
hereunder solely for the purposes of curing such act or acts or failure or failures to act.
(ii) In the event the Company terminates Employee’s employment for Cause, Employee
shall be entitled to:
| (A) | the Accrued Obligations; and | ||
| (B) | any unpaid Annual Bonus in respect to any completed fiscal year which has ended prior to the date of such termination, such amount to be paid at the same time it would otherwise be paid to Employee had no such termination occurred, but in no event later than two and one-half months following the end of the fiscal year to which the Annual Bonus relates. |
Following such termination of Employee’s employment for Cause, except as set forth in this Section
8(c)(ii), Employee shall have no further rights to any compensation or any other benefits under
this Agreement.
(d) Termination by the Company without Cause. The Company may terminate Employee’s
employment at any time without Cause, effective upon Employee’s receipt of written notice of such
termination. In the event Employee’s employment is terminated by the Company without Cause (other
than due to death or Disability), Employee shall be entitled to:
(i) the Accrued Obligations;
(ii) any unpaid Annual Bonus in respect to any completed fiscal year which has ended
prior to the date of such termination, such amount to be paid at the same time it would
otherwise be paid to Employee had no such termination occurred, but in no event later than
two and one-half months following the end of the fiscal year to which the Annual Bonus
relates;
(iii) an amount equal to the Severance Multiplier multiplied by the sum of Employee’s
Base Salary plus target Annual Bonus amount for the fiscal year during which such
termination occurs, such amount to be payable in substantially equal installments during the
Severance Term, in accordance with the Company’s regular payroll practices;
(iv) an additional amount equal to $400 per week for the Severance Term; and
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(v) notwithstanding any provision of any equity plan of the Company or applicable
equity grant agreement to the contrary, if such termination occurs on or within the two (2)
year period following a Change in Control, all equity awards that have not otherwise vested
shall vest, and applicable restrictions shall lapse, immediately upon such termination.
For purposes of this subsection (d) only, the delivery of a Notice of Non-Extension by the Company
to Employee during the two (2) year period following a Change in Control shall be deemed to
constitute a termination without Cause, such that upon receipt of such Notice of Non-Extension by
Employee, Employee shall be deemed to have waived the required notice period set forth in Section 2
above, and Employee’s employment hereunder shall be deemed to heave been terminated without Cause
as of the date of receipt of such notice.
Notwithstanding the foregoing, the payments and benefits described in subsections (ii) through (iv)
above shall immediately cease, and the Company shall have no further obligations to Employee with
respect thereto, in the event that Employee breaches any provision of Section 10 hereof. Following
such termination of Employee’s employment by the Company without Cause, except as set forth in this
Section 8(d), Employee shall have no further rights to any compensation or any other benefits under
this Agreement.
(e) Termination by Employee with Good Reason. Employee may terminate his employment
with Good Reason by providing the Company thirty (30) days’ written notice setting forth with
reasonable specificity the event that constitutes Good Reason, which written notice, to be
effective, must be provided to the Company within sixty (60) days of the occurrence of such event.
During such thirty (30) day notice period, the Company shall have a cure right (if curable), and if
not cured within such period, Employee’s termination will be effective upon the date immediately
following the expiration of the thirty (30) day notice period, and Employee shall be entitled to
the same payments and benefits as provided in Section 8(d) above for a termination without Cause,
it being agreed that Employee’s right to any such payments and benefits shall be subject to the
same terms and conditions as described in Section 8(d) above. Following such termination of
Employee’s employment by Employee with Good Reason, except as set forth in this Section 8(e),
Employee shall have no further rights to any compensation or any other benefits under this
Agreement.
(f) Termination by Employee without Good Reason. Employee may terminate his
employment without Good Reason by providing the Company thirty (30) days’ written notice of such
termination. In the event of a termination of employment by Employee without Good Reason, Employee
shall be entitled to the same payments and benefits as provided in Section 8(c) above for a
termination for Cause. In the event of termination of Employee’s employment under this Section
8(f), the Company may, in its sole and absolute discretion, by written notice accelerate such date
of termination and still have it treated as a termination without Good Reason. Following such
termination of Employee’s employment by Employee without Good Reason, except as set forth in this
Section 8(f), Employee shall have no further rights to any compensation or any other benefits under
this Agreement.
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(g) Expiration of Term of Employment. In the event that the Term of Employment
expires following delivery by either party hereto to the other of Notice of Non-Extension, Employee
shall be entitled to:
(i) the Accrued Obligations; and
(ii) any unpaid Annual Bonus in respect to any completed fiscal year which has ended
prior to the date of such termination, such amount to be paid at the same time it would
otherwise be paid to Employee had no such termination occurred, but in no event later than
two and one-half months following the end of the fiscal year to which the Annual Bonus
relates.
Following such termination of Employee’s employment by Employee without Good Reason, except as set
forth in this Section 8(g), Employee shall have no further rights to any compensation or any other
benefits under this Agreement.
(h) Release. Notwithstanding any provision herein to the contrary, payment of any
amount or provision of any benefit pursuant to subsection (b), (d) or (e) of this Section 8 (other
than the Accrued Obligations) (collectively the “Severance Benefits”) shall be conditioned upon
Employee’s execution, delivery to the Company, and non-revocation of a release of claims in favor
of the Company and its affiliates and related parties in such form as is reasonably required by the
Company (the “Release of Claims”) (and the expiration of any revocation period contained in such
Release of Claims) within sixty (60) days following the date of Employee’s termination of
employment hereunder. If Employee fails to execute the Release of Claims in such a timely manner
so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or
timely revokes his acceptance of such release following its execution, then Employee shall not be
entitled to any of the Severance Benefits. Further, to the extent that any of the Severance
Benefits constitutes “nonqualified deferred compensation” for purposes of Section 409A of the Code,
any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the
sixtieth (60th) day following the date of Employee’s termination of employment
hereunder, but for the condition on executing the Release of Claims as set forth herein, shall not
be made until the first regularly scheduled payroll date following such sixtieth (60th)
day, after which any remaining Severance Benefits shall thereafter be provided to Employee
according to the applicable schedule set forth herein. For the avoidance of doubt, in the event of
a termination due to Employee’s death or Disability, Employee’s obligations herein to execute and
not revoke the Release of Claims may be satisfied on his behalf and by his estate or a person
having legal power of attorney over his affairs.
Section 9. Additional Payments.
(a) Payments. In the event that any payment or benefit made or provided to Employee
by the Company, any other member of the Company Group, any Person who acquires ownership or
effective control of the Company or ownership of a substantial portion of the Company assets
(within the meaning of Section 280G of Code) or any Affiliate of such Person (collectively, the
“Aggregate Payment”) becomes subject to the Excise Tax, the Company shall pay to Employee
an additional amount (the “Excise Tax Payment “) such that the net amount retained by
Director with respect to the Aggregate Payment, after deduction of any Excise Tax
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on the Aggregate Payment and any Federal, state and local income tax and Excise Tax on the
Excise Tax Payment (and any interest and penalties thereon), but before deduction for any Federal,
state or local income or employment tax withholding on such Aggregate Payment, shall be equal to
the amount of the Aggregate Payment. The Excise Tax Payment shall be paid no later than the last
day of the taxable year following the taxable year in which the Excise Tax is remitted to the
applicable taxing authority.
(b) Determinations. The determination of whether the Aggregate Payment will be
subject to the Excise Tax and, if so, the amount to be paid to Employee and the time of payment
pursuant to this shall be made by the by the Company’s accounting firm (the “Accounting
Firm”), subject to a different determination by the Internal Revenue Service. All fees and
expenses of the Accounting Firm shall be borne solely by the Company.
(c) Assumptions. For purposes of determining the amount of any additional payments
hereunder, Employee shall be deemed to pay:
(i) Federal income taxes at the highest applicable marginal rate of Federal income
taxation for the calendar year in which such payments are to be made, and
(ii) Any applicable state and local income taxes at the highest applicable marginal
rate of taxation for the calendar year in which such payments are to be made, net of the
maximum reduction in Federal incomes taxes which could be obtained from the deduction of
such state or local taxes if paid in such year.
(d) Adjustments. Adjustments shall be made as necessary in accordance with any
determination of the Internal Revenue Service.
Section 10. Restrictive Covenants. Employee acknowledges and agrees that (A) the agreements
and covenants contained in this Section 10 are (i) reasonable and valid in geographical and
temporal scope and in all other respects, and (ii) essential to protect the value of the Company’s
business and assets, and (B) by his employment with the Company, Employee will obtain knowledge,
contacts, know-how, training and experience and there is a substantial probability that such
knowledge, know-how, contacts, training and experience could be used to the substantial advantage
of a competitor of the Company and to the Company’s substantial detriment. For purposes of this
Section 10, references to the Company shall be deemed to include its subsidiaries.
(a) Confidential Information. At any time during and after the end of the Term of
Employment, without the prior written consent of the Board, except to the extent required by an
order of a court having jurisdiction or under subpoena from an appropriate government agency, in
which event, Employee shall, to the extent legally permitted, consult with the Board prior to
responding to any such order or subpoena, and except as he in good faith believes necessary or
desirable in the performance of his duties hereunder, Employee shall not disclose to or use for the
benefit of any third party any Confidential Information.
(b) Non-Competition. Employee covenants and agrees that during the Restricted Period,
Employee shall not, directly or indirectly, individually or jointly, own any
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interest in, operate, join, control or participate as a partner, director, principal,
officer, or agent of, enter into the employment of, act as a consultant to, or perform any services
for any Person (other than the Company or any other member of the Company Group), that engages in
any Competitive Activities within the Restricted Area. Notwithstanding anything herein to the
contrary, this Section 10(b) shall not prevent Employee from acquiring as an investment securities
representing not more than three percent (3%) of the outstanding voting securities of any
publicly-held corporation or from being a passive investor in any mutual fund, hedge fund, private
equity fund or similar pooled account so long as Employee’s interest therein is less than three
percent (3%) and he has no role in selecting or managing investments thereof.
(c) Non-Interference. During the Restricted Period, Employee shall not, directly or
indirectly, for his own account or for the account of any other Person, engage in Interfering
Activities.
(d) Return of Property. In the event of the termination of Employee’s employment for
any reason, Employee shall deliver to the Company all of (i) the property of the Company, and (ii)
the documents and data of any nature and in whatever medium of the Company, and he shall not take
with him any such property, documents or data or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information.
(e) Works for Hire. Except as may be set forth on Exhibit A, Employee agrees that the
Company shall own all right, title and interest throughout the world in and to any and all
inventions, original works of authorship, developments, concepts, know-how, improvements or trade
secrets, whether or not patentable or registrable under copyright or similar laws, which Employee
may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or
developed or reduced to practice during the Term of Employment, whether or not during regular
working hours, provided they either (i) relate at the time of conception or development to the
actual or demonstrably proposed business or research and development activities of any member of
the Company Group; (ii) result from or relate to any work performed for the Company or any member
of the Company Group; or (iii) are developed through the use of Confidential Information and/or
Company resources or in consultation with any personnel of the Company or any other member of the
Company Group (collectively referred to as “Developments”). Employee hereby assigns all
right, title and interest in and to any and all of these Developments to the Company. Employee
agrees to assist the Company, at the Company’s expense, to further evidence, record and perfect
such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be
so owned or assigned. Employee hereby irrevocably designates and appoints the Company and its
agents as attorneys-in-fact to act for and on Employee’s behalf to execute and file any document
and to do all other lawfully permitted acts to further the purposes of the foregoing with the same
legal force and effect as if executed by Employee. In addition, and not in contravention of any of
the foregoing, Employee acknowledges that all original works of authorship which are made by him
(solely or jointly with others) within the scope of employment and which are protectable by
copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17
USC Sec. 101). To the extent allowed by law, this includes all rights of paternity, integrity,
disclosure and withdrawal and any other rights that may be known as or referred to as “moral
rights.” To the extent Employee retains any such moral rights under applicable law, Employee
hereby waives such moral rights and consents to any action consistent with the terms of this
Agreement with respect
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to such moral rights, in each case, to the full extent of such applicable law. Employee will
confirm any such waivers and consents from time to time as requested by the Company.
(f) Blue Pencil. If any court of competent jurisdiction shall at any time deem the
duration or the geographic scope of any of the provisions of this Section 10 unenforceable, the
other provisions of this Section 10 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by
law under the circumstances, and the parties hereto agree that such court shall reduce the time
period and/or geographic scope to permissible duration or size.
Section 11. Breach of Restrictive Covenants.
Without limiting the remedies available to the Company, Employee acknowledges that a breach of
any of the covenants contained in Section 10 hereof may result in material irreparable injury to
the Company Group for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a breach or threat
thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction, without the necessity of proving irreparable harm or injury as a result of
such breach or threatened breach of Section 10 hereof, restraining Employee from engaging in
activities prohibited by Section 10 hereof or such other relief as may be required specifically to
enforce any of the covenants in Section 10 hereof. Notwithstanding any other provision to the
contrary, the Restricted Period shall be tolled during any period of violation of any of the
covenants in Section 10 (b) or (c) hereof and during any other period required for litigation
during which the Company seeks to enforce such covenants against Employee if it is ultimately
determined that Employee was in breach of such covenants.
Section 12. Representations and Warranties of Employee.
Employee represents and warrants to the Company that:
(a) Employee’s employment will not conflict with or result in his breach of any agreement to
which he is a party or otherwise may be bound;
(b) Employee has not violated, and in connection with his employment with the Company will not
violate, any non-solicitation, non-competition or other similar covenant or agreement of a prior
employer by which he is or may be bound; and
(c) In connection with Employee’s employment with the Company, he will not use any
confidential or proprietary information that he may have obtained in connection with employment
with any prior employer.
Section 13. Indemnification
Subject to the terms and conditions of the Articles of Association and By-Laws of the Company
(in each case, as in effect from time to time), the Company agrees to indemnify and hold Employee
harmless against third-party claims to the fullest extent permitted by the laws of the State of
Delaware, as in effect at the time of the subject act or omission. In connection therewith,
Employee shall be entitled to the protection of any insurance policies which the
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Company elects to maintain generally for the benefit of the Company’s directors and officers,
against all costs, charges and expenses whatsoever incurred or sustained by Employee in connection
with any action, suit or proceeding to which he may be made a party by reason of his being or
having been a director, officer or employee of the Company. This provision shall survive any
termination of Employee’s employment hereunder.
Section 14. Taxes.
The Company may withhold from any payments made under this Agreement all applicable taxes,
including but not limited to income, employment and social insurance taxes, as shall be required by
law. Employee acknowledges and represents that the Company has not provided any tax advice to him
in connection with this Agreement and that he has been advised by the Company to seek tax advice
from his own tax advisors regarding this Agreement and payments that may be made to him pursuant to
this Agreement, including specifically, the application of the provisions of Section 409A of the
Code to such payments.
Section 15. Mitigation; Set Off.
The Company’s obligation to pay Employee the amounts provided and to make the arrangements
provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by
Employee to the Company or its Affiliates. Employee shall not be required to mitigate the amount
of any payment provided for pursuant to this Agreement by seeking other employment or otherwise and
the amount of any payment provided for pursuant to this Agreement shall not be reduced by any
compensation earned as a result of Employee’s other employment or otherwise.
Section 16. Additional Section 409A Provisions.
Notwithstanding any provision in this Agreement to the contrary:
(a) Any payment otherwise required to be made hereunder to the Employee at any date as a
result of the termination of Employee’s employment shall be delayed for such period of time as may
be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”).
On the first business day following the expiration o the Delay Period, Employee 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, and any remaining payments not so delayed shall continue to be paid
pursuant to the payment schedule set forth herein;
(b) Each payment in a series of payments hereunder shall be deemed to be a separate payment
for purposes of Section 409A of the Code; and
(c) To the extent that any right to reimbursement of expenses or payment of any benefit
in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of
Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later
than the last day of the taxable year following the taxable year in which such expense was incurred
by Employee, (ii) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for
reimbursement or in-kind benefits provided during any taxable year shall not affect
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the expenses eligible for reimbursement or in-kind benefits to be provided in any other
taxable year; provided, that the foregoing clause shall not be violated with regard to expenses
reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect.
Section 17. Successors and Assigns; No Third-Party Beneficiaries.
(a) The Company. This Agreement shall inure to the benefit of and be enforceable by,
and may be assigned by the Company to, any purchaser of all or substantially all of the Company’s
business or assets or any successor to the Company (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require in a writing delivered to Employee
that any such purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform
it if no such purchase, succession or assignment had taken place. The Company may make no other
assignment of this Agreement or its obligations hereunder.
(b) Employee. Employee’s rights and obligations under this Agreement shall not be
transferable by Employee by assignment or otherwise, without the prior written consent of the
Company; provided, however, that if Employee shall die, all amounts then payable to
Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s
devisee, legatee or other designee or, if there be no such designee, to Employee’s estate.
(c) No Third-Party Beneficiaries. Except as otherwise set forth in Section 8(b) or
Section 17(b) hereof, nothing expressed or referred to in this Agreement will be construed to give
any Person other than the Company and Employee any legal or equitable right, remedy or claim under
or with respect to this Agreement or any provision of this Agreement.
Section 18. Waiver and Amendments.
Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall
be valid only if made in writing and signed by each of the parties hereto; provided,
however, that any such waiver, alteration, amendment or modification is consented to on the
Company’s behalf by the Board. No waiver by either of the parties hereto of their rights hereunder
shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
Section 19. Severability.
If any covenants or other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction: (a) the remaining
terms and provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term or
provision hereof shall be deemed replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable term or provision
hereof.
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Section 20. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
GEORGIA (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any Georgia state or federal court
sitting in the state of Georgia, and the parties hereto hereby consent to the jurisdiction of such
courts in any such action or proceeding.
Section 21. Notices.
(a) Every notice or other communication relating to this Agreement shall be in writing, and
shall be mailed to or delivered to the party for whom it is intended at such address as may from
time to time be designated by it in a notice mailed or delivered to the other party as herein
provided, provided that, unless and until some other address be so designated, all notices or
communications by Employee to the Company shall be mailed or delivered to the Company at its
principal executive office, and all notices or communications by the Company to Employee may be
given to Employee personally or may be mailed to Employee at Employee’s last known address, as
reflected in the Company’s records.
(b) Any notice so addressed shall be deemed to be given: (i) if delivered by hand, on the
date of such delivery; (ii) if mailed by courier or by overnight mail, on the first business day
following the date of such mailing; and (iii) if mailed by registered or certified mail, on the
third business day after the date of such mailing.
Section 22. Section Headings.
The headings of the sections and subsections of this Agreement are inserted for convenience
only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 23. Entire Agreement.
This Agreement constitutes the entire understanding and agreement of the parties hereto
regarding the employment of Employee. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements between the parties
relating to the subject matter of this Agreement.
Section 24. Survival of Operative Sections.
Upon any termination of Employee’s employment, the provisions of Section 8 through Section 25
of this Agreement (together with any related definitions set forth in Section 1 hereof) shall
survive to the extent necessary to give effect to the provisions thereof.
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Section 25. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. The
execution of this Agreement may be by actual or facsimile signature.
* * *
[Signatures to appear on the following page.]
[Signatures to appear on the following page.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
| MedAssets Services, LLC. |
||||
| /s/ Xxxxxxxx X. Xxxxx | ||||
| By: Xxxxxxxx X. Xxxxx | ||||
| Title: | Executive Vice President, Chief Legal and Administrative Officer |
|||
| EMPLOYEE |
||||
| /s/ Xxxxxxx Xxxxxx | ||||
| Xxxxxxx Xxxxxx | ||||
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