MEDPANEL, INC. EMPLOYMENT AGREEMENT
MEDPANEL,
INC.
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of November __, 2006,
between MEDPANEL, INC., a Delaware corporation (the “Company”), and XXXXXXX
XXXXX (the “Executive”).
WHEREAS,
the parties desire to enter into this Agreement setting forth the terms and
conditions for the employment relationship of the Executive with the
Company.
NOW,
THEREFORE, it is AGREED as follows:
1. Employment.
The
Executive is hereby employed as Chief Executive Officer of the Company for
a
period commencing on the date hereof and ending two years after the date hereof.
As Chief Executive Officer of the Company, the Executive shall handle all day
to
day activities of the Company as customarily performed by persons serving in
such capacities. The Executive agrees to serve the Company faithfully and to
the
best of his ability and to devote his full time, attention, and efforts to
the
business and affairs of the Company during the term of his employment. The
Executive hereby confirms that he is under no contractual commitments
inconsistent with his obligations set forth in this Agreement. The Executive
shall be entitled without prior written consent to hold positions on the Board
of Directors of entities that do not compete with the Company and do not
otherwise restrict the trading and business activities of the Company and its
parent or sister subsidiaries. The Executive has, as of the date of this
Agreement, disclosed to the Board of Directors of the Company the positions
the
Executive currently holds on other Boards of Directors, and the Company has
consented to such positions.
2. Location
of Services.
During
the term of this Agreement, the Executive shall be principally located at the
offices of the Company located in Boston metropolitan area of the Commonwealth
of Massachusetts.
3. Salary.
The
Company shall pay the Executive an annual base salary equal to Two Hundred
Thousand Dollars ($200,000) as compensation for services in calendar year 2007
and an annual base salary equal to Two Hundred Ten Thousand Dollars ($210,000)
as compensation of services in calendar year 2008 (“Base Salary”). The Base
Salary of the Executive shall not be decreased at any time during the term
of
this Agreement from the amount then in effect, unless the Executive otherwise
agrees in writing. Participation in deferred compensation, discretionary bonus,
retirement, and other employee benefit plans and in fringe benefits shall not
reduce the Base Salary. The Base Salary shall be payable to the Executive not
less frequently than monthly.
4. Executive’s
Bonus.
The
Executive shall be entitled to an annual bonus conditioned upon Company
performance as more particularly described below:
(a) For
calendar year 2007, the Executive’s bonus compensation shall be calculated by
application of a weighted percentage against Pre-Bonus EBITDA, Gross Revenue
and
Incremental Revenue Growth above the Benchmark.
(i) Pre-Bonus
EBITDA is defined as the earnings determined in accordance with GAAP before
interest, taxes, depreciation and amortization of the Company during calendar
year 2007;
(ii) Revenue
is defined consistent with the financial statements;
(iii) Revenue
Growth is defined as the increased Revenue above the Benchmark; and
(iv) Benchmark
is defined as Company Revenue of $5,369,400.
The
Executive bonus compensation for calendar year 2007 will be equal to the sum
of
(I) the product of the Pre-Bonus EBITDA figure for such year multiplied by
11.31%; plus (II) the product of the Revenue figure for such year multiplied
by
0.64%, plus (III) the product of the Revenue Growth above the Benchmark
multiplied by 2.05%.
This
calculation reflects the application of weighted multiples of 25% based upon
Pre-Bonus EBITDA; 35% based upon Revenue; and 40% based upon Revenue Growth
above the Benchmark.
(b) For
calendar year 2008, the Executive’s bonus compensation shall be calculated by
application of a weighted percentage against Pre-Bonus EBITDA, Revenue and
Revenue Growth above the actual Revenue generated by Company for calendar year
2007.
The
Executive bonus compensation for calendar year 2008 will be equal to the sum
of
(I) the product of the Pre-Bonus EBITDA figure multiplied by 8.45%; plus (II)
the product of the Revenue figure multiplied by 0.38%; plus (III) the product
of
the Revenue Growth above the actual Revenue generated by Company for calendar
year 2007 multiplied by 1.50%.
This
calculation reflects the application of weighted multiples of 50% based upon
Pre-Bonus EBITDA; 20% based upon Revenue; and 30% based upon Revenue Growth
for
calendar year 2007.
(c) To
the
extent earned, the Pre-Bonus EBITDA and Revenue Growth portions of the
Executive’s bonus will be payable at the end of each calendar year. To the
extent earned, the Revenue portion of the Executive’s bonus will be payable at
the end of each calendar quarter.
(d) For
the
purpose of calculating the Executive’s bonus, the Pre-Bonus EBITDA and Revenue
Growth portions of the calculation shall be either zero or a positive
number.
5. Participation
in the Executive Benefit Plans.
The
Executive is immediately eligible to participate in all of the Company's benefit
plans. Upon the consummation of that certain Agreement and Plan of Merger dated
November 7, 2006 by and among the Company, MCF Corporation, Panel Intelligence,
LLC, MedPanel Acquisition I Corp., and Xxxxxxx X. Xxxxx (the “Merger
Agreement”), the benefit plans will be provided by MCF Corporation. The benefits
include health insurance, employee stock purchase plan, cafeteria plan and
401k
retirement plan.
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6. [Intentionally
left blank.]
7. Parachute
Payments.
Notwithstanding any other provision of this Agreement or of any other agreement,
contract, or understanding heretofore or hereafter entered into by the Executive
with the Company, except an agreement, contract, or understanding hereafter
entered into that expressly modifies or excludes application of this paragraph
(an “Other Agreement”), and notwithstanding any formal or informal employment
agreement or other arrangement for the direct or indirect provision of
compensation to the Executive (including groups or classes of participants
or
beneficiaries of which the Executive is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or
for
the Executive (a “Benefit Arrangement”), if the Executive is a “disqualified
individual,” as defined in Section 280G(c) of the Internal Revenue Code (the
“Code”), any right to receive any payment or other benefit under this Agreement
shall not become exercisable or vested or shall be forfeited to the extent
that
such right to exercise, vesting, payment, or benefit, taking into account all
other rights, payments, or benefits to or for the Executive under this
Agreement, all Other Agreements, and all Benefit Arrangements, would cause
any
payment or benefit to the Executive under this Agreement to be considered a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code as then
in effect (a “Parachute Payment”). In the event that the receipt of any such
right to exercise, vesting, payment, or benefit under this Agreement, in
conjunction with all other rights, payments, or benefits to or for the Executive
under any Other Agreement or any Benefit Arrangement would cause the Executive
to be considered to have received a Parachute Payment under this Agreement,
then
the Executive shall have the right, in the Executive’s sole discretion, to
designate those rights, payments, or benefits under this Agreement, any Other
Agreements, and any Benefit Arrangements that should be reduced or eliminated
so
as to avoid having the payment or benefit to the Executive under this Agreement
be deemed to be a Parachute Payment.
8. Standards.
The
Executive shall perform the Executive’s duties and responsibilities under this
Agreement in accordance with such reasonable standards as may be established
from time to time by the Board of Directors of the Company. The reasonableness
of such standards shall be measured against standards for executive performance
generally prevailing in the Company’s industry.
9. Voluntary
Absences; Vacations.
As a
revenue-generating employee the Executive is not subject to the Company's
vacation policy.
10. Termination
of Employment.
(a) The
Executive may terminate his employment at any time after the 60-day notice
period in Section 11 has elapsed. The Board of Directors of the Company may
terminate the Executive’s employment at any time, subject to payment of the
compensation described below.
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(b) In
the
case of (i) any termination other than “termination for cause” as defined below
(“Termination Without Cause”), or (ii) any termination by the Executive for
“Good Reason” as defined below (“Termination for Good Reason”), the Executive
shall continue to receive his full Base Salary for the remaining term of the
contract, commencing on the date of such termination (the “Severance Period”),
and any bonus that has been earned but not paid before termination of
employment, including the Executive’s Bonus earned through the end of the year
during which the termination occurs, and all other benefits and compensation
that the Executive would have been entitled to under this Agreement in the
absence of termination of employment (collectively, the “Severance Amount”). In
the event of a Termination Without Cause or a Termination for Good Reason,
the
Company and Executive will attempt in good faith to agree on terms of a
reference letter or statement for the Executive.
(c) The
Executive shall have no right to receive compensation or other benefits from
the
Company or MCF for any period after termination for cause by the Company or
termination by the Executive other than Termination for Good Reason, except
for
any vested retirement benefits to which the Executive may be entitled under
any
qualified employee pension plan maintained by the Company or MCF and any
deferred compensation to which the Executive may be entitled.
(d) The
term
“Termination for Cause” shall mean termination by the Company because of the
Executive’s: (i) fraud or material misappropriation with respect to the business
or assets of the Company; (ii) any violation of the Standards of Conduct
described in Chapter 2, Dismissal for Misconduct section of the MCF Corporation
and Subsidiaries Employee Handbook, revised and republished on May 1, 2006;
(iii) conduct that constitutes disloyalty to the Company and which materially
xxxxx the Company or conduct that constitutes breach of fiduciary duty involving
personal profit; (iv) conviction, or the entry of a plea of guilty or nolo
contendere by the Executive, of a felony or crime, or willful violation of
any
law, rule, or regulation, involving moral turpitude; (v) the use of drugs or
alcohol which interferes materially with the Executive’s performance of his
duties; or (vi) material breach of any provision of this Agreement.
(e) The
term
“Termination for Good Reason” shall mean that Executive’s resignation occurs
within three months of one of the following events: (i) an involuntary reduction
of Executive’s job duties or responsibilities; (ii) the Board resolves that
Executive report to someone other than the Board or the Chairman of the Board
of
the Company; (iii) any involuntary reduction of Executive’s Base Compensation;
or (iv) the issuance of a directive requiring Executive to relocate to a new
office located anywhere other than the Boston Metropolitan area of the
Commonwealth of Massachusetts.
(f) The
Executive’s employment pursuant to this Agreement shall terminate automatically
prior to the expiration of the term of this Agreement in the event of the
Executive’s death or disability that prevents the Executive from performing his
duties and responsibilities without a reasonable accommodation. In the event
the
Executive’s employment terminates prior to the expiration of the term of this
Agreement due to his death or disability, the Executive, or his Estate, shall
not be entitled to any further compensation under the provisions of this
Agreement, except for his Base Salary earned through the date of termination
and
the portion of any bonus which previously had been approved by the Company
but
was unpaid as of the Executive’s death or disability.
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11. Termination
by the Executive.
The
Executive may terminate his employment at any time during the term of this
Agreement by giving sixty (60) days’ prior written notice thereof to the Board
of Directors of the Company. In the event of termination by the Executive under
this Section 11, the Company may at its option elect to have the Executive
cease to provide services immediately, provided that during such 60-day notice
period the Executive shall be entitled to continue to receive his Base
Salary.
12. Return
of Proprietary Property.
The
Executive agrees that all property in the Executive’s possession that he obtains
or is assigned in the course of his employment with the Company, including,
without limitation, all documents, reports, manuals, memoranda, customer lists,
credit cards, keys, access cards, and all other property relating in any way
to
the business of the Company, is the exclusive property of the Company, even
if
the Executive authored, created, or assisted in authoring or creating such
property. The Executive shall return to the Company all such property
immediately upon termination of employment or at such earlier time as the
Company may request.
13. Confidential
Information.
Except
as permitted or directed by the Board of Directors of the Company, during the
time the Executive is employed by the Company or at any time thereafter, the
Executive shall not divulge, furnish, or make accessible to anyone or use in
any
way (other than in the ordinary course of the business of the Company) any
confidential or secret information or knowledge of the Company, whether
developed by himself or by others. Such confidential and/or secret information
encompassed by this Section 13 includes, but is not limited to, the Company’s
customer and supplier lists, business plans, and financial, marketing, and
personnel information. The Executive agrees to refrain from any acts or
omissions that would reduce the value of any confidential or secret knowledge
or
information to the Company, both during his employment hereunder and at any
time
after the termination of his employment. The Executive’s obligations of
confidentiality under this Section 13 shall not apply to any knowledge or
information that is now published publicly or that subsequently becomes
generally publicly known, other than as a direct or indirect result of a breach
of this Agreement by the Executive.
14. Patent
and Related Matters.
(a) The
Executive agrees to promptly disclose in writing to the Company complete
information concerning each and every invention, discovery, improvement, device,
design, process, or product made, developed, perfected, devised, conceived,
or
first reduced to practice by the Executive, either solely or in collaboration
with others, during the Executive’s term of employment by the Company, or within
six months thereafter, relating to the business, products, practices, or
techniques of the Company (hereinafter referred to as “Developments”). The
Executive, to the extent that the Executive has the legal right to do so, hereby
acknowledges that any and all of said Developments are the property of the
Company and hereby assigns and agrees to assign to the Company any and all
of
the Executive’s right, title, and interest in and to any and all of such
Developments.
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(b) The
provisions of this Section 14 shall not apply to any Development meeting the
following conditions:
(i) such
Development was developed entirely on the Executive’s own time; and
(ii) such
Development was made without the use of any Company equipment, supplies,
facilities, or trade secret information; and such Development does not relate
at
the time of conception or reduction to practice to (i) to the business of the
Company, or (ii) to the Company’s actual or demonstrably anticipated research or
development; and
(iii) such
Development does not result from any work performed by the Executive for the
Company.
(c) Upon
request and without further compensation therefor, but at no expense to the
Executive, and whether during the term of the Executive’s employment by the
Company or thereafter, the Executive will do all lawful acts, including, but
not
limited to, the execution of papers and the giving of testimony, that in the
opinion of the Company, its successors, or assigns, may be necessary or
desirable in obtaining, sustaining, reissuing, extending, or enforcing Letters
Patent, and for perfecting, affirming, and recording the Company’s complete
ownership and title thereto, and to cooperate otherwise in all proceedings
and
matters relating thereto.
15. Restrictive
Covenants.
(a) During
the employment of the Executive under this Agreement and for a period of one
year after termination of such employment, the Executive shall not at any time
(i) compete on his own behalf, or on behalf of any other person or entity,
with
the Company within all territories in which the Company does business with
respect to the business of the Company as such business shall have been
conducted on the date hereof or during the term of employment of the Executive
under this Agreement; (ii) solicit or induce, on his own behalf or on behalf
of
any other person or entity, any employee of the Company or any of its affiliates
to leave the employ of the Company; or (iii) solicit or induce, on his own
behalf or on behalf of any other person or entity, any customer of the Company
to reduce its business with the Company.
(b) The
Executive shall not at any time during or subsequent to his employment by the
Company, on his own behalf or on behalf of any other person or entity, disclose
any proprietary information of the Company or any of its affiliates to any
other
person or entity other than on behalf of the Company or in conducting its
business, and the Executive shall not use any such proprietary information
for
his own personal advantage or make such proprietary information available to
others for use, unless such information shall have come into the public domain
other than through unauthorized disclosure.
(c) The
ownership by the Executive of not more than five percent (5%) of a corporation,
partnership or other enterprise, other than MCF Corporation, shall not
constitute a violation hereof.
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(d) The
restrictions set forth in this Section 15 shall terminate without further action
required on the part of either party upon the occurrence of any of the following
events: (i) Termination Without Cause or Termination for Good Reason; or (ii)
the breach by the Company or MCF Corporation of any material representation,
warranty or covenant contained in this Agreement or the Merger
Agreement.
(e) If
any
portion of this Section 15 is found by a court of competent jurisdiction to
be
invalid or unenforceable, but would be valid and enforceable if modified, this
Section 15 shall apply with such modifications necessary to make this Section
15
valid and enforceable. Any portion of this Section 15 not required to be so
modified shall remain in full force and effect and not be affected thereby.
The
Executive agrees that the Company shall have the right of specific performance
in the event of a breach by the Executive of this Section 15.
16. Assignment.
The
rights and obligations of the Company and MCF Corporation under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company and MCF Corporation. Neither party may assign this
Agreement or any rights hereunder; provided, however, that the Company may
assign this Agreement to MCF Corporation or to any entity which is a successor
to the Company as a result of the Merger Agreement. Any purported or attempted
assignment or transfer by the Executive of this Agreement or any of the
Executive’s duties, responsibilities, or obligations hereunder shall be
void.
17. Company
Remedies.
The
Executive acknowledges that the remedy at law for any breach of any of the
provisions of Sections 12, 13, 14 or 15 will be inadequate, and that the Company
shall be entitled, in addition to any remedy at law or in equity, to preliminary
and permanent injunctive relief and specific performance.
18. Other
Contracts.
The
Executive shall not, during the term of this Agreement, have any other paid
employment, except (a) service on other boards of directors contemplated by
Section 1 hereof, and (b) with the prior approval of the Board of
Directors.
19. Notices.
All
notices, requests, demands, consents, or other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by overnight courier or express mail service or
by
postage prepaid registered or certified mail, return receipt requested (the
return receipt constituting prima facie evidence the giving of such notice
request, demand or other communication), by personal delivery, or by fax with
confirmation of receipt and a copy mailed with postage prepaid, to the following
address or such other address of which a party may subsequently give notice
to
the other party in accord with the provisions of this Section. Notice is
effective immediately if by personal delivery or by fax with confirmation
received and a copy mailed the same day. Notice sent by overnight courier or
by
registered or certified mail is effective the earlier of actual receipt or
the
fifth date after the date mailed as evidenced by the sender’s certified or
registered receipt.
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| To the Company: | MedPanel, Inc. |
| 00 Xxxxxxx Xxxxxx | |
| Xxxxxxxxx, XX 00000 | |
| To Executive: | Xxxxxxx Xxxxx |
| _____________________ | |
| _____________________ | |
20. Arbitration.
Any
dispute between the parties concerning the interpretation, validity or
performance of this Agreement or any of its terms and provisions shall be
submitted to binding arbitration in the State of California, City and County
of
San Francisco, before an arbitrator selected by the parties hereto, and the
prevailing party in such arbitration shall have the right to have any award
made
by the arbitrator confirmed by a court of competent jurisdiction and shall
be
entitled to reimbursement for all costs and expenses incurred, thereby,
including reasonable attorney’s fees.
21. Amendments
or Additions.
No
amendments or additions to this Agreement shall be binding unless in writing
and
signed by all parties hereto.
22. Section
Headings.
The
section headings used in this Agreement are included solely for convenience
and
shall not affect, or be used in connection with, the interpretation of this
Agreement.
23. Severability.
The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
24. Governing
Law.
This
Agreement shall be governed by the laws of the State of California (other than
the choice of law rules thereof).
|
COMPANY:
MEDPANEL,
INC.,
a
Delaware corporation
By:
_____________________________
Name:
Title:
MCF
CORPORATION:
By:
____________________________
Name:
Xxxxxxx X. Xxxxxx
Title:
Executive Vice President
|
EXECUTIVE:
__________________________
Xxxxxxx
Xxxxx
|
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