EXHIBIT 10.24
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is made and
entered into as of this 1st day of June, 2000, by and between HEALTHPLAN
SERVICES CORPORATION, a Delaware corporation and the companies identified on
Exhibit A attached hereto (hereinafter collectively called the "Employer"), and
XXXXXXX X. XXXXXX (hereinafter called "Employee").
WHEREAS, the Employee is an employee of the Employer; and
WHEREAS, as consideration for Employee's promotion to the position of
President and Chief Operating Officer, Employer has requested that, effective as
of the date of such promotion, Employee enter into an Employment and
Noncompetition Agreement with Employer in substantially the form set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound thereby, agree as follows:
W I T N E S S E T H :
1. Employment. Employer hereby agrees to employ Employee, and Employee
hereby accepts employment with Employer upon the terms and conditions
hereinafter set forth.
2. Term. Subject to the provisions of resignation and termination as
hereinafter provided, the term of this Agreement shall commence on June 1, 2000
and shall terminate on May 31, 2001; provided that this Agreement shall
automatically renew for one year on each anniversary date unless either party
provides thirty (30) days advance written notice of termination prior to the end
of the then applicable term.
3. Duties. The Employee is engaged as the Employer's President and
Chief Operating Officer and shall have such duties, responsibilities and
accommodations as may be assigned to him, from time to time, by the Board of
Directors or Chief Executive Officer, if applicable, of Employer. Nothing herein
shall preclude the Board of Directors of Employer from changing the duties of
Employee if the Board concludes in its reasonable judgment that such changes are
in the Employer's best interests.
4. Extent of Service. Employee shall exclusively devote his entire
working time, energy and attention to his duties in connection with Employer.
5. Compensation. During the term of this Agreement, Employer shall pay
to Employee the following compensation, which shall be payable in accordance
with Employer's normal payroll policies applicable to all of Employer's
employees and shall be subject to all authorized and required payroll deductions
for taxes, social security and the like, and contributions
to benefit plans:
(a) During the term of this Agreement (whether initial or
renewal) an annual salary of no less than $275,000.00 U.S. (the "Annual
Base Salary") provided that the Board of Directors in its sole
discretion may increase such Annual Base Salary at any time during the
term of this Agreement and upon such increase the increased salary
shall become the new Annual Base Salary from the effective date of such
increase forward;
(b) In addition to the Annual Base Salary, the Employee shall
be entitled to:
(i) A bonus payable no later than February 15, 2001
and calculated in accordance with the formula set forth on
Exhibit A attached hereto (it being understood that the
minimum bonus award which Employee will receive for 2000 is
$50,000). Thereafter, the bonus plan of the Employer will be
formulated by the Compensation Committee of the Board of
Directors.
(ii) A stock option grant of 133,000 shares of
Employer's common stock at a strike price equal to the closing
price of such stock on the New York Stock Exchange as of June
14, 2000 (the date such options were approved by the
Employer's Compensation Committee), in accordance with the
terms of the HealthPlan Services Corporation 1995 Incentive
Equity Plan, and such other stock options as the Board of
Directors may from time to time determine;
(iii) Participate in the employee benefit plans of
Employer in existence from time to time;
(iv) Severance benefits in accordance with the
provisions of Section 7 hereof.
6. Termination.
(a) The foregoing notwithstanding, this Agreement is not to be
considered an agreement for a fixed term or as a guarantee of
continuing employment. Accordingly, subject to the provisions of
Section 7 hereof, Employee's employment may be terminated by Employer
with or without Cause (as defined below) upon immediate written notice
to Employee at any time during the term of this Agreement.
Additionally, Employee's employment shall automatically terminate upon
his death or upon a determination that he is Permanently Disabled (as
defined below). Employee may resign as an officer and, if applicable,
director and terminate his employment at any time upon 30 days written
notice to Employer. In the event that such termination is by the
Employer for Cause or by the Employee other than as a result of a
Constructive Termination Event (as defined below), for death or
Permanent Disability, Employee shall be paid the bi-weekly portion of
his Annual Base Salary then due through the date of such termination
and shall be entitled to no salary from that date forward and to only
those benefits which Employer is required by law to provide to
Employee. Upon any termination, Employee shall immediately return any
and all property and records belonging to Employer which are in
Employee's possession and shall vacate Employer's offices in a prompt
and professional manner. In
2
addition to the foregoing, upon termination of Employee's employment
with Employer for any reason, Employee shall resign promptly as an
officer and, if applicable, director of Employer and any subsidiary or
parent of Employer unless Employer indicates in writing to Employee its
desire that Employee retain any such position. In the event such
termination by the Employer is without cause, or is caused by the death
or Permanent Disability of Employee or in the event that the Employee
terminates his employment as a result of a Constructive Termination
Event, Employee shall be entitled solely to (y) the Severance Benefits
provided in Section 7, and (z) immediate vesting of all unvested
options, rights and benefits under any stock option plan in which
Employee has an unvested interest. The foregoing notwithstanding, in
the event of any termination of Employee's employment whether or not
for Cause, Employee shall be entitled to receive all benefits which are
accrued, vested and earned up to the termination date under the terms
of any existing benefit plan such as the vested balance of the
employee's account under any retirement or deferred compensation plan
and any benefits which are legally required to be provided after
termination such as COBRA benefits (the "Legally Earned or Required
Benefits").
(b) Upon a termination of employment, whether by Employee or
by Employer, with or without Cause, Employee shall render reasonable
cooperation to Employer in order to insure an orderly and businesslike
transfer of Employee's duties to other personnel designated by the
Employer. Additionally, Employee shall make himself available at
reasonable times upon reasonable prior written notice to consult with
Employer and assist Employer with respect to (i) any matters for which
Employer requests such assistance for up to five (5) hours per week
during a period of ninety (90) days after such termination, and (ii)
any litigation or governmental or quasi-governmental agency
investigation which may be pending at the time of termination or
instituted after termination which relates to any period during which
Employee was employed by Employer for the period during which such
matters are pending; provided, that, in either case, Employer shall
reimburse Employee for any reasonable out-of-pocket expense incurred by
Employee at Employer's request in connection with such consultation or
assistance, and with respect to (ii), Employer shall schedule such
consultation at times which will not interfere with any subsequent
employment which Employee has obtained and such consultation shall not
require more than an average of two days per month without Employee's
consent.
7. Severance Benefits.
(a) If during the term of this Agreement, Employee's
employment is terminated (i) by the Employer other than for Cause, as
defined below, or (ii) by the Employee as a result of the occurrence of
a Constructive Termination Event, as defined below, which has not been
cured by the Employer within 30 days of receipt of written notice from
the Employee that such event has occurred, then upon the occurrence of
such event Employer shall pay to the Employee (or the Employee's estate
in the event of death after termination), as a severance benefit and in
complete satisfaction of any and all claims which Employee may have
against Employer or its affiliates, officers, directors or employees as
a result of this Agreement or his previous employment by Employer, an
amount which is equal to (y) one (1) times Employee's Annual Base
Salary plus (z) the aggregate amount of Employee's Annual Base Salary
which is due during the remaining portion of the then current term
3
hereof; provided, however, Employer shall not be obligated to pay any
severance benefit until Employee (or Employee's personal representative
in the event of Employee's death) has delivered to Employer a complete
and unconditional release, in form reasonably satisfactory to Employer,
releasing Employer from any and all claims which Employee may have
against Employer as a result of any occurrence during Employee's
employment and including, but not limited to, any claim for wrongful
termination (the "Employee Release"). The foregoing notwithstanding,
the Employee Release shall not release the Employer from any of its
post termination obligations under this Agreement or under any employee
benefit plan of the Employer. Such severance benefit shall be paid
within ten (10) days following the effective date of such termination.
As used in this Agreement:
(A) the term "Cause" means (i) the Employee's
violation of his fiduciary duty to the Employer, (ii) gross or
willful failure by the Employee to perform the duties of
Employee's position, (iii) the Employee's habitual unexcused
absence over an extended period, (iv) embezzlement or
misappropriation of Employer funds by the Employee, or (v) the
Employee's conviction of a felony;
(B) the term "Permanent Disability" means the
permanent mental or physical inability of the Employee to
perform with reasonable accommodation the essential duties of
Employee's position as existing on the date of this Agreement
which condition causes the Employee to be unable to perform
the duties of his office for a period of six months in any
twelve-month period.
(C) the term "Constructive Termination Event" means
action by the Employer which is directed at the Employee
specifically and not at all employees generally and which has
the effect of significantly reducing the Employee's
compensation, employment responsibilities, or authority, or
the nonpayment by Employer of compensation due and owing to
the Employee under this Agreement, which has not been cured by
the Employer within 30 days of receipt of written notice from
the Employee that such nonpayment has occurred.
(b) Following Employer's termination of Employee's employment
for any reason other than Cause or Employee's termination of his
employment as a result of a Constructive Termination Event during the
term of this Agreement, Employer shall maintain in full force and
effect, for the Employee's continued benefit until the earlier of (i)
12 months after such termination of Employee's employment or (ii) the
Employee's commencement of full time employment with a new employer,
all life insurance, medical, dental, health and accident, and
disability plans, programs or arrangements of the Employer in which the
Employee participated on the date of termination, provided that the
Employee's continued participation is possible under the general terms
and provisions of such plans and programs. In the event that such
continued participation is not possible, the Employer shall obtain and
pay for comparable individual coverage for the Employee.
(c) The expiration of the term of this Agreement shall not
constitute a termination for purposes of Section 6 hereof. However, if,
after the expiration or nonrenewal of this Agreement, the Employee
continues to serve as an employee of the
4
Employer and if Employee is terminated by Employer for any reason other
than Cause, Employee shall be entitled to receive his Annual Base
Salary for a period of twelve (12) months, payable within ten (10) days
after the effective date of such termination.
8. Non-Competition.
(a) For a period equal to the term of this Agreement and one
year after the termination of employment for any reason, without the
written consent of the Employer, Employee shall not either directly or
indirectly engage (whether for his own account or as a partner, joint
venturer, employee, consultant, agent, contractor, officer, director or
shareholder or otherwise) in any business within the United States
which delivers marketing, distribution, or administrative services on
behalf of health care payors, provided, however, that the foregoing
shall not be deemed to prohibit Employee from purchasing and owning
securities of a company traded on a national securities exchange or on
the NASDAQ National Market with which Employee has no relationship so
long as such ownership does not exceed 2% of the outstanding stock of
such company.
(b) During the term of this Agreement and for a period of
three years after termination of Employee's employment for any reason
Employee will not:
(i) solicit, contact or encourage (i) any person who
is an employee of the Employer or of any division or
subsidiary of the Employer or (ii) any supplier, vendor, agent
or consultant to the Employer, to terminate its, his, or her
relationship with the Employer;
(ii) make any derogatory, defamatory or negative
statement about the Employer or any of their officers,
directors, or employees to the press, to any part of the
investment community, to the public, or to any person
connected with, employed by or having a relationship to the
Employer, provided that nothing contained herein shall be
deemed to prohibit full and xxxxx discussions of the Employer
and its subsidiaries and its affairs in any Board of Directors
meeting of the Employer or its parent or subsidiary
corporations and, during such period as Employee may be a
stockholder of Employer, at any stockholders' meeting thereof;
(iii) willfully interfere with or disrupt the
Employer's operations; or
(iv) assist, advise or provide information or
support, whether financial or otherwise, to any person in
connection with any proxy contest, action by written consent
or vote of the Employer, the purpose of which is to elect a
director or slate of directors who were not nominated by the
then sitting Board of Directors of the Employer, provided,
however, that nothing contained herein shall require the
Employee to vote any shares held by him in any particular
manner.
(c) For a period of three years after termination of
Employee's employment for any reason other than Cause, Employer and its
directors, chief executive, financial and
5
operating officers shall refrain from making any negative, derogatory
or defamatory statement about Employee.
9. Nondisclosure of Confidential Information and Trade Secrets. For the
Applicable Period as defined below, Employee shall not disclose, either directly
or indirectly, any Confidential Information or Trade Secrets to any other person
or otherwise use such Confidential Information or Trade Secrets for any purpose.
For purposes of the foregoing, the term Trade Secret has the meaning ascribed
thereto in Section 688.002(4), Florida Statutes, or any revision or successor
thereto, and Confidential Information means any technical or nontechnical data,
formula, pattern, compilation, program, device, method, technique, drawing,
process, know-how, financial data, financial plan, marketing plan, expansion
plan, cost analysis, list of suppliers or employees, or other proprietary
information which is proprietary, secret and confidential and is not readily and
legally available to the public from sources other than the Employer which is
not classified as a Trade Secret. The term "Applicable Period" shall mean five
years with respect to disclosure of Confidential Information, and the period
during which a claim may be brought under Chapter 688, Florida Statutes, or any
revision or successor thereto with respect to disclosure of Trade Secrets.
10. Special Interpretive and Enforcement Provision. The prohibited
activities set forth in Sections 8 and 9 above are herein defined as "Restricted
Activities" and the covenants set forth therein are herein defined as
"Restrictive Covenants". If a court determines that any Restricted Covenant is
not enforceable or is unreasonable, arbitrary or against public policy, the
Restricted Activity and the related Restrictive Covenant shall be considered
divisible both as to time and geographic area, if applicable, so that the
Employer shall be authorized to enforce such Restrictive Covenant for such
lesser time and if applicable lesser geographic area as the court determines to
be reasonable, non-arbitrary and not against public policy. In the event of a
breach or violation or threatened breach or violation by Employee of the
provisions of any of these Restrictive Covenants, Employer shall be entitled to
an injunction (without the provision of bond by Employer) restraining Employee
from directly or indirectly engaging in the Restricted Activities in breach or
violation of these Restrictive Covenants, and restraining Employee from
rendering any services to or participating with any person, firm, corporation,
association, partnership, venture or other entity which would constitute a
violation of a Restrictive Covenant. Nothing herein shall be construed as
prohibiting Employer from pursuing any other remedies available to it by law or
by this Agreement for breach, violation or threatened breach or violation of the
provisions of these Restrictive Covenants, including, by way of illustration and
not by way of limitation, the recovery of damages from Employee or any other
person, firm, corporation or entity. The provisions of these Restrictive
Covenants shall survive the termination of this Agreement for the purpose of
providing Employer with the protection of the covenants of Employee provided
herein. The running of the period of restriction applicable to any Restrictive
Covenant shall be suspended during any period in which Employee is in breach of
such Restrictive Covenant. Employee acknowledges and agrees that the intent and
purpose of the Restrictive Covenants is to preclude Employee from engaging in
the Restricted Activities for the full term of the applicable Restrictive
Covenant and that such purpose and effect would be frustrated by measuring the
period of restriction from the date the applicable Restrictive Covenant took
effect where Employee failed to honor these Restrictive Covenants until directed
to do so by court order.
6
11. Cessation of Benefits. In the event that (i) Employee materially
breaches Employee's agreements contained herein after a severance benefit
becomes payable hereunder and such breach is not cured to Employer's
satisfaction within ten (10) days of written notice thereof, (ii) Employee
asserts in any litigation that the Restrictive Covenants or the Employee Release
is unenforceable for any reason, or (iii) facts come to the attention of the
Employer which prove Employee, while employed by Employer, was guilty of
committing an act involving embezzlement, misappropriation, theft or fraud, in
addition to any other remedy which Employer may have as a result thereof,
Employer shall be entitled to stop paying any severance benefit then not paid
and recover from Employee the payment of any severance benefits already paid to
Employee hereunder.
12. Release. Employee hereby completely and unconditionally releases
the Employer from any and all claims which the Employee may have against the
Employer as the result of any occurrence during Employee's employment up to the
date of this Agreement. This release also binds the Employee's heirs, personal
representatives, spouse, beneficiaries, and assigns. This Release also
completely releases the Employer's parents, subsidiaries, predecessors,
successors, and affiliates, as well as its former, present, and future officers,
directors, employees, shareholders, employee benefits plans, and counsel.
13. Notices. Any notices, consents, approvals or waivers which are to
be given to any party to this Agreement by any other party or parties to this
Agreement shall be in writing, shall be properly addressed to the party to whom
such notice is directed, and shall be either actually delivered to such party or
sent by United States mail, return receipt requested. Notices shall be addressed
to the parties as follows:
If to Employer: HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: General Counsel
If to Employee: Xxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
14. Litigation Forum. The parties hereto agree that this Agreement
shall be deemed for all purposes to have been entered into in Florida. The
parties hereto agree that all actions or proceedings, directly or indirectly,
arising out of or related to this Agreement or contesting the validity or
applicability of this Agreement shall be litigated exclusively in the Circuit
Court of Hillsborough County, Tampa, Florida, or the United States District
Court for the Middle District of Florida, Tampa Division.
15. Expenses of Enforcement. In the event of any legal proceeding
arising directly or indirectly from this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees and costs from the non-prevailing
party (at both the trial and appellate court levels).
7
16. Miscellaneous.
(a) Entire Agreement. This Agreement, including all exhibits
and schedules hereto as referenced herein, constitutes the entire
agreement between the parties hereto pertaining to the subject matters
hereof, and supersedes all negotiations, preliminary agreements, and
all prior and contemporaneous discussions and understandings of the
parties in connection with the subject matters hereof. Except as
otherwise herein provided, no covenant, representation or condition not
expressed in this Agreement, or in an amendment hereto made and
executed in accordance with the provisions of subsection b. of this
Section, shall be binding upon the parties hereto or shall affect or be
effective to interpret, change or restrict the provisions of this
Agreement.
(b) Amendments and Waivers. No change, modification, waiver or
termination of any of the terms, provisions, or conditions of this
Agreement shall be effective unless made in writing and signed or
initialed by all parties hereto. Any waiver of any breach of any
provision of this Agreement shall operate only as to the specific
breach waived and shall not be deemed a waiver of any other breach,
whether occurring before or after such waiver.
(c) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Florida.
(d) Separability. Except as provided in Section 10 hereof, if
any section, subsection or provision of this Agreement or the
application of such section, subsection or provision is held invalid,
the remainder of this Agreement and the application of such section,
subsection or provision to persons or circumstances, other than those
with respect to which it is held invalid, shall not be affected
thereby.
(e) Headings and Captions. The titles or captions of sections
and subsections contained in this Agreement are provided for
convenience of reference only, and shall not be considered a part
hereof for purposes of interpreting or applying this Agreement; and,
therefore, such titles or captions do not define, limit, extend,
explain, or describe the scope or extent of this Agreement or any of
its terms, provisions, representations, warranties, conditions, etc.,
in any manner or way whatsoever.
(f) Gender and Number. All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine or neuter and to
the singular or plural as the identity of the person or entity or
persons or entities may require.
(g) Binding Effect on Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs and assigns, provided
that the rights and obligations of Employee hereunder are personal to
Employee and may not be assigned or transferred without the consent of
Employer except in the event of a transfer upon death pursuant to a
will or the laws of intestate succession.
8
(h) Continuance of Agreement. The rights, responsibilities and
duties of the parties hereto and the covenants and agreements herein
contained shall survive the execution hereof, shall continue to bind
the parties hereto, and shall continue in full force and effect until
each and every obligation of the parties hereto, pursuant to this
Agreement, shall have been fully performed.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above-written.
WITNESSES: HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Xx.
--------------------------------
Xxxxx X. Xxxxxx, Xx., Chairman
"EMPLOYER"
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, individually
"EMPLOYEE"
9
AMENDMENT TO
EMPLOYMENT AND NONCOMPETITION AGREEMENT
HEALTHPLAN SERVICES CORPORATION, as defined in the Employment and
Noncompetition Agreement dated June 1, 2000 (the "Agreement"), and XXXXXXX X.
XXXXXX hereby agree to amend the Agreement as follows:
1. Paragraph 2 of the Agreement shall be deleted in its entirety and
replaced with the following paragraph:
"2. Term. Subject to the provisions of resignation and
termination as hereinafter provided, the term of this Agreement shall
commence on June 1, 2000 and shall terminate on May 31, 2001; provided
that this Agreement shall automatically renew for one year on each
anniversary date unless either party provides one hundred twenty (120)
days advance written notice of termination prior to the end of the then
applicable term."
Agreed as of this 30th day of January, 2001.
HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Xx
------------------------------------------
Xxxxx X. Xxxxxx, Xx., Chairman
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx
