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EXHIBIT 10.106
EMPLOYMENT AGREEMENT
This AGREEMENT is made this _____ day of ______, 1997 ("Effective Date") by and
between
HealthCare COMPARE Corp., a Delaware corporation headquartered in Illinois
("Company"), and Xxxxxxx X. Xxxxx ("Employee").
BACKGROUND
A. Company desires to employ Employee, and Employee desires to be employed by
Company.
B. For and in consideration of the promises and of the mutual covenants
hereinafter set forth, it is hereby agreed by and between the parties as
follows:
AGREEMENT
1. Employment. Company hereby agrees to employ Employee to perform the
duties set forth in Section 3 hereof ("Employee Services"). Employee hereby
accepts employment to perform Employee Services for Employer under the terms
and conditions of this Agreement.
2. Term. The Initial Term of this Agreement will be for 3 years beginning on
the Effective Date and will automatically renew for consecutive 1 year terms,
unless earlier terminated pursuant to Section 6 hereof.
3. Duties. Employee will serve as Executive Vice President, Managed Care
Sales and perform all responsibilities and duties as are assigned, or
delegated to Employee, by President and Chief Executive Officer, including
duties to any subsidiary or division. Employee will report to and is subject
to supervision by President and Chief Executive Officer or his designee.
4. Time Commitment. Employee will devote Employee's entire time, attention
and energies to the performance of Employee Services. Employee may not be
associated with, consult, advise, work for, be employed by, contract with, or
otherwise devote any of the Employee's time to the pursuit of any other work
or business activities which may interfere with the performance of services
hereunder.
5. Compensation and Benefits. Company will pay the following compensation to
Employee in full consideration for performance of Employee Services hereunder
in accordance with Company's then - current payroll policies and procedures.
(a) Salary. Employee will receive a gross annual salary of $250,000.00.
This salary is payable in accordance with Company's then - current payroll
policies and procedures.
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(b) Incentive Compensation. Employee will be eligible to receive
incentive compensation in accordance with the following program. If
Employee's Annual Revenue (as defined below) for a calendar year (the
"Current Calendar Year") is greater than 102% of Employee's Annual
Revenue for the Calendar year immediately prior to the Current Year (the
"Prior Year"), then Employee will be paid an incentive compensation
amount calculated in accordance with the following formula:
Formula:
[(Current Year Revenue minus Revenue Threshold (as defined below))
multiplied by .45%] multiplied by the applicable Incentive Multiplier (as
defined below).
Company will pay Employee the incentive compensation described in this
Section 5(b) no later than 60 days after the end of the Current Calendar
Year.
Definitions:
(1) "Employee's Annual Revenue" means the portion of the total gross
revenue accrued by Company that is attributed by Company to Employee.
[All definitions and allocation provisions contained in the 1997 Sales
Incentive Plan will apply to the calculation of Employee's Annual
Revenue.]
(2) "Revenue Threshold" means the product that results from multiplying
Employee's Prior Year Annual Revenue times 102%.
(3) "Employee's Annual Percentage Growth" means the percentage that
Employee's Current Year Annual Revenue exceeds Employee's Prior Year
Annual Revenue.
(4) "Incentive Multiplier" :
If Employee's Percentage Then, the applicable
Growth is: "Incentive Modifier"
---------- will be:
--------
Greater than 2%, but less than 10% 75%
10% and above, but less than 15% 100%
15% and above, but less than 20% 125%
20% and above, but less than 25% 150%
25% and above, but less than 30% 175%
30% and above 200%
Examples of the Formula are attached as Exhibit A.
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(c) Expenses. Company will reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the
performance of Employee Services upon submission by Employee of expense
reports with substantiating vouchers, in accordance with the Company's
then current expense reimbursement policy.
(d) Benefits and Flexible Time Off. Employee shall be entitled to
participate in such group life insurance, major medical, and other
employee benefit plans (collectively "Benefit Plans") as established by
Company in accordance with the applicable terms and conditions of such
Benefit Plans, which Benefit Plans may be modified or discontinued by
Company at any time; provided, however that Employee shall meet the
requirements of the Benefit Plans for participation and in no event,
including breach or wrongful termination of this Agreement, shall
Employee be entitled to any amount of compensation in lieu of
participation, unless otherwise provided by the terms of the Benefit
Plan.
Employee shall also be entitled to paid time off in accordance with
Company's then current Flexible Time Off (FTO) program. Employee shall
accrue such FTO at the rate specified in the FTO program. Flexible Time
Off shall be taken with due consideration for the services required of
Employee and to the requirements of Company.
6. Termination.
(a) Either party may terminate this Agreement at any time following the
Initial Term, without cause, upon no less than one hundred and twenty
(120) day's prior written notice. In such event, Employee, if requested
by Company, will continue to render Employee Services and be paid
Employee's regular compensation up to the date of termination in
accordance with Company's then - current payroll policies and procedures.
(b) Either party may terminate this Agreement at anytime for cause upon
14 days written notice. "Cause" includes, without limitation, breach of
any provision of this Agreement or Employee's failure to adhere to the
Company's policies and procedures. If the cause is not cured within the
14 day period, the Agreement may then be terminated by written notice.
An opportunity to cure is not required if the party receiving notice of
termination has previously been given notice of termination and the
opportunity to cure the same or similar cause.
(c) Company may terminate this Agreement by written notice at anytime
(including during the Initial Term) immediately for the following
reasons: (i) Death or legal incapacity of Employee; (ii) Employee's
conviction of a felony; (iii) willful violation of the Company's policies
or standards including without limitation, Corporate Compliance
standards, confidentiality and nondisclosure; or (iv) theft or
dishonesty.
(d) Company may terminate at any time (including during the Initial Term)
by written notice upon Employee's other incapacity or inability to
perform Employee Services for a period of at least 90 consecutive days
because of impairment of Employee's physical or
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mental health making it impossible or impractical for Employee to perform
Employee Services.
7. Confidentiality. Employee agrees not to directly or indirectly use or
disclose, for the benefit of any person, firm or entity other than Company
and its subsidiary companies, the Confidential Business Information of
Company. Confidential Business Information means information or material
which is not generally available to or used by others or the utility or
value of which is not generally known or recognized as a standard practice,
whether or not the underlying details are in the public domain, including
but not limited to its computerized and manual systems, procedures, reports,
client lists, review criteria and methods, financial methods and practices,
plans, pricing and marketing techniques as well as information regarding
Company's past, present and prospective clients and their particular needs
and requirements, and their own confidential information.
Upon termination of employment, with or without cause, Employee agrees
to return to Company all policy and procedure manuals, records, notes, data,
memoranda, and reports of any nature (including computerized and
electronically stored information) which are in Employee's possession and/or
control which relate to (i) the Confidential Business Information of
Company, (ii) Employee's employment with Company, or (iii) the business
activities or facilities of Company or its past, present, or prospective
clients.
8. Restrictive Covenant. During the period of employment and for a
period of one year from the date of termination, with or without cause,
Employee will not directly or indirectly, within the United States or in any
foreign market in which Employee was engaged in activities on behalf of
Company, own, engage or participate in any way in any business which is
similar to or competitive with any actual or planned business activity
engaged in or planned by Company at the time the employment was terminated.
However, this Agreement shall not prohibit ownership of up to 2% of the
shares of stock of any such corporation whose stock is listed on a national
securities exchange or is traded in the over-the-counter market.
Employee further agrees that, for a period of one year after termination
of employment with Company, with or without cause, Employee will promptly
notify Company of any business with whom Employee is associated or in which
has an ownership interest and provide Company with a description of
Employee's duties or interests.
For a period of one year after termination of employment, with or without
cause, Employee will not directly or indirectly, for the purpose of selling
services provided or planned by Company at the time the employment was
terminated, call upon, solicit or divert any actual customer or prospective
customer of Company. An actual customer, for purposes of this Section, is
any customer to whom Company has provided services within one year prior to
Employee's termination. A prospective customer, for purposes of this
Section, is any prospective customer to whom Company sought to provide
services within one year prior to the date of Employee's termination and
Employee has knowledge or and was involved in such solicitation.
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9. Non-Solicitation of Employees. Employee further agrees that for a period
of one year from the date of Employee's termination, with or without cause,
Employee shall not directly or indirectly solicit or hire any person who is
currently or was an employee of Company at any time during the twelve months
prior to Employee's termination.
10. Remedies. In the event Employee breaches or threatens to breach Sections
7, 8 or 9 of this Agreement, Company shall be entitled to injunctive relief,
enjoining or restraining such breach or threatened breach. Employee
acknowledges that Company's remedy at law is inadequate and that Company will
suffer irreparable injury if such conduct is not prohibited.
Employee and Company agree that, because of the difficulty of
ascertaining the amount of damages in the event that Employee breaches
Section 9 of this Agreement, Company shall be entitled to recover, at its
option, as liquidated damages and not as a penalty, a sum equal to one year's
annual salary of the employee(s) solicited to leave Company's employ. The
parties further agree that the existence of this remedy will not preclude
employer from seeking or receiving injunctive relief.
Employee further agrees that the covenants contained in Sections 7, 8 or
9 shall be construed as separate and independent of other provisions of this
Agreement and the existence of any claim by Employee against Company shall
not constitute a defense to the enforcement by Company of either of these
paragraphs.
11. Property Rights. All discoveries, designs, improvements, ideas,
inventions, creations, and works of art, whether or not patentable or subject
to copyright, relating to the business of Company or its clients, conceived,
developed or made by Employee during employment by Company, either solely or
jointly with others (hereafter "Developments") shall automatically become the
sole property of Company. Employee shall immediately disclose to Company all
such Developments and shall, without additional compensation, execute all
assignments, application or any other documents deemed necessary by Company
to perfect Company's rights therein. These obligations shall continue for a
period of one year beyond the termination of employment with respect to
Developments conceived, developed or made by Employee during employment with
Company.
Company acknowledges and agrees that the provisions of this section
shall not apply to inventions for which no equipment, supplies, facility or
trade secret information of Company or its clients were used by Employee and
which were developed entirely on Employee's own time unless (a) such
inventions relate (i) to the business of Company or (ii) to Company's actual
or demonstrably anticipated research or development or (b) such inventions
result from any work performed by Employee for Company.
12. Assignments. Neither party shall have the right or power to assign any
rights or duties under this Agreement without the written consent of the
other party, provided, however, that Company shall have the right to assign
this Agreement without consent pursuant to any corporate reorganization,
merger, or other transaction involving a change of control of Company
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or to any subsidiary company. Any attempted assignment in breach of this
Section 12 shall be void.
13. Severability. Each section, paragraph, clause, sub-clause and provision
(collectively "Provisions") of this Agreement shall be severable from each
other, and if for any reason the paragraph, clause, sub-clause or provision
is invalid or unenforceable, such invalidity or unenforceability shall not
prejudice or in any way affect the validity or enforceability of any other
Provision hereof.
14. Miscellaneous.
(a) This Agreement, the schedules and any amendments hereto contain the
entire agreement of the parties with respect to the employment of the
Employee and supersedes all other understandings (including without
limitation, that certain HealthCare COMPARE Employment Agreement, dated
August 21, 1990), whether written or oral; provided, however, that
Employee shall comply with all policies, procedures and other
requirements of Company as established in the Colleague Handbook and
Corporate Policy Manuals, not inconsistent with this Agreement.
(b) Failure on the part of either party to insist upon strict compliance
by the other with respect to any of the terms, covenants and conditions
hereof, shall not be deemed a subsequent waiver of such term, covenant or
condition.
(c) The provisions of any paragraph containing a continuing obligation
after termination shall survive such termination whether with or without
cause and even if occasioned by Company's breach or wrongful termination.
(d) This Agreement may not be modified except in writing as signed by the
parties; provided, however, that Company may amend or terminate its
Benefit Plans, Incentive Plan, Corporate Policies and/or employees' rules
and regulations in its sole discretion.
(e) In the event of litigation under this Agreement, the court shall have
discretion to award the prevailing party reasonable attorney's fees.
15. Governing Law. It is the intention of the parties hereto that all
questions with respect to the construction, formation, and performance of
this Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with the laws of the State of Illinois. The parties
hereto submit to the jurisdiction and venue of the courts of DuPage County
Illinois in respect to any matter or thing arising out of this agreement
pursuant hereto.
16. Notice. Any notice required pursuant to this Agreement will be in
writing and will be deemed given upon the earlier of (i) delivery thereof, if
by hand, (ii) five business days after mailing if sent by mail (registered or
certified mail, postage prepaid, return receipt requested),
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(iii) the next business day after deposit if sent by a recognized overnight
delivery service, or (iv) transmission if sent by facsimile transmission or
by electronic mail, with return notification (provided that any notice sent
by facsimile or electronic mail shall also promptly be sent by one of the
means described in clauses (i) through (iii) of this Section 18. All notices
will be addressed as follows or to such other address as a party may identify
in a notice to the other party:
to Company: HealthCare COMPARE Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx,
President and Chief Executive Officer
CC: General Counsel
to Employee: __________________________
__________________________
__________________________
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement in the State of Illinois as of the day and year first above written.
The Company:
HealthCare COMPARE Corp.
By: __________________________________
Its: President and
Chief Executive Officer
Employee:
_______________________________________
Xxxxxxx X. Xxxxx
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EXHIBIT A
TO EMPLOYEE AGREEMENT
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EXAMPLE
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1996 Revenue $229,738.000
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MINIMUM THRESHOLD
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@ 102% $234,332,760
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What If Scenarios
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#1 #2 #3
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CURRENT ESTIMATE
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1997 Revenue $265,000,000 $257,000,000 $280,000,000 $300,000,000
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Difference $30,667,240 $22,667,240 $45,667,240 $65,667,240
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% Growth 13.35% 9.87% 19.88% 28.58%
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Incentive % 0.45% 0.45% 0.45% 0.45%
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Incentive Amount $138,003 $102,003 $205,503 $295,503
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Incentive Mutiplier 100% 75% 125% 175%
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TOTAL INCENTIVE $138,003 $76,502 $256,878 $517,130
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