EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN QUOVADX, INC. AND LINDA WACKWITZ FEBRUARY 10, 2005
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and between Quovadx, Inc. (the
“Company”), and Xxxxx Xxxxxxxx (“You” or “Your”) (collectively, the
“Parties”), is entered into and effective as of the 10th of February, 2005 (the
“Effective Date”).
For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
A. Position. The Company shall employ You as Executive Vice President, Chief
Legal Officer and Secretary.
B. Reporting. You shall report directly to the Company’s Chief Executive Officer
(“CEO”).
C. Duties. You agree to perform all duties that are consistent with Your position and
that may otherwise be assigned to You by the CEO from time to time. You further agree to abide by
all Company policies, procedures, and practices of general applicability to Company executive
officers.
D. Devotion of Time. You agree to devote Your best efforts to promote the business
and/or interests of the Company and to perform Your obligations under this Agreement. You may (i)
engage in community, charitable, and educational activities, and (ii) manage personal investments,
provided that such activities do not materially conflict or interfere with the performance of Your
obligations under this Agreement.
A. Base Salary. During the Employment Period, the Company will pay You an annual base
salary (“Base Salary”) of $200,000.00 in accordance with the Company’s normal payroll
practices. The Compensation Committee of the Company’s Board of Directors (the
“Committee”) will review Your Base Salary at least annually, and adjustments will be made
in accordance with the Committee’s standard practices.
B. Bonus. During the Employment Period, You will be eligible to receive an annual
bonus with a target payment of 30% of Your then current Base Salary (“Target Bonus”) if You
performance meets certain criteria agreed to by the Committee as recommended by the CEO (the
“Committee Performance Criteria”). The actual bonus paid may be higher or lower than the
Target Bonus for over- or under-achievement of the Committee Performance Criteria, as determined by
the Committee. Bonuses, if any, will accrue and become payable in accordance with the Committee’s
standard practices for paying executive incentive compensation; provided, however, that Your bonus,
if any, for any particular fiscal year will be paid no later than thirty (30) days following the
Committee’s receipt of audited financial statements for such fiscal year.
C. Equity Awards. Executive will be eligible to receive options to purchase the
Company’s common stock and other equity incentive awards pursuant to any equity incentive plans or
arrangements it may have in effect from time to time. The Committee will determine in its
discretion whether Executive will be granted any such award or awards and the terms of any such
award or awards in accordance with the terms of any applicable equity incentive plan or arrangement
that may be in effect from time to time.
D. Benefits Plans. During the Employment Period, You will be eligible to participate
in all benefit plans in effect for executive officers and employees of the Company (including the
Company’s vacation policy), as such plans may exist from time to time and subject to the terms and
conditions of such plans.
E. Business Expenses. During the Employment Period, the Company will reimburse You
for all ordinary and reasonable business expenses You incur in the performance of Your duties in
accordance with the policies and procedures of the Company as in effect from time to time.
A. Expiration of the Employment Period as a result of non-renewal; or
B. Your resignation without Good Reason; or
C. Your death; or
D. Your Disability (as defined in the Company’s long-term disability plan); or
E. For Cause; (“Cause” shall mean a termination by the Company because of
any one of the following events: (i) Your breach of this Agreement that results in material injury
to the Company which, if capable of cure, has not been cured by You within thirty (30) days after
receipt by You of written notice from the CEO of such breach; (ii) Your misconduct, fraud,
dishonesty, or malfeasance that results in material injury to the Company; (iii) Your willful or
intentional failure to (a) perform Your duties under this Agreement, (b) follow the reasonable and
legal direction of the CEO, or (c) follow the policies, procedures, and rules of the Company. For
any such failure listed in this sub-section (iii), the CEO shall first give You written notice
setting forth with specificity the reasons that the CEO believes You are failing, and thirty (30)
days to cure such failure; or (iv) Your conviction of, or plea of nolo contendre to, a felony.
For purposes of this Agreement, Your failure to achieve certain results, such as those set
forth in a business plan of the Company, that is not the result of Your demonstrating willful and
deliberate dereliction of duty shall not constitute Cause); or
G. Without Cause (meaning a termination by the Company without Cause. For purposes of
clarification, the Company’s providing notice to You as provided in Section 2 to not renew this
Agreement for an additional period will not be considered a termination without Cause).
Upon any such termination, the Employment Period automatically will terminate (but in no event will
this affect the survival of Your and the Company’s post-termination obligations pursuant to Section
16).
A. Accrued Compensation. If Your employment terminates for any reason, then the
Company will pay You all accrued but unpaid vacation, expense reimbursements, wages, and other
benefits due to You under any Company-provided plans, policies, and arrangements.
B. Termination by Company Without Cause. In addition to the payments and benefits
provided under Section 5A, if Your employment is terminated by the Company without Cause during the
Employment Period, then, subject to Your compliance with the provisions of Section 8 and You
executing and not revoking a separation agreement and general release of claims in a form
satisfactory to the Company, the Company will (i) continue to pay You Your Base Salary through the
period of six months following Your termination date (the “Restricted Period” in the event
You are entitled to benefits under this Section 5B), (ii) pay You a lump sum payment equal to a
pro-rated amount of Your Target Bonus for the year in which the termination occurs, to be paid on
the date bonuses are paid to other executive officers of the Company, but in no event more than one
year following Your termination date, and (iii) reimburse You for COBRA continuation coverage
premiums to continue medical benefits for You and Your eligible dependents for the Restricted
Period (but, if further limited by applicable law, the maximum permissible period) or, if earlier,
until You become eligible for substantially similar benefits from another employer, provided You
validly elect to continue Your medical benefits in accordance with applicable law.
C. Non-Renewal of Employment or Renewal Period by Company. In addition to the
payments and benefits provided under Section 5A, in the event the Company chooses not to extend the
Employment Period by providing notice to You as provided in Section 2 (whether before or after a
Change of Control), then, subject to Your compliance with the provisions of Section 8 and You
executing and not revoking a separation agreement and general release of claims in a form
satisfactory to the Company, the Company will (i) continue to pay You Your Base Salary through the
period of three (3) months following Your termination date (the “Restricted Period” in the
event You are entitled to benefits under this Section 5C), and (ii) reimburse You for COBRA
continuation coverage premiums to continue medical benefits for You and Your eligible dependents
for the Restricted Period (but, if further limited by
applicable law, the maximum permissible period) or, if earlier, until You become eligible for
substantially similar benefits from another employer, provided You validly elect to continue Your
medical benefits in accordance with applicable law.
D. No Duty to Mitigate. In no event shall You be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to You under this Agreement,
and such amount shall not be reduced, regardless of whether You obtain other employment or become
self-employed (except for the termination of Company-paid COBRA premiums as provided in Sections
5B, 5C and 6). Notwithstanding the foregoing, amounts provided under Section 5B, 5C and Section 6
will be reduced by amounts You are entitled to receive due to Your eligibility to receive severance
under any other Company plan, policy, or arrangement.
X. Xxxxxxxxx. If, within three (3) months preceding and twelve (12) months following
a Change of Control (the “Protection Period”) and during the Employment Period, the Company
or the successor entity to the Company terminates Your employment without Cause or You resign for
Good Reason, then, subject to Your compliance with the provisions of Section 8 and You executing
and not revoking a separation agreement and general release of claims in a form satisfactory to the
Company, You shall receive (in addition to the payments and benefits provided under Section 5A) the
following separation payments and/or benefits: (i) continued Base Salary for a period of one year
following Your termination date (the “Restricted Period” in the event You are entitled to
benefits under this Section 6A), (ii) pay You a lump sum payment equal to a pro-rated amount of
Your Target Bonus for the year in which the termination occurs, to be paid on the date bonuses are
paid to other executive officers of the Company, but in no event more than one year following Your
termination date, (iii) reimbursement for COBRA continuation coverage premiums to continue medical
benefits for You and Your eligible dependents for the Restricted Period (but, if further limited by
applicable law, the maximum permissible period) or, if earlier, until You become eligible for
substantially similar benefits from another employer, provided You validly elect to continue Your
medical benefits in accordance with applicable law, and (iv) all equity incentive awards granted on
or after the Effective Date will vest in full such that stock options, stock appreciation rights
and similar awards will vest and become exercisable as to 100% of the shares subject to such
awards, all restrictions on restricted stock and similar awards will lapse, and, with respect to
performance shares, performance units and similar awards, all performance goals or other vesting
criteria will be deemed achieved at target levels and all other terms and conditions met. The
payments and benefits set forth in this Section 6A shall be provided to You in lieu of any payments
and benefits to which You may be entitled to receive under Section 5B above.
B. Definition of Change of Control. For purposes of this Agreement, “Change of
Control” means the occurrence of any of the following:
(i) | Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 of said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or | ||
(ii) | The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; |
(iii) | The consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or consolidation; or | ||
(iv) | A change in the composition of the Company’s Board of Directors (the “Board”), as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (a) are directors of the Company, as applicable, as of the date hereof, or (b) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii), or (iii) or in connection with an actual or threatened proxy contest relating to the election of directors of the Company. |
D. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to You (i) constitute “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”) and (ii) but for this Section 6D, would be subject to the excise tax imposed by
Section 4999 of the Code, then Your severance and other benefits will be either: (i) delivered in
full, or (ii) delivered as to such lesser extent which would result in no portion of such severance
and other benefits being subject to excise tax under Section 4999 of the Code, whichever of the
foregoing amounts, taking into account the applicable federal, state and local income taxes and the
excise tax imposed by Section 4999, results in the receipt by You on an after-tax basis, of the
greatest amount of severance and other benefits, notwithstanding that all or some portion of such
severance and other benefits may be taxable under Section 4999 of the Code. Unless the Company and
You otherwise agree in writing, any determination required under this Section 6D will be made in
writing by the Company’s independent public accountants immediately prior to Change of Control (the
“Accountants”), whose determination will be conclusive and binding upon You and the Company
for all purposes. For purposes of making the calculations required by this Section 6D, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of Sections 280G and
4999 of the Code. The Company and You will furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a determination under this
Section. The Company will bear all costs the Accountants may reasonably incur in connection with
any calculations contemplated by this Section 6D. In the event the Accountants determine that this
Section 6D requires a reduction in Your severance or other benefits, You will be provided the
reasonable opportunity to determine the order in which severance and other benefits will be
reduced. If You fail to make an appropriate reduction election within the reasonable time period
determined by the Committee, in its sole discretion, the order of reduction will be determined by
the Committee.
A. Return of Materials. Upon the termination of Your employment for any reason, You
will return to the Company all of the Company’s property, including, but not limited to, keys,
passcards, credit cards, customer lists, rolodexes, tapes, software, computer files, marketing and
sales materials, and any other property, record, document or piece of equipment belonging to the
Company.
B. Restrictive Covenants. You acknowledge that the restrictions contained in this
Section 8B are reasonable and necessary to protect the legitimate business interests of the
Company, and will not impair or infringe upon Your right to work or earn a living after Your
employment with the Company ends.
10. Arbitration. You and the Company agree that any and all disputes arising out of
the terms of this Agreement, their interpretation, and any of the matters herein released, shall be
subject to binding arbitration in Englewood, Colorado before the American Arbitration Association
under its National Rules for the Resolution of Employment Disputes, supplemented by the Colorado
Rules of Civil Procedure. You and the Company agree that the prevailing Party in any arbitration
shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the
arbitration award. You and the Company hereby agree to waive their right to have any dispute
between them resolved in a court of law by a judge or jury. This Section will not prevent either
Party from seeking injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute. You and the Company will
each pay one-half of the costs and expenses of such arbitration, and each party will pay its own
counsel fees and expenses.
19. Governing Law. The laws of the State of Colorado shall govern this Agreement
(with the exception of its conflict of laws provisions).
To the Company: | Attn: Chief Executive Officer | |||
6400 X. Xxxxxxx’x Green Cir., Suite 1000 | ||||
Xxxxxxxxx, XX 00000 |
To Executive: at the last residential address known by the Company
Notice shall be deemed given and effective three (3) days after the deposit in the U.S. mail
of a writing addressed as above and sent first class mail, certified, return receipt requested, or
when actually received. Either Party may change the address to which notices shall be delivered or
mailed by notifying the other Party of such change in accordance with this Section.
o O o
QUOVADX, INC.: | |||||
By: | /s/ Xxxxxx X. Xxxxxx | ||||
Xxxxxx X. Xxxxxx | |||||
President and Chief Executive Officer | |||||
Xxxxx Xxxxxxxx: | |||||
/s/ Xxxxx Xxxxxxxx | |||||