EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 17, 2000 ("Commencement Date") by and
between CareAdvantage, Inc. ("Company") and Xxxxxxxxxxx Xxxxx ("Executive").
1. Employment. Company agrees to employ Executive, and Executive agrees
to be so employed, in the capacity of Senior Vice President and Chief Financial
Officer, and shall have the duties customary to such office and such other
duties as the Chief Executive Officer shall reasonably determine.
2. Time and Efforts. The Executive shall: (a) render services as the
Senior Vice President Chief Financial Officer of the Company, (b) perform
duties consistent with such title and such other related duties, not
inconsistent with such title, as the Chief Executive Officer or Board of
Directors of the Company shall reasonably request, (c) not engage in any other
business activity and (d) devote all the Executive's business time, attention,
skill and best efforts exclusively to the Company's duties hereunder and the
business and affairs of the Company, which duties shall include having the
Executive present in the Company's offices at Iselin, New Jersey for four (4)
days per week. The Company shall have the power to direct, control and
supervise the duties to be performed hereunder, the means and the manner of
performing said duties, and the terms and time for performing said duties.
3. Compensation.
3.1. Salary. Commencing upon the Commencement Date, the Company
shall pay Executive salary for his services at an annual rate of
$210,000. This amount shall be paid in accordance with the Company's
normal payroll practices. The Company shall deduct and withhold from
any and all payments required to be made to the Executive under this
Agreement any and all Federal, state, local and other taxes that the
Company determines are required to be withheld in accordance with
the Internal Revenue Code of 1986, as amended from time to time (or
any corresponding provisions of succeeding law), together with the
rules and regulations promulgated thereunder, and any other
applicable statutes and regulations from time to time in effect
(including, without limitation, applicable Federal and state income
taxes, unemployment taxes and FICA contributions) and shall pay over
such amounts to the Federal, state or local government, as
applicable.
3.2. Stock Options. The Company shall provide the Executive with
stock options in accordance with Attachment A.
3.3. Benefits. The Company shall provide the Executive with the
benefits as described in Attachment B.
3.4. Expense Reimbursement. The Company shall reimburse Executive
for all reasonable and customary out-of-pocket expenses incurred in
carrying out his duties under this Agreement, including, but not
limited to, reasonable out-of-pocket living expenses incurred while
Executive is residing in the Iselin, New Jersey area and costs for
commuting between his home in Bethel, Connecticut and Iselin, New
Jersey. Executive shall present to the Company from time to time an
itemized account of such expenses in any form required by the
Company.
3.5. Severance. In the event the Company terminates this Agreement
in accordance with Section 6, then Executive shall receive salary in
accordance with Section 3.1 for six (6) months after the date of
termination; provided, however, that in the event the Company
terminates this Agreement in accordance with Section 6 after a
Change of Control as defined in Section 2 of Attachment A, then in
lieu of the foregoing, Executive shall receive salary in accordance
with Section 3.1 for one (1) year after the date of termination.
4. Term. Except as otherwise provided, including without limitation
Section 6 hereof, this Agreement shall be for a one (1) year term and shall be
renewed automatically thereafter for successive one-year terms, unless
terminated as provided hereunder. For purposes of this Agreement, "Term" shall
mean the period commencing on the Commencement Date and ending on the date this
Agreement terminates.
5. Indemnification; Insurance; Litigation.
5.1 Indemnification. The Company will indemnify Executive to the
fullest extent permitted by law (or the certificate of incorporation
or by-laws of the Company, whichever affords the greatest protection
to Executive) against all costs, charges and expenses whatsoever
incurred or sustained by him or his legal representatives in
connection with any action, suit or proceeding to which he may be
made a party by reason of his being or having been at any time
(before, during or after the Term) a director, officer, employee or
agent of the Company, or a consultant or advisor to the Company, or
by reason of any action at any time taken by him on behalf of the
Company.
5.2 Advancement of Expenses. Expenses and costs (including a
reasonable retainer and advance against disbursements) incurred by
Executive in connection with any matter with respect to which he is
entitled to indemnification shall be paid by the Company in advance
of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of Executive to repay such
amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Company as authorized by this Section 5.
5.3 Indemnification Not Exclusive. The provisions of this Section 5
shall not limit or restrict in any way the power of the Company to
indemnify or advance expenses and costs to Executive in any other
way permitted by law or be deemed exclusive of, or invalidate, any
right to which Executive may be entitled under any law, provisions
of the Company's certificate of incorporation or by-laws, agreement,
vote of stockholders or disinterested directors or otherwise, both
as to action in Executive's capacity as an officer, director,
consultant, advisor, employee or agent of the Company and as to
action in any other capacity while holding any such position.
5.4 Accrual of Claims; Successors. The indemnification provided or
permitted under this Section 5 shall apply in respect of any
expense, cost, judgment, fine, penalty or amount paid in settlement,
whether or not the claim or cause of action in respect thereof
accrued or arose before or after the effective date of this Section
5. Executive's indemnification under this Section 5 shall continue
after he shall have ceased to be a director, officer, consultant,
advisor, employee or agent and shall inure to the benefit of his
heirs, distributees, executors, administrators and other legal
representatives.
5.5 Insurance. The Company shall maintain, during the Term and for
six years thereafter, directors' and officers' liability insurance
covering Executive with respect to acts and omissions occurring
during the period of time commencing on the Commencement Date and
ending upon the conclusion of the Term ("D&O Insurance"), on terms
no less favorable to Executive than the most favorable terms of such
insurance (in terms of coverage) maintained in effect by the Company
at any time during the Term. The amount of the D&O Insurance during
the Term and for six years thereafter shall be equal to (i) at least
$3 million (the amount of coverage on the date of this Agreement) or
(ii) if the Company increases the amount of D&O Insurance during the
Term, the amount to which the D&O Insurance is so increased. The
Company shall use commercially reasonable efforts to obtain, as soon
as practicable after the date hereof, D&O Insurance with increased
limits of liability and lower deductibles than those in effect on
the date hereof.
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5.6 Litigation. In the event of any litigation or other proceeding
between the Company and Executive with respect to the subject matter
of, or the enforcement of rights under, this Agreement, the Company
shall reimburse Executive for all costs and expenses related to such
litigation or proceeding, including reasonable attorneys' fees and
expenses, provided that the litigation or proceeding results in
either a settlement requiring the Company to make a payment to the
Executive or a judgment in favor of Executive.
6. Termination Without Cause. Either party may without cause terminate
this Agreement at any time by notifying the other not less than sixty (60) days
prior to the date such termination is to become effective. Upon the Company's
notice, or receipt thereof, of the Executive's Termination Without Cause, the
Company agrees to pay the Executive his salary payable in accordance with
Section 3.1 at his residence set forth in Section 9.1 up until the date of the
effectiveness of such termination. The Executive agrees that he will, upon his
notice of termination, or receipt thereof, immediately vacate all offices of the
Company at Iselin, New Jersey and elsewhere.
7. Termination with Cause. The Company may for cause terminate this
Agreement at any time by notifying the Executive of such termination and the
cause therefor. For this purpose, "cause" shall include each of the following:
(a) death or prolonged disability as defined by the Company's
disability insurance policy;
(b) the Executive's refusal or other failure to perform any of the
Executive's duties hereunder after written notice thereof from
the Company and the Executive's failure to cure such
non-performance within ten (10) days of receipt thereof;
(c) the Executive's breach of this Agreement and failure to cure
such breach within ten (10) days of receipt of written notice
thereof from the Company;
(d) the Executive's commission of any act of dishonesty, fraud,
intentional material misrepresentation or moral turpitude in
connection with this employment, including, but not limited to,
misappropriation or embezzlement of any funds of the Company;
(e) the Executive's commission of any willful or intentional act
having the effect of injuring, in any material respect, the
reputation, business or business relationships of the Company;
(f) entering by the Executive of a plea of guilty or nolo
contendere to, or the conviction of the Executive for, a crime
(other than a routine traffic offense) which carries a
potential penalty of imprisonment for more than ninety (90)
days and/or a fine in excess of Ten Thousand Dollars ($10,000);
(g) the Executive's habitual abuse of alcohol, prescription drugs,
or controlled substances;
(h) the Executive's commission of any material and repeated act of
misconduct or material act of insubordination in connection
with his employment (it being acknowledged that mere
disagreement between the Company and the Executive, without
more, shall not constitute insubordination); or
(i) the repetition of any act or failure under subsections
referenced above, where such prior act or failure has
previously been cured, it being acknowledged and agreed by the
Executive that upon the occurrence of any such repetition, the
Executive shall not have a right to further notice and shall
not have an opportunity to cure.
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8. Confidentiality, Invention and Non-Compete Agreement. Simultaneously
with the execution of this Agreement, the parties shall execute the agreement
entitled "Confidentiality, Invention and Non-Compete Agreement."
9. Notices. All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
If to Company:
Chief Executive Officer
CareAdvantage, Inc.
000-X Xxxxx 0 Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
If to Executive:
00 Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
10. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the state of New Jersey.
11. Amendments. This Agreement may be amended only in writing, signed
by both parties.
12. Non-Waiver. A delay or failure by either party to exercise a right
under this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
13. Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of both parties and their respective successors
and assigns.
14. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original for all purposes.
IN WITNESS WHEREOF, Company has by its appropriate officers, signed and
affixed its seal and Executive has signed and sealed this Agreement.
CAREADVANTAGE, INC. XXXXXXXXXXX XXXXX
By:/s/ Xxxxx X. Xxxxx /s/ Xxxxxxxxxxx Xxxxx
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ATTACHMENT A
STOCK OPTIONS
1. Generally. Subject to approval by the Compensation Committee of the
Board of Directors, the Executive shall be granted an option to purchase 500,000
shares of the Company's Common Stock. Such options shall be issued from the
Company's Stock Option Plan ("Plan"), and to the maximum extent permissible
under the Internal Revenue Code of 1986, as amended (the "Code"), shall
constitute Incentive Stock Options under the Code.
2. Terms. The option shall contain those terms generally applicable to
options granted under the Plan, except options to purchase 100% of such shares
shall become fully exercisable in the event of a Change of Control of the
Company. For this purpose, "Change of Control" shall mean (i) a merger or
consolidation of the Company in a transaction in which the Company's
stockholders receive 50% or less of the vote or value of the new or continuing
corporation; (ii) the sale, exchange or other disposition of at least 50% of the
vote or value of the Company's stock in a single transaction; or (iii) the sale
of substantially all of the Company's assets.
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ATTACHMENT B
FRINGE BENEFITS
The Executive shall be entitled to the following fringe benefits:
1. vacation leave in the amount of 20 days per year.
2. other leave (sick leave, personal time, and holidays) in the amount
and on the same terms and conditions as provided to the senior management of the
Company;
3. medical insurance, life insurance, and participation in the
Company's 401(k) plan on the same terms and conditions as these benefits are
provided to the senior management of the Company; and
4. disability insurance (long- and short-term) on the same terms and
conditions as provided to senior management of the Company; and
5. such other benefits as may be made available generally to the senior
management of the Company.
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