Exhibit 10.08
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), made as of the 1st day of
October, 1999 (the "Effective Date"), by and between REALMED CORPORATION, an
Indiana corporation (the "Company") and Xxx Xxxx, an individual resident of
Indiana ("Executive").
WHEREAS, the Company desires to employ Executive as a Vice President
and Chief Technology Officer and Executive desires to be so employed on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Executive and the Company
including, without limitation, the promises and covenants of the parties set
forth herein, the parties hereto, intending to be legally bound, hereby agree to
as follows:
ARTICLE I
EMPLOYMENT
Section 1.1 Term of Employment. The term of Executive's employment
under this Agreement shall commence on October 1, 1999 and continue through
November 1, 2004, unless earlier terminated as provided in this Agreement. At
the end of the initial five year-one month term, this Agreement shall
automatically renew for consecutive two year terms unless either party hereto
gives written notice to the other of its intent to terminate this Agreement at
least sixty days prior to the end of the initial term or any renewal term (a
"Section 1.1 Termination").
Section 1.2 Duties and Responsibilities of Executive. Executive is
hereby employed as a Vice President and Chief Technology Officer. In his
capacity as a Vice President and Chief Technology Officer, Executive shall
report to the President of the Company, and shall conduct and perform such
additional services and activities as may be determined from time to time by the
President, the Chief Executive Officer and/or the Board of Directors of the
Company. Executive's authority from, and responsibility to, the Company shall at
all times be subject to the review and discretion of the President, Chief
Executive Officer and Board of Directors of the Company. Executive acknowledges
that he has a duty of loyalty to the Company and that Executive is committing to
a full time executive position. Executive shall not engage in, directly or
indirectly, any other business or activity that could materially and adversely
affect the Company's business or Executive's ability to perform his duties under
this Agreement; provided, however, that the Executive shall be free to
participate in civic and charitable activities so long as such activities do not
materially interfere with his duties and responsibilities hereunder.
Section 1.3 Compensation. For services to be rendered by
Executive under this Agreement, the Company shall pay Executive as follows:
(a) Base Salary. For the period beginning on October 1,
1999, and ending October 30, 1999, Executive shall be
paid $1,000 per month. Thereafter, Executive shall be
paid a minimum annual gross salary of one hundred
twenty-five thousand dollars ($125,000), payable
biweekly. Further, upon the closing of the Company's
initial public offering ("IPO"), Executive's annual
gross salary shall be increased to $150,000. At no
time during the term of this Agreement shall
Executive's base salary be decreased from the amount
of the base salary then in effect. Executive's base
salary shall be earned and accrued on a per diem
basis.
(b) Bonus. The Executive shall be paid a targeted
quarterly bonus of $15,000 on January 31, 2000, April
30, 2000, July 31, 2000 and October 31, 2000.
Commencing upon the IPO, the Executive's bonus target
shall be increased to $20,000 per quarter and shall
be payable on the same dates as set forth above in
this Section 1.3(b). During the first four quarters
of Executive's employment with the Company,
Executive's bonuses shall be guaranteed.
Section 1.4 Benefits.
(a) Vacation. Executive shall be entitled to four weeks
paid vacation during each calendar year during the
term of this Agreement. Vacation not used during any
calendar year may not be carried forward to the next
year.
(b) Life, Disability and Retirement Programs. Executive
shall be entitled to participate in any life,
disability and retirement programs which may from
time to time be offered generally to all of the other
employees of the Company.
(c) Group Insurance. Executive shall be entitled to
participate in any group health, dental, and vision
insurance programs which may from time to time be
offered generally to all of the other employees of
the Company.
Section 1.5 Stock Options. Executive shall be granted an option to
purchase 100,000 shares of the Company pursuant to that certain 1999 Stock
Option and Incentive Plan (the "Plan") and that certain Stock Option Agreement
dated as of October 1, 1999 ("Option Agreement") (such options and shares to be
subject to such terms and conditions as set forth in the Option Agreement). In
addition, Executive shall be entitled to participate in any other incentive and
stock option plans which may from time to time be offered generally to all of
the other employees of the Company.
Section 1.6 Business Expenses. Executive shall be entitled to
reimbursement of all ordinary and necessary business expenses reasonably
incurred by him for business travel (including reasonable moving expenses),
communications, entertainment and meals in connection with the performance of
Executive's duties under this Agreement in accordance with the Company's
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policies for reimbursement of business expenses in effect from time to time as
reasonably approved by the Board of Directors of the Company.
ARTICLE II
COVENANTS OF EXECUTIVE
Section 2.1 Confidential Information. Executive acknowledges that in
connection with his employment by the Company, Executive may be given access to,
generate, or otherwise come into contact with or become aware of certain
proprietary, secret and/or confidential information and materials which are the
property of or relate to (a) the Company, and/or (b) the Company's business of
electronic health-care industry claims resolution procedures, customers, clients
or suppliers (collectively, "Confidential Matters"). Confidential Matters shall
include, without limitation, all information and materials created or developed
by, provided to or otherwise disclosed to Executive in connection with
Executive's employment by the Company (excepting only information and materials
already known to the public), including, without limitation, all of the
following:
(a) trade secrets, know-how and all other business,
financial or technical information which gives or
could give the Company a competitive advantage;
(b) software used by the Company (including source code
and object code) and associated layouts, templates,
processes, documentation, databases, designs and
techniques, and all modifications thereto
(collectively, "Confidential Software");
(c) the names and addresses of the Company's past,
present or prospective customers or clients and all
documents, information and materials which concern or
relate to such customers or clients, regardless of
whether such documents, information and materials
were supplied or produced by the Company or such
customers or clients;
(d) inventions, improvements, innovations, research and
development, software and all other discoveries or
work product created or used by the Company,
including those which are conceived or developed by
Executive alone or with others in connection with
Executive's employment by the Company, or which are
conceived or developed by Executive after termination
of such employment by using Confidential Matters; and
(e) information concerning the Company's products,
services, systems, methods, employees, technology,
suppliers, licensors, affiliates, financing sources,
profits, revenues, financial condition and affairs,
marketing plans or programs, and business strategies
and practices.
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Executive acknowledges and agrees that Confidential Matters are the
property of the Company and that Executive shall not acquire any ownership
rights in Confidential Matters. Executive shall:
(a) use Confidential Matters solely in connection with
Executive's employment by the Company; and
(b) hold Confidential Matters in trust and confidence,
and use all reasonable means to assure that they are
not directly or indirectly disclosed to or copied by
unauthorized persons or used in an unauthorized
manner, both during and after Executive's employment
by the Company.
Executive shall not load, install, copy, store or otherwise retain any
Confidential Software on any computer or other device which is not Company
property without first obtaining the Company's written consent.
To the extent that Executive creates or develops any Confidential
Matters, Executive shall:
(a) promptly disclose them to the Company; and
(b) at the Company's request, assign them to the Company
and execute all documents and do all things necessary
to assist the Company in obtaining such patent,
copyright, trademark, trade secret and/or other
protection as the Company in its sole discretion
deems necessary or appropriate, with the Company to
pay all resulting expenses.
Upon termination of Executive's employment with the Company for any
reason, Executive shall delete all Confidential Matters from the memory of any
computer belonging to Executive and shall turn over to the Company (a) all
documents and other materials (including, without limitation, all tapes, floppy
disks and other forms of electronic storage media) which constitute, contain or
are derived from Confidential Matters; and (b) all other documents, notes, work
product and other materials connected with or arising out of Executive's
employment with the Company.
Section 2.2 Non-solicitation of Customers. During the term of his
employment with the Company under this Agreement, and for a period of two years
(which shall be extended by the length of any period during which Executive is
in violation of this Section 2.2) after any termination of the Executive's
employment for any reason other than any termination "without Cause", Executive
shall not (on Executive's own behalf or that of any other person or entity)
directly or indirectly sell or otherwise provide or solicit the sale or
provision of any product, license, process or service which directly or
indirectly competes with any product, license, process or service of the Company
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to any person or entity which was, at the time of termination of Executive's
employment, a customer or client of the Company.
Section 2.3 Non-Solicitation of Employees. During the term of
Executive's employment with the Company under this Agreement, and for a period
of two years (which shall be extended by the length of any period during which
Executive is in violation of this Section 2.3) after any termination of
Executive's employment with the Company for any reason other than any
termination "without Cause" (the "Non-solicitation Period"), Executive shall
not, directly or indirectly, through one or more intermediaries or otherwise,
hire, employ, induce, solicit for employment, or assist others in hiring,
employing, inducing or soliciting for employment any individual who is at any
time during the Non-solicitation Period an employee of the Company.
Section 2.4 Injunctive Relief. Executive acknowledges that his actual
or threatened breach of any provision of Article II of this Agreement will cause
or threaten irreparable injury to the Company that cannot adequately be measured
in money damages, and that the Company shall be entitled to obtain injunctive
relief with respect to any such actual or threatened breach by Executive.
Injunctive relief shall be in addition to and not in lieu of any other available
remedies.
ARTICLE III
TERMINATION OF EMPLOYMENT
Section 3.1 Termination by Company. In addition to termination pursuant
to Section 1.1, Executive's employment under this Agreement may be terminated
during the term of this Agreement as follows:
(a) "for Cause," which for purposes of this Agreement
shall mean that the Executive shall have:
(i) committed an act of fraud, embezzlement
or theft in connection with his duties
under this Agreement at any time subsequent
to the date of this Agreement;
(ii) intentionally inflicted material damage to
any material asset of the Company;
(iii) breached any provision of Article II of
this Agreement;
(iv) engaged in the illegal use of drugs during
the term of this Agreement or been under the
influence of alcohol during the performance
of his duties under this Agreement, which
has or may have a material adverse effect on
the business or operations of the Company or
on the reputation of the Company or the
Executive;
(v) been convicted of any crime constituting
a felony under applicable law, other than a
felony related to the operation of a motor
vehicle;
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(vi) committed any act of dishonesty against the
Company;
(vii) committed any intentional tort against the
Company or any employee of the Company;
(viii) committed any act of gross insubordination,
which has or may have a material adverse
effect on the business or operations of the
Company or on the reputation of the Company
or the Executive; or
(ix) resigned for any reason.
(b) "without Cause," which for purposes of this Agreement
shall mean that the Executive shall have:
(i) ceased employment due to Executive's death
or, subject to any applicable federal, state
or local laws (including, but not limited
to, the Americans With Disabilities Act),
any disability which renders Executive
incapable of performing his duties hereunder
for more than one hundred eighty calendar
(180) days; or
(ii) for any reason not constituting "for Cause"
(as defined above) following a determination
by the Board of Directors of the Company to
terminate Executive's employment; provided,
however, that a Section 1.1 Termination
shall not constitute a termination "without
Cause".
Section 3.2 Severance. For purposes of this Agreement, Executive's
entitlement to any severance payments upon termination of his employment shall
be subject to Executive entering into RealMed's standard waiver and release
agreement and shall be as set forth below:
(a) If Executive's employment is terminated by the Company
"without Cause" pursuant to Section 3.1(b), then (i)
Executive shall be entitled to severance pay of 50%
of the sum of Executive's annual rate of base salary
then in effect and Executive's targeted bonus for
such fiscal year, payable in a lump sum on the date
of such termination; and (ii) all of Executive's
rights to purchase common stock of the Company
pursuant to a Regular Option (as defined in the
Option Agreement) or any Project Option (as
defined in the Option Agreement) that has a
Technology Milestone Date (as defined in the Option
Agreement) which is subsequent to the termination
date shall vest, (iii) the Company shall pay
Executive a sum equal to the amount necessary for
Executive to pay the Executive's COBRA payments for
the six (6) months following Executive's
termination date; (iv) the Company shall pay
Executive a sum equal to Executive's per diem
portion of Executive's annual base salary multiplied
by the unused vacation days earned by Executive in
the year of the termination;
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(b) In the event of a Section 1.1 Termination, a
termination of Executive "for Cause," then Executive
shall not receive any severance pay (and Executive
shall forfeit all unused vacation time and any stock
options which have not then vested), unless, and to
the extent that, some severance pay is approved in
writing by the Chief Executive Officer of the Company
in his sole discretion. In the event the Executive
shall provide thirty (30) days prior written notice
of his intent to resign, the Company may accept such
resignation effective as of any date during such
thirty day period as the Company deems appropriate,
provided that the Executive shall receive from the
Company the per diem portion of Executive's annual
salary and be entitled to participate at the Company's
expense in any Company sponsored benefit programs in
which he was a participant as of the effective date
of his resignation for the duration of such thirty day
period. Notwithstanding the foregoing, Executive
shall receive the per diem portion of such annual base
salary that is accrued but unpaid up to the date of
any termination "for Cause."
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes and
withholding as shall be required pursuant to any applicable law, rule or
regulation.
Section 4.2 Attorneys' Fees. If either party shall institute litigation
or arbitration to enforce any of its rights under this Agreement, the prevailing
party shall be entitled to recover from the other party the prevailing party's
reasonable attorneys' fees and costs incurred in any such litigation or
arbitration.
Section 4.3 Notice. For purposes of this Agreement, all communications
including, without limitation, notices, consents, requests or approvals,
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or five (5) business days after having been
mailed by United States registered mail or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention of the
General Counsel of the Company) at its principal executive office or to
Executive at his principal residence, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except the
notices of change of address shall be effective only on receipt.
Section 4.4 Governing Law. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Indiana, without giving effect to the principles of conflict of
laws of such State. Any and all actions concerning any dispute arising under
this Agreement shall be filed and maintained only in a state or federal court
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sitting in the State of Indiana, and each party hereby consents and submits to
the jurisdiction of such state or federal court.
Section 4.5 Validity. It is not the intent of any party hereto to
violate any public policy of any jurisdiction in which this Agreement may be
enforced. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal.
Section 4.6 Entire Agreement. This Agreement supersedes any other
agreements, oral or written, between the parties with respect to the subject
matter hereof, and contains all of the agreements and understandings between the
parties with respect to the employment of the Executive by the Company. Any
waiver or modification of any term of this Agreement shall be effective only if
it is set forth in a writing signed by all parties hereto.
Section 4.7 Successors and Binding Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any Successor of or to the
Company, but shall not otherwise be assignable or
delegable by the Company. "Successor" shall mean any
successor in interest, including, without limitation,
any entity, individual or group of persons acquiring,
directly or indirectly all or substantially all of
the business or assets of the Company, as the case
may be, whether by sale, merger, consolidation,
reorganization or otherwise.
(b) The Company shall require any Successor to agree at
the time of becoming a Successor to perform this
Agreement to the same extent as the original parties
would be required if no succession had occurred.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal
representatives, executors, administrators, heirs,
distributes and legatees.
(d) This Agreement is personal in nature and neither of
the parties shall, without the consent of the other,
assign, transfer or delegate this Agreement or any
rights or obligations hereunder except as expressly
provided in this Section 4.7.
Section 4.8 Captions. The captions in this Agreement are solely
for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
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Section 4.9 Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and the Company. No waiver by a party
hereto at any time of any breach by another party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provision or conditions at the
same or at any prior or subsequent time.
Section 4.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
"Company" "Executive"
RealMed Corporation /s/ Xxx Xxxx
Xxx Xxxx
By: /s/ Xxxxxx X. Xxxxx
Print Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
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