EMPLOYMENT AGREEMENT
Exhibit
10.3
This
Employment Agreement (“Agreement”) is dated as of October 15, 2008,
by and between BPO Management Services, Inc., a Delaware corporation (the
“Company”), and Xxxxxx X. Xxxxxxx, an individual located at 0000 Xxxxx Xxxxx
Xxxx, Xxxxxx, Xxxxx 00000 (the “Employee”).
RECITALS
WHEREAS,
the Company, HealthAxis Inc., a Pennsylvania corporation (“HAXS”), and
Outsourcing Merger Sub, Inc., a Delaware corporation (“Merger Sub”), are parties
to that certain Agreement and Plan of Merger dated September 5, 2008 (the
“Merger Agreement”), pursuant to which it is expected that the Company and
Merger Sub will merge, the Company will become a wholly-owned subsidiary of
HAXS, HAXS will issue shares of its capital stock to the stockholders of the
Company, and HAXS will change its name to BPO Management Services, Inc. (the
surviving post-merger parent company is hereinafter referred to as “BPOMS”), all
as more particularly described in the Merger Agreement (the
“Merger”);
WHEREAS,
Employee currently serves as an executive officer of HAXS and is employed by
HAXS and Healthaxis, Ltd., a Texas limited partnership and wholly-owned
subsidiary of HAXS (“Healthaxis”) pursuant to an employment agreement dated
December 31, 2005 (together with all amendments thereto, the “Existing
Employment Agreement”);
WHEREAS,
it is a condition to closing of the Merger Agreement that the Company and the
Employee enter into this Agreement, the terms and provisions of which will
become effective and supercede the Existing Employment Agreement in the event of
the consummation of the Merger.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
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1.
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Employment.
From and after the date of closing and consummation of the Merger (the
“Effective Date”), the Company hereby agrees to employ the Employee as
Senior Vice President of Finance, and the Employee hereby accepts such
employment, on the terms and conditions set forth
below.
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As of the
Effective Date, Employee resigns Employee’s position as an executive officer of
HAXS, but will continue to be employed as otherwise provided in this
Agreement. To the extent Employee’s duties following the Effective
Date include service in an officer capacity at BPOMS, it is agreed that the
Employee will not be considered an executive officer of BPOMS unless expressly
designated as such by the BPOMS Board of Directors.
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2.
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Term
and Renewal. The term (“Term”) of this Agreement shall begin on the
Effective Date and shall end three years from the Effective Date or upon
termination of the Employee’s employment by the Company or by the Employee
in accordance with the terms of this
Agreement.
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3.
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Position
and Duties.
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(a)
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During
the Employment Period, the Employee shall serve as BPOMS Senior Vice
President of Finance with the following duties: responsible for developing
and maintaining overall corporate financial reporting controls and
procedures, consolidation of financial reporting systems, financial
analysis and support of corporate merger and acquisition activities, and
such other related duties as requested by the Board of Directors,
President or Chief Executive Officer of the Company. The Employee shall
report directly to the Chief Executive Officer and President of the
Company. Unless otherwise authorized by the Chief Executive Officer or
President of the Company, the Employee shall devote substantially all of
his working time, attention and energies during normal business hours
(other than absences due to illness or vacation) to the performance of his
duties for the Company and its affiliates and subsidiaries (hereafter
referred to as “affiliates”). Notwithstanding the above, the Employee
shall be permitted, to (i) serve on civic or charitable boards or
committees, and (ii) serve on boards of other companies provided that such
activities do not interfere with the Employee’s performance of his duties
for the Company and its affiliates. The Employee shall be
entitled to receive and retain all remuneration received by him from the
items listed in clauses (i) through (ii) of this
paragraph.
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(b)
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In
order to induce the Company to enter into this Agreement, Employee
represents and warrants to the Company that (i) Employee is not a party or
subject to any employment agreement or arrangement with any other person,
firm, company, corporation or other business entity other than the
Existing Employment Agreement; and (ii) Employee is subject to no
restraint, limitation or restriction by virtue of any agreement or
arrangement, or by virtue of any law or otherwise which would impair
Employee’s right or ability to enter the employ of the Company or to
perform fully his duties and obligations pursuant to this
Agreement.
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4.
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Place
of Performance. During the Employment Period, the initial location of
employment of the Employee shall be in Irving, Texas. The
Employee’s location of employment shall not be changed by a distance
greater than seventy five (75) miles without the Employee’s prior written
consent.
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5.
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Compensation
and Related Matters.
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(a)
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Base
Salary. During the Employment Period, the Company shall pay the Employee a
base salary (the “Base Salary”) at the rate of $150,000 per year. The Base
Salary shall be paid in approximately equal installments on a semi-monthly
basis in accordance with the Company’s customary payroll
practices. All references herein to “$” or “dollars”
shall mean US dollars. The Base Salary is subject to review and
increase on at least an annual basis, but in no event may the Base Salary
be reduced below the rate stated in this Setion
5(a).
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(b)
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Annual
Bonus. Commencing on January 1, 2009, for each 12 month calendar year
during the Term, the Employee shall be eligible to earn an annual cash
bonus (the “Annual Bonus”) in an such amount equal to 50% of the then
current Base Salary as shall be determined by the Board of Directors of
BPOMS (the “Board”) based on the achievement of Company, BPOMS, and other
affiliate goals and individual performance goals for the Employee as
established by the Board for each applicable calendar year, and except
that no Annual Bonus (or any pro-rated amount thereof for any Partial
Year) shall be accrued, due or payable or deemed earned by Employee if,
prior to the end of a calendar year, Employee voluntarily terminates his
employment with the Company or if the Company terminates Employee’s
employment for Cause as defined in this Agreement. The Board
shall establish objective and subjective criteria to be used to determine
the extent to which performance goals have been satisfied. The
Annual Bonus shall be prorated for any applicable partial calendar year
(each a “Partial Year”). Employee shall be entitled to
participate in other Company and BPOMS bonus/incentive plans that may be
adopted from time to time at a level and in a manner consistent with other
senior level employees.
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(c)
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Signing
Bonus. On the Effective Date, Employee shall immediately be
paid a one-time signing bonus in the amount of $27,500 (subject to normal
withholding) (the “Signing Bonus”). The Signing Bonus is in addition to,
and shall not be offset from, the Annual Bonus. If the Employee
voluntarily terminates his employment with the Company within the first
nine (9) months following the Effective Date without Good Cause (as
hereinafter defined), Employee shall refund to the Company a pro rata
portion (1/9th
of the net amount for each remaining month of the 9 month period) of the
net amount received by Employee (after all withholding) from the Signing
Bonus.
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(d)
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Transition
Bonus. On the date that 80% of the transition objectives
specified on Exhibit
A attached hereto are achieved, Employee shall immediately be paid
a one-time transition bonus in the amout of $25,000 (subject to normal
withholding) (the “Transition Bonus”). The Transition Bonus is in addition
to, and shall not be offset from, the Annual Bonus and is not refundable
to the Company under any
circumstances.
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(e)
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Equity
Compensation. On the Effective Date Employee shall receive an
award of 100,000 shares of restricted stock to be issued under the
Healthaxis Inc. 2005 Stock Incentive Plan (or any successor plan with
substantially similar terms, the “Plan”). The restricted stock
shall vest over the first three (3) years from the Effective Date in six
(6) increments of 16,667 shares on each six (6) month anniversary of the
Effective Date, and shall also be fully vested on a Change in Control (as
defined in the Plan) in any transaction occurring following the
Merger. Following the Effective Date, Employee shall be
entitled to additional equity awards in amounts and on terms consistent
with periodic awards to other senior management personnel. The numbers of
shares stated above are subject to adjustment for any reverse stock split
affected in connection with the
Merger.
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(f)
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Business,
Travel and Entertainment Expenses. The Company shall promptly reimburse
the Employee for all business, travel and entertainment expenses incurred
during the Employment Period with respect to the business or prospective
business of the Company, including American Airlines Admirals Club
membership, American Airlines Gold status and airline upgrades, as well as
professional and license fees (including CPA fees, continuing education
costs, etc. as applicable) consistent with past practices, all subject to
the Company’s expense reimbursement
policies.
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(g)
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Car
Allowance. A monthly car allowance of $550
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(h)
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Vacation
& PTO. During the Employment Period, the Employee shall be entitled to
four (4) weeks of paid vacation per year. Vacation not taken during the
applicable fiscal year shall be carried over to the next following fiscal
year provided that no vacation shall accrue during the time period that
Employee has accrued and unused vacation in excess of eight (8)
weeks. In addition, Employee shall be entitled to seven (7)
days of paid time off each year consistent with past Healthaxis practices
or as otherwise provided under the BPOMS standard PTO policy in effect at
a given time. All current Healthaxis vacation and PTO balances
as of the Effective Date will be carried forward and are not forfeited as
a result of the Merger.
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(i)
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Health,
401(k) and Incentive Benefit Plans. During the Employment Period, the
Employee (and his eligible spouse and dependents) shall be entitled to
participate in all health benefit plans and programs maintained by the
Company from time to time for the benefit of its employees, including,
without limitation, all medical, hospitalization, dental, disability,
accidental death and dismemberment, travel accident and life insurance
plans, programs and arrangements. These benefits shall not be reduced in
any material way from the levels currently provided by Healthaxis on the
Effective Date. In addition, during the Employment Period, the Employee
shall be eligible to participate in all 401 (k), pension, retirement,
savings and other employee benefit plans and programs maintained from time
to time by the Company for the benefit if its employees. These benefits
shall not be reduced in any material way from the levels currently
provided by Healthaxis on the Effective Date. All prior service
at Healthaxis shall be bridged with respect to any vesting, eligibility or
similar requirements under all Company benefit plans and Employee will
receive full credit for all periods of service at
Healthaxis.
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(j)
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Additional
Items. The Company shall provide the Employee with the
following additional items in connection with the performance of his
duties: laptop computer and mobile
telephone.
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6.
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Termination.
The Employee’s employment hereunder may be terminated during the
Employment Period under the following
circumstances:
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(a)
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Death.
The Employee’s employment hereunder shall terminate upon his
death.
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(b)
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Disability.
If, as a result of the Employee’s incapacity due to physical or mental
illness, the Employee qualifies for and is certified as eligible for
long-term disability benefits by the carrier under the then current
long-term disability plan as required herein to be maintained by the
Company (or any affiliate for the benefit of Company employees), then the
Company shall have the right to terminate the Employee’s employment
hereunder for “Disability.”
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(c)
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Cause.
The Company shall have the right to terminate the Employee’s employment
for “Cause.” For purposes of this Agreement, the Company shall have
“Cause” to terminate the Employee’s employment only upon the
Employee’s:
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(i)
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willful
gross misconduct or conviction of an indictable offense or a felony after
the Effective Date that, in either case, results in material and
demonstrable damage to the business or reputation of the Company or any of
its affiliates or which involves any crime or offense involving money or
other property of the Company or any of its affiliates;
or
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(ii)
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refusal
to perform, or willful breach or neglect of the performance of any of his
duties or obligations hereunder and continued failure to perform his
duties hereunder within five business days after the Company
delivers to him a written demand for performance that specifically
identifies the actions to be performed;
or
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Employment Agreement
– Page 4
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(iii)
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breach
of this Agreement by Employee;
or
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(iv)
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any
attempt by Employee to improperly secure any personal profit in connection
with the business of the Company or any of its affiliates;
or
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(v)
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chronic
alcoholism or drug addiction.
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Cause
shall not exist unless and until the Company has delivered to the Employee
written notice from the President or the Chief Executive Officer of the Company
specifying the particulars thereof in detail and unless and until the Company
has given the Employee ten (10) days in which to cure the underlying
breach, to the extent such breach is susceptible of cure.
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(d)
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Without
Cause. The Company shall have the right to terminate the Employee’s
employment hereunder without Cause by providing the Employee with a Notice
of Termination.
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(e)
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Change
of Control. The Company may elect to terminate the Employee’s employment
hereunder upon a Change of Control Event. A Change of Control Event means
any of the following: (1) the acquisition of BPOMS or the Company by
another entity or persons by means of any transaction or series of related
transactions (including, without limitation, any stock acquisition,
reorganization, merger or consolidation) other than a transaction or
series of transactions in which the holders of the voting securities of
BPOMS or the Company outstanding immediately prior to such transaction
continue to retain (either by such voting securities remaining outstanding
or by such voting securities being converted into voting securities of the
surviving entity), at least fifty percent (50%) of the total voting power
represented by the voting securities of BPOMS or the Company or such
surviving entity outstanding immediately after such transaction or series
of transactions, or (2) the sale of 80% or more of the assets of BPOMS or
the Company or the operating division of BPOMS to which Employee’s primary
duties relate.
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(f)
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Good
Reason. The Employee shall have the right to
terminate his employment for “Good Reason.” For
purposes of this Agreement, the Employee shall have “Good Reason” to
terminate his employment upon (each a “Good Reason
Event”):
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(i)
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a
reduction in the Employee’s then current Base Salary and such reduction is
not rescinded within 15 days after written notice from Employee that such
reduction in Base Salary constitutes grounds for termination for a Good
Reason Event; or
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(ii)
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the
failure of Company to pay any compensation, or otherwise provide any
benefits, due to the Employee in accordance with the terms of this
Agreement and such failure is not cured within 30 days after written
notice from Employee identifying such failure to make such payment or
benefit and stating that such failure constitutes grounds for termination
for a Good Reason Event;
or
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Employment Agreement
– Page 5
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(iii)
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a
material diminution of Employee’s responsibilities, or the assignment to
the Employee of duties materially inconsistent with the Employee’s
position, duties, and status with the Company as set forth in Section
3(a), if done without the Employee’s prior written consent and provided
such change is not rescinded by the Company within 30 days after written
notice from Employee specifying the changes described in this subparagraph
and a statement that such changes constitute grounds for termination for a
Good Reason Event; or
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(iv)
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the
Company moves the Employee’s principal place of employment by a distance
greater than seventy five (75) miles from the City of Irving, Texas, without the Employee’s
prior written consent and such action to move Employee is not rescinded
within 30 days after written notice from Employee stating that such change
of location constitutes grounds for termination for a Good Reason Event;
or
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(v)
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The
Company otherwise breaches this Agreement and such breach is not cured
within 10 days after written notice from Employee identifying such breach
and stating that such breach constitutes grounds for termination for a
Good Reason Event.
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The
Employee’s continued employment shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting a Good Reason
Event hereunder; however, a claim that a Good Reason Event has occurred shall be
deemed waived, even if such Good Reason Event has occurred, if not asserted in
writing by the Employee to the Company within 30 days of Employee’s actual
knowledge of the occurrence of such Good Reason Event.
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7.
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Termination
Procedure.
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(a)
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Notice
of Termination. Any termination of the Employee’s employment by the
Company or by the Employee during the Employment Period (other than
pursuant to Section 6(a)) shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice indicating the specific termination
provision in this Agreement relied upon and setting forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under that
provision.
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(b)
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Date
of Termination. “Date of Termination” shall
mean:
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(i)
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if
the Employee’s employment is terminated by his death, the date of his
death,
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(ii)
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if
the Employee’s employment is terminated pursuant to Section 6(b), thirty
(30) days after the date on which the Notice of Termination was
transmitted to the Employee (provided that the Employee does not return to
the substantial performance of his duties on a full-time basis during such
thirty (30) day period), and
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(iii)
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if
the Employee’s employment is terminated for any other reason, the date on
which a Notice of Termination is given or any later date (within thirty
(30) days after the giving of such notice) set forth in such Notice of
Termination.
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Employment Agreement
– Page 6
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8.
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Compensation
upon Termination or During Disability. In the event the Employee is
terminated for Disability or his employment terminates during the
Employment Period, the Company shall provide the Employee with the
payments and benefits set forth below. The Employee acknowledges and
agrees that the payments set forth in this Section 8 (other than the
Accrued Obligations as hereinafter defined) constitute liquidated damages
for termination of his employment during the Employment
Period.
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(a)
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Termination
by Company Without Cause or Due to a Change of Control Event or by the
Employee for Good Reason. If the Employee’s employment is terminated by
the Company without Cause (other than Disability) or the Company elects to
terminate Employee’s employment due to a Change of Control Event or the
Employee elects to terminate his Employment for a Good Reason
Event:
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(i)
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the
Company shall pay to the Employee, on or before the Date of Termination, a
payment equal to all accrued and unpaid Base Salary and accrued unpaid
vacation pay through the Date of Termination and the Company shall have no
obligation to pay Base Salary or any other compensation for the remainder
of the Employment Period;
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(ii)
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the
Company shall, consistent with past practice, reimburse the Employee
pursuant to Section 5(f) for business expenses incurred but not paid prior
to such termination of
employment;
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(iii)
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the
Company shall pay to the Employee severance pay in an amount equal to the
sum of (x) an amount equal to one (1) full year of his then current Base
Salary; plus (y) a portion of the Annual Bonus amount prorated from
January 1 of the year in which the termination occurs through the Date of
Termination. The determination of the prorated Annual Bonus
amount shall be based on a negotiated amount to be mutually agreed upon in
good faith between Employee and BPOMS as the likely Annual Bonus amount
that would have been earned for the full year considering progress made as
of the Termination Date toward achievement of the Company, BPOMS, and
other affiliate goals and individual performance goals for the Employee as
established by the Board for the current calendar
year;
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(iv)
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all
outstanding unvested equity awards, including unvested restricted stock
and unvested stock options, shall be automatically 100% vested on the
Termination Date. In addition, Employee shall have three (3) years from
the Termination Date to elect to exercise all of his outstanding stock
options or similar awards, including all such awards vested prior to the
Termination Date, and all such awards that become vested on the
Termination Date;
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(v)
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Employee’s
(and Employee’s spouse/dependents) then current health, dental and life
insurance benefits shall be continued at the Company’s expense for a
period of up to one (1) year. In the event these plans may not
be continued by the terms of the plan, then the Company will reimburse
Employee for these expenses during the period for electing COBRA or
purchasing an individual plan that is similar to the Company
plan. These benefits may be terminated earlier in the event
Employee becomes eligible for coverage under a subsequent employer’s
plan;
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Employment Agreement
– Page 7
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(vi)
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at
Employee’s request, the Company will provide employee with up to $2,000
per month for a maximum of nine (9) months to cover the actual cost of
outplacement/search firm services from a firm selected by
Employee.
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(vii)
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the
Employee shall be entitled to any other rights, compensation and/or
benefits as may be due to the Employee in accordance with the terms and
provisions of any written agreements, plans or programs of the
Company.
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The
payments and benefits provided for as subclause 8(a)(i) and subclause 8(a)(ii)
above are hereinafter referred to as the “Accrued
Obligations.”
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(b)
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Termination
by the Company for Cause or Termination by Employee Without Good Reason.
If the Employee’s employment is terminated by the Company for Cause or by
the Employee without Good Reason, then the Company shall provide the
Employee with his Accrued Obligations and shall have no further obligation
to the Employee hereunder except for the benefits provided under any stock
option grants and any other agreements, plans or programs of the Company
and, notwithstanding any provision in this Agreement to the contrary, no
Annual Bonus shall be due or payable or deemed earned or accrued. If the
Employee’s employment is terminated by the Company for Cause or by the
Employee without Good Reason, all outstanding unvested equity awards,
including unvested restricted stock and unvested stock options, shall be
forfeited if and as applicable under the specific
award. Employee shall have three (3) years from the Termination
Date to elect to exercise all of his outstanding fully vested stock
options or similar awards which have grant dates prior to the Effective
Date. For all fully vested stock options or similar awards with
grant dates on or after the Effective Date, employee shall have the
post-termination exercise rights as contained in the specific
award.
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(c)
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Disability.
During any period that the Employee fails to perform his duties hereunder
as a result of incapacity due to physical or mental illness (“Disability
Period”), the Employee shall continue to receive his full Base Salary set
forth in Section 5(a) until his employment is terminated pursuant to
Section 6(b). In the event the Employee’s employment is terminated for
Disability pursuant to Section 6(b), the Company shall pay the Accrued
Obligations and Annual Bonus prorated through the Date of Termination and
shall have no further obligations to the Employee hereunder except to the
extent of disability benefits or other employee benefit plans and stock
option grants otherwise available to Employee and except for Accrued
Obligations and prorated Annual Bonus as expressly provided for herein. If
the Employee’s employment is terminated for Disability pursuant to Section
6(b), all outstanding unvested equity awards, including unvested
restricted stock and unvested stock options, shall be automatically 100%
vested on the Termination Date. In addition, Employee shall have three (3)
years from the Termination Date to elect to exercise all of his
outstanding stock options or similar awards, including all such awards
vested prior to the Termination Date, and all such awards that become
vested on the Termination
Date.
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(d)
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Death.
If the Employee’s employment is terminated by his death, the Company shall
pay the Accrued Obligations and Annual Bonus prorated through the Date of
Termination and shall have no further obligations hereunder except for any
benefits otherwise available to Employee or his family under insurance,
stock option grants or other employee benefit plans. If the
Employee’s employment is terminated by his dealth, all outstanding
unvested equity awards, including unvested restricted stock and unvested
stock options, shall be automatically 100% vested on the Termination Date.
In addition, Employee’s executor or successor in interest to these rights
shall have three (3) years from the Termination Date to elect to exercise
all of his outstanding stock options or similar awards, including all such
awards vested prior to the Termination Date, and all such awards that
become vested on the Termination
Date.
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Employment Agreement
– Page 8
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(e)
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Full and Final Settlement. The Employee
acknowledges and agrees that the payments and agreements described in this
Section 8 (other than the Accrued Obligations) shall be in full and final
satisfaction of all claims which the Employee may have against the Company
and all of its affiliates arising from the termination of the Employee’s
employment pursuant to any statutes or common law Upon
compliance by the Company with this Section 8, the Employee shall not be
entitled to pursue any legal action of any kind for any additional payment
or notice required to be
given.
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9. Confidential
Information.
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(a)
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Confidential
Information. Except as may be required or appropriate in connection with
his carrying out his duties under this Agreement, the Employee shall not,
without the prior written consent of the Company or as may otherwise be
required by law or any legal process, or as is necessary in connection
with any adversarial proceeding against the Company or any of its
affiliates (in which case the Employee shall cooperate with the Company in
obtaining a protective order at the Company’s expense against disclosure
by a court of competent jurisdiction), communicate, to anyone other than
the Company and those designated by the Company or on behalf of the
Company in the furtherance of its business or to perform his duties
hereunder or to the Employee’s legal and financial advisors, any trade
secrets, confidential information, knowledge or data relating to the
Company, BPOMS, or any of their respective affiliates or any
businesses or investments of the Company or any affiliates, obtained by
the Employee during the Employee’s employment by the Company that is not
generally available public knowledge (other than by acts by the Employee
in violation of this Agreement). For purposes of this
Agreement, “confidential information” shall not
include: information which is or becomes generally available to
the public other than as a result of a disclosure by the Employee in
violation of this Agreement or any other agreement. Any
unintentional disclosures or any disclosures made by Employee in good
faith in furtherance of the business as provided above shall not be
grounds for termination for Cause unless such disclosure was due to
willful gross misconduct as contemplated under Section
6(c).
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(b)
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Injunctive
Relief. In the event of a breach or threatened breach of this Section 9,
the Employee agrees that the Company and its affiliates shall be entitled
to injunctive relief in a court of appropriate jurisdiction to remedy any
such breach or threatened breach, the Employee acknowledges that damages
would be inadequate and
insufficient.
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Notwithstanding
the foregoing, to the extent of any conflict between the provisions of this
Section 9 and the provisions of a mutually acceptable Employee Proprietary
Information and Inventions Agreement to be entered into between the Company and
the Employee, the terms of the latter agreement shall govern.
Employment Agreement
– Page 9
10. Restrictive
Covenants.
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(a)
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Non-Competition. During
his employment with the Company (“Employment”), the Employee agrees not
to:
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(i)
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Undertake
any planning for any outside business activity that is competitive with
the Company or its affiliates;
or
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(ii)
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Directly
or indirectly own any interest in, manage, control, participate in
(whether as an officer, director, employee, partner, agent, representative
or otherwise), consult with, render services for, or in any
manner engage in any business directly competing with the Company or its
affiliates and engaged in such business anywhere within any state,
possession, territory or jurisdiction of the United States of
America.
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The
ownership of any of the following securities by Employee shall be deemed not to
violate this Section 10(a): if Employee owns beneficially or of
record in the aggregate less than five percent (5%) of any security which is
publicly traded on a national securities exchange or actively traded in a
recognized over-the-counter market.
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(b)
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Non-Solicitation. During
the period commencing on the Effective Date of this Agreement and
continuing until the first (1st) anniversary of the date when the
Employee's Employment is terminated for any reason the Employee shall not
directly or indirectly, personally or through others, solicit or attempt
to solicit (on the Employee's own behalf or on behalf of any other person
or entity) either (i) the employment of any employee of the Company or any
of the Company's affiliates or (ii) the business of any customer of the
Company or any of the Company's affiliates with whom the Employee had
contact during his
Employment.
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(c)
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Non-Disclosure. The
Employee shall have entered into a mutually acceptable form of Employee
Proprietary Information and Inventions Agreement with the
Company.
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(d)
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Injunctive
Relief. The Employee acknowledges and agrees that his failure to perform
any of his covenants in this Section 10 would cause irreparable injury to
the Company and cause damages to the Company that would be difficult or
impossible to ascertain or quantify. Accordingly, without limiting any
other remedies that may be available with respect to any breach of this
Agreement, the Employee agrees that the Company may seek an injunction to
restrain any breach of this Section
10.
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(e)
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Survival. The
covenants in this Section 10 shall survive any termination or expiration
of this Agreement and the termination of the Employee's Employment with
the Company for any reason.
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Employment Agreement
– Page 10
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11.
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Successors;
Binding Agreement. No rights or obligations of the Employee
under this Agreement may be assigned or transferred by the Employee other
than his rights to payments or benefits hereunder, which may be
transferred only by will or the laws of descent and distribution. Upon the
Employee’s death, this Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee’s
beneficiary or beneficiaries, personal or legal representatives, or
estate, to the extent any such person succeeds to the Employee’s interests
under this Agreement. If the Employee should die following his Date of
Termination while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts unless otherwise provided
herein shall be paid in accordance with the terms of this Agreement to
such person or persons so appointed in writing by the Employee, or
otherwise to his legal representatives or estate. The Company
shall be permitted to assign this Agreement and its rights, together with
its obligations, hereunder, in connection with any sale, transfer or other
disposition of all or substantially all of the assets acquired in the
acquisition, whether by merger, consolidation, reorganization, or
otherwise, provided the assignee agrees to accept such assignment and
assumes all obligations of the Company herein. Subject to the
preceding provisions of this section 11, the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors, and
assigns.
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12.
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Notice.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally
or two (2) business days after sending by certified or registered mail,
return receipt requested, postage prepaid, addressed as
follows:
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If to the
Employee: At his residence address most recently filed with the
Company.
If to the
Company:
0000 X.
Xxxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
Tel.:
(000) 000-0000
Fax
: (000) 000-0000
with a
copy to:
Xxxx X.
Xxxxxxx, Esq.
Xxxxxxx
& Xxxxxx
00000
XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx,
XX 00000
Tel : 000
000 0000
Fax: 000
000 0000
Email:
xxxxxxxx@xxxxxxxxxxxxx.xxx
or to
such other address as any party may have furnished to the others in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
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13.
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Miscellaneous.
No provisions of this Agreement may be amended, modified, or waived unless
such amendment or modification is agreed to in writing signed by the
Employee and by a duly authorized officer of the Company, and such waiver
is set forth in writing and signed by the party to be charged. No waiver
by either party hereto at any time of any breach by the other party hereto
of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. The respective
rights and obligations of the parties hereunder of this Agreement shall
survive the Employee’s termination of employment and the termination of
this Agreement to the extent necessary for the intended preservation of
such rights and obligations. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of Texas without regard to its conflicts of law
principles. Each party hereto
hereby submits itself to the jurisdiction of the courts located in
the State of California and in Orange
County, in respect of all actions
arising out of or in connection with the interpretation or enforcement of
this Agreement, waives any argument that venue in such forums is not
convenient and agrees that any actions initiated by such party shall be
venued in such forums. For purposes of this Agreement,
all references in this Agreement to the “Company” shall mean the Company,
BPOMS, Healthaxis, Ltd. or other entity within the
BPOMS consolidated group of companies that constitutes the
employer of record from time to time, it being understood and agreed that
benefits and compensation hereunder may be paid and provided by different
entities within the consolidated company from time to
time.
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Employment Agreement
– Page 11
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14.
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Validity.
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
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15.
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Counterparts.
This Agreement may be executed in one or more counterparts and by
facsimile, each of which shall be deemed to be an original but all of
which together will constitute one and the same
instrument.
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16.
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Entire
Agreement; Conditional Effectiveness. This Agreement together with all
exhibits thereto, any grants of stock options previously or concurrently
given to Employee by the Company and the Employee Proprietary Information
And Inventions Agreement to be entered into set forth the entire agreement
of the parties hereto in respect of the subject matter contained
herein. This effectiveness of this Agreement is expressly
conditioned on closing of the Merger. Upon closing of the
Merger, this Agreement shall supersede and replace the Existing Employment
Agreement and all other prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral
or written, by any officer, employee or representative of any party hereto
in respect of the subject matter hereto. Unless and until the Merger is
closed and consummated, the terms of the Existing Employment Agreement
shall remain in full force and effect in accordance with its terms, and
Employee’s current employment, benefits and compensation shall continue to
be governed thereby.
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17.
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Withholding.
All payments hereunder shall be subject to any required withholding of
Federal, national, provincial and local taxes pursuant to any applicable
law or regulation.
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18.
|
Section
Headings. The section headings in this Employment Agreement are for
convenience of reference only, and they form no part of this Agreement and
shall not affect its
interpretation.
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19.
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Attorneys’
Fees. Should any arbitration, proceeding, or other legal action
be brought for the enforcement of this Agreement, the successful or
prevailing party shall be entitled to recover its reasonable attorneys’,
accounting, and other professional fees, and any other costs incurred in
such arbitration, proceeding or other legal action, at trial, on appeal,
or in collection thereof, in addition to any other relief to which it may
be entitled.
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Employment Agreement
– Page 12
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on
the date first above written.
Company:
By: /s/ Xxxxxxx
Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Chief Executive Officer
Employee:
/s/
Xxxxxx X.
Xxxxxxx
Name:Xxxxxx
X. Xxxxxxx
Employment Agreement
– Page 13
Exhibit
A
Transition
Bonus Milestones/Requirements
Upon
substantial achievement of 80% of the following transition milestones by the
Healthaxis senior management team, the Transition Bonus shall be
due. The target payment date is on or before 6 months from the
Effective Date.
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·
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Successfully
move data center from Virginia to Blue Hill with no loss of support to
customers.
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·
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Integrate
Healthaxis’ Web Self-Service product development with BPOMS technology
team to demonstrate methodology for using offshore
resources.
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·
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Eliminate
Healthaxis corporate cost for
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o
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Audit
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o
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External
Legal Support
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o
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Directors
& Officers Insurance
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o
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Other
Public Company Costs
|
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·
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Integrate
BPOMS OCR technology for A/P processing into Healthaxis operations to
improve functionality.
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·
|
Develop
an integration plan for Human
Resources/Benefits.
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Employment Agreement
– Page 14
