Exhibit 10 (i)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this " Agreement") is made and entered into as
of the 1st day of September 1, 2001, by and between HEALTHCARE NETWORK
SOLUTIONS, INC., a Delaware corporation (hereinafter called the "Company") and
Xxxxxx Xxxxxx, (hereinafter called the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to hire Executive to serve as Company's
Chairman of the Board of Directors and as Company's President and CEO; and
WHEREAS, the Company and the Executive desire to enter into an employment
agreement to establish the rights and obligations of the Executive and the
Company in such employment relationship; and
WHEREAS, the terms of this Agreement have been approved by the Compensation
Committee of the Board of Directors of the Company;
NOW, THEREFORE, and in consideration of the above recited remises (which
are stipulated to be material) herein contained, the Company and the Executive
hereby mutually agree as follows:
1. Employment and Duties. The Company hereby employs the Executive, and
the Executive hereby accepts employment with the Company upon the
terms and conditions hereinafter set forth. The Executive shall serve
the Company as its Chairman, President and Chief Executive Officer of
HEALTHCARE NETWORK SOLUTIONS, INC. In such capacity, the Executive
shall have all powers, duties, and obligations as are normally
associated with such positions. The Executive shall further perform
such other duties related to the business of the Company, including
travel, as may from time to time be reasonably requested of her by the
Company's Board of Directors. The Executive shall devote all of her
skills, time, and attention solely and exclusively to said positions
and in furtherance of the business and interests of the Company except
for:
(a) time spent in managing her personal, financial and legal affairs
and serving on corporate, civic or charitable boards or committees, in
each case only if and to the extent not substantially interfering with
the performance of such responsibilities, and
(b) time spent as a principal and officer of Innovative Clinical and
Consulting Services, Inc. d/b/a Toco Hills Urgent Care (hereinafter
"ICCS")
(c) periods of vacation to which she is entitled.
Executive shall promptly notify the Company of her election or appointment to
any corporate, civic or charitable boards or committees on or after the date of
this Agreement.
2. Term of Employment. The term of employment shall begin, or be deemed
to have begun, on September 1, 2001 (the "Effective Date") and shall
expire on September 2, 2004, (the "Expiration Date") subject, however,
to prior termination or to extension, as herein provided. On each
September 1st while this Agreement is in force beginning September 1,
2001, the term of this Agreement shall automatically be extended so
that new term of the Agreement expires three years from such date,
which shall then become the "Expiration Date".
3. Base Salary. For such services, the Executive shall receive an annual
base salary of $150,000 ("Base Salary"), which Base Salary shall be
reviewed annually by the Compensation Committee of the Board of
Directors and which may be increased, but not decreased, by the
Company during the term of this Agreement. In the event that the
Company increases the Executive's Base Salary, the amount of the prior
Base Salary, together with any increase(s), shall be her new Base
Salary .The Base Salary shall be payable in equal installments, no
less frequently than semi-monthly, in accordance with the Company's
regular payroll practices. Beginning at the end of the first
anniversary of this date the Executive shall be entitled to annual
increases of no less than 5% for cost of living increase. Executive
shall also be reimbursement for all reasonable expenses incurred by
the Executive in connection with the conduct of the Company's business
on presentation of reasonable and appropriate receipts in accordance
with the Company's regular reimbursement policy applicable to senior
executives.
4. Bonus. Executive shall be entitled to a one time signing bonus of
$150,000 payable in cash or shares at the Executive's discretion. For
each fiscal year of the Company during which she is employed by the
Company on the last day of the fiscal year, the Executive shall
receive an annual bonus (" Annual Bonus") equal to or greater then 30%
of Executive's base salary but not greater then 100% of Executive's
base salary. Each Annual Bonus shall be paid in cash or stock, at the
Executive's discretion, no later than 90 days after the close of the
fiscal year, unless electively deferred by the Executive pursuant to
any deferral programs or arrangements that the Company may make
available to the Executive.
(a) Fund Raising. In addition to the foregoing bonuses Executive shall
receive bonuses for fund raising as set in Appendix A. For purposes of
Appendix A fund raising shall be limited to the raising of capital
through equity securities.
5. Fringe Benefits. The Company shall further provide the Executive with
all health and life insurance coverages, sick leave and disability
programs, tax-qualified retirement plans, stock option plans, paid
holidays and vacations, expense reimbursement policies, moving and
relocation policies, perquisites, and such other fringe benefits of
employment as the Company may provide from time to time to actively
employed senior executives of the Company who are similarly situated
including upon termination. Notwithstanding the preceding provisions
of this Section 5, during the term of this Agreement (including
extensions thereof) the Company shall provide the Executive at a
minimum;
(a) Directors Liability and Directors and Officers Errors and Omission
Insurance up to at least 5 million in coverage.
(b) an individual disability insurance policy, at the Company's
expense, in addition to the long-term disability plan maintained by
the Company generally for its employees, which provides long-term
disability insurance which replaces at least $10,000-of the
Executive's monthly Base Salary;
(c) a minimum of six (6) weeks of vacation
(d) a key man life insurance policy, at the Company's expense, in the
amount of $1,000,000.
6. Termination of Employment.
(a) Termination of Employment Other Than by Executive. The Executive's
employment hereunder may be terminated by the Company without any
breach of this Agreement under the following circumstances:
(1) Death or Disability. The Executive's employment hereunder shall
terminate upon her death, and may be terminated by the Company in the
event of her Disability for a continuous period of at least one
hundred eighty (180) days, provided that the Executive does not return
to work on a substantially full-time basis within thirty (30) days
after Notice of Termination is given by the Company pursuant to the
provisions of Sections 6 (c) and 6 (d) (2). A return to work of less
than thirty (30) days shall not interrupt a continuous period of
Disability . The company shall not prevent the Executive from
returning to work.
(2) Cause. The Company may terminate the Executive's employment
hereunder for cause only in the event of a final determination of a
court of law
(3) Without Cause. The Company may terminate the Executive's
employment hereunder without Cause so long as it pays Executive all
sums payable under Section 7 (c).
(b) Termination of Employment by Executive. The Executive may
terminate her employment at any time with or without Good Reason.
(c) Notice of Termination. Any termination of the Executive's
employment by the Company, or by the Executive other than termination
upon the Executive's death, shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a
"Notice of Termination" means a notice that shall indicate the
specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. The failure by the
Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not
waive any right of the Executive hereunder or preclude the Executive
from asserting such fact or circumstance in enforcing her rights
hereunder.
(d) Date of Termination. "Date of Termination" means:
(1) If the Executive's employment is terminated by her death, the date
of her death.
(2) If the Executive's employment is terminated by the Company as a
result of Disability pursuant to Section 6(a)(1), the date that is
thirty (30) days after Notice of Termination is given; provided the
Executive shall not have returned to the performance of her duties on
a full-time basis during such thirty(30) day period.
(3) If the Executive terminates her employment for Good Reason
pursuant Section 6(b), the date that is ten (10) days after Notice of
Termination is given (provided that the Company does not cure such
event during the ten (10) day period).
(4) If the Executive terminates her employment other than for Good
Reason, the date that is two (2) weeks after Notice of Termination is
given; provided, in the sole discretion of the Company, such date may
be any earlier date after Notice of Termination is given.
(5) If the Executive's employment is terminated by the Company without
Cause pursuant to Section 6(a)(3), the date that is two (2) weeks
after Notice of Termination is given.
(6) If the Executive's employment is terminated by the Company for
Cause pursuant to Section 6(a)(2), the date on which the Notice of
Termination is given.
7. Amounts Payable Upon Termination of Employment or During
Disability. Upon the termination of the Executive's employment with
the Company, the Company shall have the following obligations
(including the obligation to pay the cost of all benefits provided by
the applicable benefit plan to the Executive and the Executive's
family under this Section 7, except normal employee contributions
required by the applicable benefit plan of other participating
executives with comparable responsibilities); provided, however, that
any item paid or payable under this Agreement shall be reduced by any
amount paid or payable to the Executive and the Executive's family
with respect to the same type of payment under any severance plan or
policy now maintained or at any time in the future maintained by the
Company. F or this purpose, any payment or any severance plan or
policy made over time shall be discounted to present value at the
Interest Rate before reducing any payment under this Agreement by any
amount paid or payable to the Executive under such severance plan or
policy. Notwithstanding anything herein to the contrary, in the event
the company fails to pay any sum"payable" under any severance plan or
policy, such failure shall negate any reduction given to "payable"
amount.
(a) Death. If the Executive's employment is terminated by her death,
the Executive's beneficiary (as designated by the Executive in writing
with the Company prior to her death) shall be entitled to payment of
all Accrued Obligations. Unless otherwise directed by the Executive
all Accrued Obligations shall be paid to the Executive's beneficiaries
in a lump sum in cash within thirty (30) days of the Date of
Termination. In the absence of a beneficiary designation by the
Executive, or, if the Executive's designated beneficiary does not
survive the Executive, benefits described in this Section 7(a) shall
be paid to the Executive's heirs. In addition, all stock options that
have been granted to the Executive at least six months prior to the
date of her death (measured from the date of grant of each such stock
option), if any, shall be and become fully vested and may be executed
by the estate of the Executive for a period equal to the earlier to
occur of three (3) years from the date of the death of the Executive
or the date the option would have otherwise expired without regard to
the Executive's death or other termination of employment. If the
Executive dies after the date of grant of any stock options, the
Executive's estate may exercise any stock options which were then
vested for a period equal to the earlier to occur of three (3) years
from the date of the death of the Executive or the date the option
would have expired without regard to the Executive's death or other
termination of employment.
(b) Disability.
(1) During any period that the Executive fails to perform her duties
hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), the Executive shall continue to receive her
base salary at the rate then in effect for such period until her
employment is terminated pursuant to Section 6(a)(1).
(2) Upon her termination of employment because of Disability (as
described in Section 6(a)(1), the Executive shall be entitled to the
payments and benefits described in Section 7(a) as if the Executive
had died on her Date of Termination. In the event of the Executive's
death prior to the time that all payments described in Section 7(a)
have been completed, such payments and benefits shall be paid to the
Executive's beneficiary (as designated pursuant to Section 7(a), or,
in the absence of a beneficiary designation of the designated
beneficiary does not survive the Executive, to the Executive's estate.
(3) The Executive and the Executive's family shall be entitled to
receive disability and other welfare plan benefits (other than
continued group long-term disability coverage) generally available to
executives with comparable responsibilities or positions for a period
of two (2) years from the Date of Termination.
(c) Termination by Company Without Cause or Termination by Executive
for Good Reason. In the event that the Company terminates the
Executive's employment without Cause or the Executive terminates her
employment for Good Reason before the expiration of the term of this
Agreement, including any extension thereof, the Executive shall be
entitled to the following payments and benefits: (1) Those described
in Section 7(a) as if the Executive had died on her Date of
Termination; and
(2) Payment of all Base Salary, the signing bonus and all guaranteed
Annual Bonuses that would otherwise have become payable but for
termination, through the "Expiration Date"; and
(3) All outstanding options, stock grants, share of restricted stock
or any other equity, incentive compensation shall be and become fully
vested and nonforfeitable; and
(4) The Executive and the Executive's family shall be entitled to
receive welfare plan benefits (other than continued group long-term
disability coverage) generally available to executives with comparable
responsibilities or positions for a period of the lessor of three (3)
years from the Date of Termination or until the Expiration Date of
this Agreement at the same cost to the Executive as is charged to such
executives from time to time for comparable coverage.
8. Restrictive Covenants. The Executive agrees that, during the term
of this Agreement, including an extension thereof, and for a period of
one year thereafter, she shall not, directly or indirectly:
(a) on Executive's own behalf or on behalf of any other person or
entity, solicit, contact, call upon, communicate with, or attempt to
communicate with any person or entity who was a customer of the
Company at any time within the one-year period ending on the Date of
Termination or any representative of any such customer of the Company,
with the intent or purpose of selling or providing of any product or
service competitive with any product or service sold or provided or
under development by the Company during the period of one year
immediately preceding termination of Executive's employment and which
is still being offered by or is still under development by the
Company; and
(b) employ or attempt to employ or assist anyone else in employing in
any Competing Business any person who, at any time within the period
commencing one year prior to the Date of Termination and ending one
year after the Date of Termination, was, is or shall be an employee of
the Company (whether or not such employment is full-time or is
pursuant to a written contract with the Company).
(c) Notwithstanding anything in this Section 8 or Section 9 below to
the contrary, in the event, for whatever reason, Executive is not
actively employed under this agreement for at least two years, then
Executive shall be entitled to use and disclose for her own benefit,
or for the benefit of others any information acquired by her prior to
employment hereunder or acquired by her in conjunction with any of the
customers or accounts listed on the attached Appendix B. Furthermore,
in such event, nothing in Section 8 or Section 9 shall prohibit,
restrict, or otherwise affect Executive's right or ability to transact
business with any of the customers or accounts on said Appendix B.
Whether for Executive's own benefit or for the benefit of others.
(d) Notwithstanding anything in this Section 8 or Section 9 below to
the contrary, performance by Executive of her duties for ICCS as
described in Section 1 (b) shall not constitute a breach or violation
of Section 8 or Section 9 hereof.
9. Confidential Information. The Executive agrees that:
(a) during the term of this Agreement and, with respect to
Confidential Information, for a period of five (5) years following her
Date of Termination, or with respect to Trade Secrets, for so long as
the respective information qualifies as a trade secret under
applicable law, she will receive and hold all Company Information in
trust and in strictest confidence
(b) will use her best effort to protect the Company Information from
disclosure and will in no event take any action causing any Company
Information to lose its character as Company Information; and
(c) except as required by Executive's duties in the course of
employment by the Company, she will not, directly or indirectly, use,
publish, disseminate or otherwise disclose any Company Information to
any third party without the prior written consent of the Company,
which may be withheld in the Company's absolute discretion.
All documents tangible or intangible materials, including computer
data, provided to or obtained by Executive during the course of
employment by the Company which contains Company Information are the
property of the Company (collectively, the "Materials"). Executive
will not remove from the Company's premises or copy or reproduce any
Materials(except as Executive's employment by the Company shall
require), and at the termination of Executive's employment, regardless
of the reason for such termination, Executive will leave with the
Company, or immediately return to the Company, all Materials or copies
or reproductions thereof in Executive's possession, power or control.
10. Acknowledgment; Remedies.
(a) Executive has carefully considered the nature and extent of the
restrictions upon her and the rights and remedies conferred to the
Company under Sections 8 and 9 of this Agreement, and hereby
acknowledges and agrees that the same are reasonable in time,
necessary to protect the business, interests and properties of the
Company, are designed to eliminate competition which would be unfair
to the Company, do not stifle the inherent skill and experience of
Executive, would not operate as a bar to Executive's sole means of
support, are fully required to protect the legitimate interests of the
Company and do not confer a benefit upon the Company disproportionate
to the detriment of Executive.
(b) In the event of any violation of the provisions of Sections 8 or 9
of this Agreement by Executive, the parties hereby recognize and
acknowledge that remedy at law will be inadequate and the Company may
suffer irreparable injury. Accordingly, Executive consents to
injunctive and other appropriate equitable relief upon the institution
of proceedings therefore by the Company in order to protect the
Company's rights under such Sections. Such relief shall be in addition
to any other relief to which the Company may be entitled at law or in
equity. Covenants contained in Sections 8 or 9 hereof shall be treated
as independent covenants.
11. Certain Further Payments by the Company.
(a) Tax Reimbursement Payment. In the event that any amount or benefit
paid or distributed to the Executive by the Company or any Affiliated
Company, whether pursuant to this Agreement or otherwise
(collectively, the "Covered Payments"), is or becomes subject to the
tax (the "Excise Tax") imposed under Section 4999 of the Code or any
similar tax that may hereafter be imposed, the Company shall pay to
the Executive, at the time specified in Section 11 (e) below, the Tax
Reimbursement Payment (as defined below). The Tax Reimbursement
Payment is deferred as an amount, which when added to the Covered
Payments and reduced by any Excise Tax on the Covered Payments and any
federal, state and local income tax and Excise Tax on the Tax
Reimbursement Payment provided for by this Agreement (but without
reduction for any federal, state or local income or employment tax on
such Covered Payments), shall be equal to the sum of (i) the amount of
the Covered Payments, and (ii) an amount equal to the product of any
deductions disallowed for federal, state or local income tax purposes
because of the inclusion of the Tax Reimbursement Payment in the
Executive's adjusted gross income and the highest applicable marginal
rate of federal, state or local income taxation, respectively, for the
calendar year in which the Tax Reimbursement Payment is to be made.
(b) Determining Excise Tax. For purposes of determining whether any of
the Covered Payments will be subject to the Excise Tax and the amount
of such Excise Tax,
(1) such Covered Payments will be treated as "parachute payments"
within the meaning of Section 280G of the Code, and all "parachute
payments" in excess of the "base amount" (as defined under Section
280G{b)(3) of the Code) shall be treated as subject to the Excise Tax,
unless, and except to the extent that, in the opinion of the Company's
independent certified public accountants, which, in the case of
Covered Payments made after the Change of Control Date, shall be the
Company's independent certified public accountants appointed prior to
the Change of Control Date, or tax counsel selected by such
accountants (the " Accountants"), such Covered Payments (in whole or
in part) either do not constitute "parachute payments" or represent
reasonable compensation for services actually rendered (within the
meaning of Section 280G{b)(4) of the Code) in excess of the "base
amount", or such "parachute payments" are otherwise not subject to
such Excise Tax, and
(2) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the
Accountants in accordance with the principles of Section 280G of the Code.
(c) Applicable Tax Rates and Deductions. For purposes of determining
the amount of the Tax Reimbursement Payment, the Executive shall be
deemed:
(1) to pay federal income taxes at the highest applicable marginal
rate of federal income taxation for the calendar year in which the Tax
Reimbursement Payment is to be made,
(2) to pay any applicable state and local income taxes at the highest
applicable marginal rate of taxation for the calendar year in which
the Tax Reimbursement Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from the
deduction of such. state or local taxes if paid in such year
(determined without regard to limitations on deductions based upon the
amount of the Executive's adjusted gross income), and
(3) to have otherwise allowable deductions for federal, state and
local income tax purposes at least equal to those disallowed because
of the inclusion of the Tax Reimbursement Payment in the Executive's
adjusted gross income.
(d) Subsequent Events. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount
taken into account hereunder in calculating the Tax Reimbursement
Payment made, the Executive shall repay to the Company, at the time
that the amount of such reduction in the Excise Tax is finally
determined, the portion of such prior Tax Reimbursement Payment that
has been paid to the Executive or to federal, state or local tax
authorities on the Executive's behalf and that would not have been
paid if such Excise Tax had been applied in initially calculating such
Tax Reimbursement Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
Notwithstanding the foregoing, in the event any portion of the Tax
Reimbursement Payment to be refunded to the Company has been paid to
any federal, state or local tax authority , repayment thereof shall
not be required until actual refund or credit of such portion has been
made to the Executive, and interest payable to the Company shall not
exceed interest received or credited to the Executive by such tax
authority for the period it held such portion. The Executive and the
Company shall mutually agree upon the course of action to be pursued
(and the method of allocating the expenses thereof) if the Executive's
good faith claim for refund or credit is denied. In the event that the
Excise Tax is later determined by the Accountants to exceed the amount
taken into account hereunder at the time the Tax Reimbursement Payment
is made (including, but not limited to, by reason of any payment the
existence or amount of which cannot be determined at the time of the
Tax Reimbursement Payment), the Company shall make an additional Tax
Reimbursement Payment in respect of such excess (which Tax
Reimbursement Payment shall include any interest or penalty payable
with respect to such excess) at the time that the amount of such
excess is finally determined.
(e) Date of Payment. The portion of the Tax Reimbursement Payment
attributable to a Covered Payment ~ be paid to the Executive within
ten business days following the payment of the Covered Payment. If the
amount of such Tax Reimbursement Payment (or portion thereof) cannot
be finally detem1ined on or before the date on which payment is due,
the Company shall pay to the Executive an amount estimated in good
faith by the Accountants to be the minimum amount of such Tax
Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (which Tax Reimbursement Payment shall include
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined, but in no event later
than 45 calendar days after payment of the related Covered Payment. In
the event that the amount of the estimated Tax Reimbursement Payment
exceeds the amount subsequently determined to have been due, such
excess shall be repaid or refunded pursuant to the provisions of
Section 11 ( d) above.
12. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the
Company or any of its Affiliated Companies and for which the Executive
may qualify, nor shall anything herein limit or otherwise prejudice
such rights as the Executive may have under any other agreements with
the Company or any Affiliated Companies, including, but not limited to
stock option or restricted stock agreements. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any Affiliated Companies at or
subsequent to the Date of Termination shall be payable in accordance
with such plan or program.
13. Notice of Termination for Good Cause. In the event that the
Executive shall in good faith give a Notice of Termination for Good
Reason and it shall thereafter be determined that Good Reason did not
take place, the said Notice of Termination for Good Reason shall be
deemed void ad initio as if such Notice had never been given.
14. Definitions.
(a) "Accountants" shall have the meaning set forth in Section ll (b).
(b) "Accrued Obligations" shall mean (i) the Executive's full Base
Salary through the Date of Termination, (ii) the product of the Annual
Bonus paid to the Executive for the last full fiscal year of the
Company and a fraction, the numerator of which is the number of days
in the current fiscal year of the Company through the Date of
Termination, and the denominator of which is 365, (iii) any
compensation previously deferred by the Executive (together with any
accrued earnings thereon) and not yet paid by the Company and any
accrued vacation pay for the current year not yet paid by the Company,
(iv) any amounts or benefits owing to the Executive or to the
Executive's beneficiaries under the then applicable employee benefit
plans or policies of the Company and (v) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the
Executive prior to the Date of Termination and which are reimbursable
in accordance with the reimbursement policy of the Company described
in Section 5(a).
(c) "Affiliated Company" shall mean any company controlling,
controlled by or under common control with the Company.
(d) " Annual Bonus" shall have the meaning set forth in Section 4.
(e) "Base Salary" shall have the meaning set forth in Section 3.
(f) "Board" shall mean the Board of Directors of the Company.
(g) "Cause" shall mean either:
(1) any. act that constitutes, on the part of the Executive, (A)
fraud, dishonesty, or a felony and (B) that directly results in
material injury to the Company; as proven in a court ruling.
(h) A "Change of Control" means:
(1) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act">>) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the corporation where such
acquisition causes such person to own thirty-five percent (35%) or
more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this Subsection (A), the following
acquisitions shall not be deemed to result in a Change of Control: (i)
any acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (iv) any acquisition by any
corporation pursuant to a transaction that complies with clauses (i),
(ii) and (iii) of Subsection (3) below; and provided further, that if
any Person's beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds thirty- five percent (35%) as a result
of a transaction described in clause (i) or (ii) above, and such
Person subsequently acquires beneficial ownership of additional voting
securities of the Company, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own thirty-five
percent (35%) or more of the Outstanding Company Voting Securities; or
(2) individuals who as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of
at least two- thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(3) the approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company ("Business
Combination ") or, if consummation of such Business Combination is
subject, at the time of such approval by shareholders, to the consent
of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding,
however, such a Business Combination pursuant to which (i) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation that as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Voting Securities,
(ii) no Person (excluding any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, thirty-five
percent (35%) or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(4) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, no Change of Control shall be deemed to
have occurred for purposes of this Agreement by reason of any actions
or events in which the Executive participates in a capacity other than
in her capacity as executive (or as a director of the Company or a
Subsidiary, where applicable).
(i) "Change of Control Date" shall mean the date on which a Change of
Control shall be deemed to have occurred.
(j) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(k) "Company Information" means Confidential Information and Trade
Secrets.
(l) "Competing Business" means any business engaging in the
exploitation or development of antimicrobial products.
(m) "Confidential Information" means confidential data and
confidential information relating to the business of the Company
(which does not rise to the status of a trade secret under applicable
law) which is or has been disclosed to Executive or of which Executive
became aware as a consequence of or through her employment with the
Company and which has value to the Company and is not generally known
to its competitors and which is designatedby the Company as
confidential. Confidential Information shall not include any data or
information that (i) has been voluntarily disclosed to the general
public by the Company, (ii) has been independently developed and
disclosed to the general public by others, or (iii) otherwise enters
the public domain through lawful means.
(n) "Date of Termination" shall have the meaning set forth in Section
6(d).
(o) "Disability" shall mean disability which would entitle the
Executive to receive full long-term disability benefits under the
Company's long-term disability plan on term substantially similar to
those of the long-term disability plan as in effect on the date of
this Agreement.
(p) "Excise Tax" shall have the meaning as set forth in Section 11(a).
(q) "Good Reason" shall mean the occurrence of one of the following
events (provided the Company does not cure such event on a retroactive
basis to the extent possible within thirty days following its receipt
of the Executive's Notice of Termination):
(1) The Executive's title is changed causing a materially adverse
manner.
(2) The Executive's base salary is reduced for any reason other than
in connection with the termination of her employment.
(3) For any reason other than in connection with the termination of
the Executive's employment, the Company materially reduces any fringe
benefit provided to the Executive under Section 5 below the level of
such fringe benefit provided generally other actively employed
similarly situated executives of the Company. Notwithstanding the
foregoing, if the Company agrees to fully compensate the Executive for
any such material reduction for a period ending on the earlier to.
occur of (i) the date such fringe benefit is no longer provided to
other actively employed similarly situated executives of the Company
or (ii) four (4) years, then such event shall not constitute Good
Reason.
(4) A change of over fifty (50) miles in the Executive's principal
place of employment in Atlanta, Georgia, unless elected in acceptance
by the Company and Executive.
(5) The Company otherwise materially breaches, or is unable to perform
its obligations under this Agreement, unless mutually agreed upon in
writing by the Executive and Company..
(6) The occurrence of a Change of Control.
Notwithstanding the foregoing, the occurrence of one of the event in
Sections ( 1) through (6) hereof shall not be considered Good Reason
for the Executive's termination, unless the Executive delivers a
Notice of Termination-pursuant to Sections 6(c) and 6(d)(3) hereof,
within one hundred eighty (180) days after the Executive has actual
notice of the occurrence of any of the events listed in Sections (1)
through (6) hereof.
(7) A breach of the Funding Commitment described in Section 21 below.
(r) "Interest Rate" shall mean the interest rate payable on one year
Treasury Bills in effect on the day that is 30 business days (days
other than Saturday, Sunday or legal holidays in the City of New York)
prior to the Date of Termination.
(s) "Notice of Termination" shall have the meaning as set forth in
Section 6(c).
(t) "Subsidiary" shall mean any majority owned subsidiary of the
Company.
(u) "Tax Reimbursement Payment" shall have the meaning set forth in
Section 11(a).
(v) "Trade Secrets" means information of the Company, without regard
to form, including, but not limited to, technical or non-technical
data, formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans,
product or service plans or lists of actual or potential customers or
suppliers which is not commonly known by or available to the public
and which information (I) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value from
its disclosure or use; and (2) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
15. Assignments and Survivorship of Benefits. The rights and
obligations of the Company under this Agreement shall inure to the
benefit of, and shall be binding upon, the successors and assigns of
the Company. If the Company shall at any time be merged or
consolidated into, or with, any other company, or if substantially all
of the assets of the Company are transferred to another company, then
the provisions of this Agreement shall be binding upon and inure to
the benefit of the company resulting from such merger or consolidation
or to which such assets have been transferred, and this provision
shall apply in the event of any subsequent merger, consolidation, or
transfer.
16. Notices. Any notice given to either party to this Agreement shall
be in writing, and shall be deemed to have been given when delivered
personally or sent by certified mail, postage prepaid, return receipt
requested, duly addressed to the party concerned, at the address
indicated below or to such changed address as such party may
subsequently give notice of:
If to the Company:
HEALTHCARE NETWORK SOLUTIONS, INC.
0000 Xxxxxxxxxxxxx Xxxx..
Xxxxx X000
Xxxxxxxx, Xxxxxxx 00000
Attn: Board of Directors
with a copy to:
Xxxx X. Xxxxx p.c.
000 Xxxxx Xxx. 25th Floor
New , N.Y. 10017
If to the Executive:
Xxxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx , Xxxxxxx 00000
with copy to: Xxxxxxx and Xxxxx, LLP
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
17. Indemnification. The Executive shall be indemnified by the
Company, to the extent provided in the case of officers under the
Company's Articles of Incorporation or Bylaws, to the maximum extent
permitted under applicable law.
18. Taxes. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made hereunder by the Company to the
Executive shall be subject to withholding of such amounts relating to
taxes as the Company may reasonably determine that it should withhold
pursuant to any applicable law or regulations. In lieu of withholding
such amounts, in whole or in part, however, the Company may, in its
sole discretion, accept other provision for payment of taxes, provided
that is satisfied that all requirements of the law affecting its
responsibilities to withhold such taxes have been satisfied.
19. Enforcement of Rights. All legal and other fees and expenses,
including, without limitation, any arbitration expenses, incurred by
the Executive in connection with seeking to obtain or enforce any
right or benefit provided for in this Agreement, or in otherwise
pursuing any right or claim, shall be paid by the Company, to the
extent permitted by law, provided that the Executive is successful in
whole or in part as to such claims as the result of litigation,
arbitration, or settlement. In the event that the Company refuses or
otherwise fails to make a payment when due and it is ultimately
decided that the Executive is entitled to such payment, such payment
shall increased to reflect an interest equivalent for the period of
delay, compounded annually, equal to four (4) percentage points over
the Interest Rate in effect as of the date the payment was first due.
20. Governing Law/Captions/Severance. This Agreement shall be
construed in accordance with, and pursuant to, the laws of the State
of Georgia. The captions of this Agreement shall not be part of the
provisions hereof, and shall have no force or effect. The invalidity
or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement. Except as otherwise specifically provided in this section,
the failure of either party to insist in any instance on the strict
performance of any provision of this Agreement or to exercise any
right hereunder shall not constitute a waiver of such provision or
right in any other instance. The parties hereto consent to the
jurisdiction of the state and federal courts of the State of Georgia
located in Xxxxxx County, Georgia, with respect to any action arising
or relating to this Agreement and said courts in the State of Georgia
shall have sole and exclusive jurisdiction with respect to any such
action or related action.
21. Funding Commitment. Within 10 days of the execution and delivery
of this agreement, Company's parent corporation, BioShield, Inc.,
shall deposit into Company's account as funding a sum of not less than
$15,000 bi-weekly ("Funding Commitment"). Said funding commitment is
to be used to cover Company's operating expenses through the
contemplated filing of the registration document and until the
subsequent Private Placement is completed.
22. Entire Agreement/Amendment. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and
the parties have made no agreement, representations, or warranties
relating to the subject matter of this Agreement that are not set
forth herein. This Agreement may be amended at any time by written
agreement of both parties, but it shall not be amended by oral
agreement.
IN WITNESSETH WHEREOF, the parties have executed this Agreement on the
date first above written.
HEALTHCARE NETWORK SOLUTIONS, INC.
---------------------------------
Name
EXECUTIVE:
---------------------------------
XXXXXX XXXXXX
Appendix A:
Fund Raising Bonus:
(a) In consideration of Executive's services hereunder, The Company will
pay to Executive, upon closure of any capital investment in The Company in
the amount of Fifty Thousand Dollars ($50,000) or more ( an "Investment"),
a lump-sum payment in cash equal to that percentage of the Investment as
set forth in Section 1 (c) below (the "Bonus"). This payment shall be paid
to Executive within thirty (30) days of actual receipt of the Investment by
Company. Where the Investment is received by Company in incremental
disbursements or receipts the bonus payable to Executive shall be paid in
corresponding increments.
(b) For purposes of this Agreement, "Investment" means the raising of
capital through equity securities in the Company by an Investor totaling a
minimum of Fifty Thousand Dollars ($50,000) that: (i) closes during the
Term of the agreement; or (ii) closes after the Term pursuant to a written
letter of intent executed or commitment executed during the Term.
(c) Upon closure of an Investment in The Company and actual receipt of the
Investment by The Company, Executive shall be entitled to the following
bonus:
Amount of Investment Percentage of the Investment Paid to Executive
-------------------- ----------------------------------------------
$50,000 - $499,999 5 Percent (5%)
$500,000 - $999,999 4 Percent (4%)
$1 Million - $4,999,999 3 Percent (3%)
$5 Million and Above 2 Percent (2%)
Appendix B:
Current Customers of Xxxxxx Xxxxxx:
Blausen Medical Communications, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxx Xxxxxxx, CEO
TherapyEdge, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx , Xxxxx Xxxxxxxx 00000
Xxx Xxxxxx, VP of Business Development
McKesson/ HBOC
0000 XxxxXxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
J. R. Xxxxxx, EVP
enfoTrust Networks
0 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
X.X. Xxxxxxxx
IDP, Inc.
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxx. 00000
Xxxxxxx Xxxxxx President and Xxx Xxxxxxxx, COO
