EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into effective September 1, 2007 by
I-TRAX, INC., a Delaware corporation with a principal business office located
at
00 Xxxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 (the
“Company”), and XXXXXXX X. WEAR, an individual residing at 000
Xxxxxx Xxxx Xxxxx, Xxxxxxxxxxxxxx, Xxxxxxxxx 00000
(“Executive”).
The
Company and Executive desire to
enter into this Agreement on the terms set forth in this Agreement.
In
consideration of the mutual
covenants and premises contained in this Agreement, and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged
by
the Company and Executive, the Company and Executive agree as
follows:
1. Term
of Employment. Upon the terms set forth in this Agreement, the
Company employs Executive and Executive accepts employment with the Company
for
the period of three years (such period, the “Original Term”),
unless sooner terminated in accordance with the provisions of Section 4
below. Upon the expiration of the Original Term, the term of the
Executive’s employment will automatically extend for successive one-year periods
(each such period, an “Additional Term”) unless the Additional
Term is sooner terminated in accordance with the provisions of Section 4 below
or unless on or before 90 days prior to the end of the Original Term or any
Additional Term, Executive or the Company notifies the other in writing that
the
Executive’s employment under this Agreement will not be extended beyond the
Original Term or the applicable Additional Term.
2. Title
and Capacity. Executive will serve as Senior Vice President and
Chief Financial Officer of the Company and will perform the duties commensurate
with such position and such other duties as the Company’s Chief Executive
Officer or the Board of Directors (the “Board”) may assign to
the Executive. Executive will devote attention and energies on a
full-time basis to the above duties, and Executive will not, during the term
of
this Agreement, actively engage in any other for profit business
activity.
3. Compensation
and Benefits.
3.1 Salary. During
the Original Term and any Additional Term, the Company will pay Executive an
annual base salary of $240,000 and such discretionary bonuses, if any, as the
Compensation Committee of the Board (the “Compensation
Committee”) in its sole discretion may determine in accordance with the
Management Incentive Plan (“MIP”) plan adopted by the
Compensation Committee. Executive’s initial target incentive under
the MIP will be 40% of annual base salary and is attached as Exhibit
A to this Agreement. Executive will be eligible for annual
increases in base salary commensurate with other executives of the
Company.
3.2 Payment
in Installments. The Company will pay Executive’s annual base
salary in periodic installments in accordance with the Company’s general payroll
practices, after withholding for all Federal, state and local taxes and other
required deductions. The Company will pay the bonus at such time as
the Compensation Committee determines in its sole discretion.
3.3 Benefits. Provided
Executive meets and continues to meet the full-time and any and all other
eligibility requirements set forth in the Company’s Employee Manual and benefits
plans sponsored by the Company, the Company will make available to Executive
the
standard full-time employee benefits and benefit plans, subject to employee
cost
sharing provisions and other provisions of such benefits and benefit
plans. Notwithstanding the preceding, the Company may change, modify,
amend, eliminate, or terminate any benefit or benefit plan or change the
employee cost sharing provisions of any such benefit or benefit plan, and if
the
Company does so, thereafter Executive will be entitled only to then available
standard full-time employee benefits and benefit plans.
3.4 Paid
Time Off. Executive is entitled to 25 paid time off days per year
to be accrued in accordance with the Company’s Executive PTO policy, as amended
from time to time, and taken at such times as may be approved by the Executive’s
immediate supervisor or the Chief Executive Officer of the Company.
3.5 Expenses. The
Company will reimburse Executive for all reasonable travel, entertainment and
other expenses incurred or paid by Executive in connection with, or related
to,
the performance of his duties under this Agreement in accordance with the Travel
and Expense Policy published by the Company’s Finance Department, as amended
from time to time.
3.6 Stock
Options. The Company will grant Executive options to acquire
125,000 shares of the Company’s common stock under the Company’s 2001 or 2000
Equity Compensation Plan (the “Plan Options”). The
Plan Options will be granted by the Board or the Compensation Committee, as
applicable, at the Board of Directors or Compensation Committee meeting held
by
the Company to ratify this Agreement. The exercise price of the Plan
Options will equal the closing price on the American Stock Exchange on the
date
of that meeting. This grant will be memorialized in a formal stock
option award agreement. The Company will grant Executive options to
acquire an additional 75,000 shares of the Company’s common stock under the
Company’s 2001 or 2000 Equity Compensation Plan (the “Additional Plan
Options”) if the Executive meets expectations under the Company’s 2008
Associate Development Program. The Additional Plan Options will be
granted by the Board or the Compensation Committee, as applicable, at the Board
of Directors or Compensation Committee meeting that follows the completion
of
the 2008 Associate Development Program. The exercise price of the
Additional Plan Options will equal to the closing price on the American Stock
Exchange on the date of that meeting.
4. Employment
Termination. The employment of Executive by the Company under
this Agreement will terminate upon the occurrence of any of the
following:
4.1 Expiration
of Term. At the election of Executive or the Company upon the
expiration of the Original Term or any Additional Term if Executive or the
Company notified the other pursuant to Section 1 above that Executive’s
employment under this Agreement will not be extended for the applicable
Additional Term.
4.2 Cause. At
the election of the Company, for “cause” as defined below, immediately upon
written notice by the Company to Executive. “Cause”
for termination is deemed to exist by reason of (a) any action by Executive
resulting in the conviction of Executive of, or the entry of a plea of guilty
or
nolo contendere by Executive to, any crime involving moral turpitude, any
felony, or any misdemeanor involving misconduct or fraud in business activities,
(b) any breach of a fiduciary duty involving personal profit, (c) Executive’s
willful failure to perform his duties under this Agreement, (d) Executive’s
willful misconduct, recklessness or gross negligence in the performance of
his
duties under this Agreement, (e) any action by Executive that violates
Section 6 below, or (f) repeated refusal or failure by Executive to comply
with the reasonable directives of the Executive’s immediate supervisor or the
Chairman of the Board of the Company; provided, however, that the
Company may terminate Executive’s employment under Sections 4.2(c), (e) or (f)
above only after Executive fails (x) to commence and continue to correct or
cure
each specific instance comprising cause within 10 days of receipt by Executive
of written notice of the Executive’s immediate supervisor or the Chairman of the
Board identifying each instance constituting cause or (y) to correct or cure
each identified instance within 45 days of receipt of such notice.
4.3 Without
Cause. At the election of the Company, at any time, upon 30 days
written notice for any reason whatsoever other than for cause.
4.4 Death
or Disability. Upon Executive’s death or 30 days after
Executive’s disability. “Disability” means the
inability of Executive, due to a physical or mental disability, to perform
the
duties contemplated under this Agreement for a period of three consecutive
months or for a cumulative period of four months within any six consecutive
months. A physician satisfactory to Executive and the Company will
determine if Executive is disabled. If Executive and the Company
cannot agree on a physician within 30 days of either party’s written notice to
the other, Executive and the Company will each select a physician, who will
together select a third physician. The determination of the
physician(s) as to disability will be binding on all parties.
4.5 Termination
by Executive. At the election of Executive: (a) at any time if
his health should become impaired to an extent that makes the continued
performance of his duties under this Agreement hazardous to his physical or
mental health or his life, as certified by a physician designated by Executive
and reasonably acceptable to the Company; (b) for “good reason” upon
delivery of written notice of such “good reason” to the Company; or
(c) upon 90 days written notice of termination, which termination will be
deemed a breach by Executive of his obligations under this
Agreement. “Good reason” means: (1) the failure by
the Company to continue Executive in the position of Senior Vice President
and
Chief Financial Officer (or such other position as the Company and Executive
may
agree upon); (2) failure by the Company to pay and provide to Executive the
compensation provided in Section 3.1 above, which failure is not cured within
30
days after written notice of such failure is delivered by Executive to the
Company; (3) requiring Executive to be permanently based anywhere other than
within 25 miles of Company’s offices in Nashville, Tennessee (excluding business
related travel as required by the Company’s business); or (4) any other material
breach of this Agreement by the Company, which breach is not cured within 30
days after written notice of such breach is delivered by Executive to the
Company.
5. Effect
of Termination.
5.1 Expiration
of Term. If Executive or the Company elects not to renew
Executive’s employment for any Additional Term under Section 4.1, the Company
will pay to Executive the base salary and benefits otherwise payable to
Executive under Sections 3.1, 3.2 and 3.3, pro rata through
the last day of Executive’s actual employment by the Company.
5.2 Termination
for Cause. If the Company terminates Executive’s employment for
cause under Section 4.2, the Company will pay to Executive the base salary
and
benefits otherwise payable to Executive under Sections 3.1, 3.2 and 3.3,
pro rata through the last day of Executive’s actual employment by
the Company.
5.3 Termination
Without Cause.
(a) If
the Company terminates Executive’s employment under Section 4.3 for any reason
other than for cause (1) following the initial four months of employment and
before expiration of the Original Term or (2) at any time during any Additional
Term, the Company will pay to Executive severance equal to 12 months of base
salary then applicable under Section 3.1 in the manner provided under Section
3.2. Executive will also be reimbursed for any incurred COBRA cost
during the 12 month period immediately following date of
termination.
(b) Executive
acknowledges that if Executive’s employment is terminated pursuant to Section
4.3, the payment in full of severance under this Section 5.3 represents the
total obligation of the Company to Executive under this Agreement.
5.4 Termination
for Death or Disability. If Executive’s employment is terminated
by death or because of disability under Section 4.4, the Company will pay to
the
estate of Executive or to Executive, as applicable, the base salary and benefits
otherwise payable to Executive under Sections 3.1, 3.2 and 3.4 above through
the
end of the month in which termination of Executive’s employment because of death
or disability occurs.
5.5 Termination
by Executive.
(a) If
Executive terminates Executive’s employment under Section 4.5(a) for reasons of
health, the Company will pay to Executive the base salary and benefits otherwise
payable to Executive under Sections 3.1, 3.2 and 3.4 through the date of
termination.
(b) If
Executive terminates Executive’s employment under Section 4.5(b) for good reason
at any time (1) following the initial four months of employment and before
expiration of the Original Term or (2) at any time during any Additional Term,
the Company will pay to Executive severance equal to 12 months of base salary
then applicable under Section 3.1 in the manner provided under Section
3.2.
(c) Executive
acknowledges that if Executive’s employment is terminated pursuant to Section
4.5(b), then the payment in full of severance under Section 5.5(b) represents
the total obligation of the Company to Executive under this
Agreement.
(d) If
Executive terminates Executive’s employment under Section 4.5(c), the Company
will pay to Executive the base salary and benefits otherwise payable to him
under Sections 3.1, 3.2 and 3.4 pro rata through the last day of his
actual employment by the Company, and the Company may assert a claim for damages
caused to the Company by reason of Executive’s termination in breach of
Executive’s obligations under this Agreement.
6. Non-Competition,
Non-Solicitation and Confidentiality.
6.1 Non-Competition. During
the Original Term and, if automatically renewed, the applicable Additional
Term
(regardless whether the Original Term or the applicable Additional Term are
terminated under Section 4 above prior to its scheduled expiration under
Section 1) and for a period of one year after the expiration of the Original
Term and, if automatically renewed, the applicable Additional Term, Executive
will not, including through an Affiliate (as defined in Rule 12b-2 promulgated
pursuant to the Securities Exchange Act of 1934, as amended), directly or
indirectly, serve as proprietor, partner, manager, employee, stockholder,
principal, agent, consultant, director, officer or lender, or in any other
capacity participate, engage in or have a financial or other interest in, any
business which is a Direct Competitor of Company. “Direct
Competitor” means any Person (as defined below) that directly or
through an Affiliate, subsidiary, division, joint venture, partnership,
strategic alliance, revenue sharing, license, marketing, distribution or similar
agreement or arrangement: (1) is engaged in a business that provides
the following services directly to such Person’s customers’ employees, retirees
and their dependents, as applicable, through facilities located on or adjacent
to such Person’s customers’ workplace locations or remotely: health management;
primary care; occupational health; acute care; corporate health; pharmacy
services; or other services offered by Company on the date of termination of
Executive’s employment (collectively, the “Business”); or (2)
is developing a strategy to offer any of the foregoing services. A
list of the Direct Competitors known to the Company on the effective date of
this Agreement is set forth on Exhibit B to this
Agreement. The Company may modify the list of Direct Competitors from
time to time, including after Executive’s or the Company’s notice to terminate
or not renew this Agreement. Upon Executive’s request, Company will
provide to Executive a list of Direct Competitors known to the Company. This
Section 6.1 will not apply if Executive’s employment is terminated prior to
completion of Executive’s first four months of employment with the
Company. “Person” means an individual, partnership,
corporation, limited liability company, association, joint stock company, trust,
joint venture or any other form of business organization, unincorporated
organization or governmental entity (or any department, agency or subdivision
thereof).
6.2 Non-solicitation. During
the Original Term and, if automatically renewed, the applicable Additional
Term
(regardless whether the Original Term or the applicable Additional Term are
terminated under Section 4 above prior to its scheduled expiration under
Section 1) and for a period of one year after the expiration of the Original
Term and, if automatically renewed, the applicable Additional Term, Executive
will not, directly or indirectly, and no Person (as defined below, including
an
Affiliate) over which Executive exercises control (whether as an officer,
director, individual proprietor, holder of debt or equity securities,
consultant, partner, member or otherwise) (a) solicit or engage or employ
or otherwise enter into any agreement or understanding, written or oral,
relating to the services of any Person who is known or should be known by
Executive to be then employed or to have been employed within the preceding
six
months by the Company or its Affiliates, (b) take any action which could be
reasonably expected to lead any Person to cease to deal with the Company or
its
Affiliates or (c) solicit the business of, enter into any written or oral
agreement with or otherwise deal with any supplier of goods, products, materials
or services in competition with the Company or its Affiliates or solicit the
business of customers of the Company or its Affiliates who were such at any
time
during the two-year period preceding Executive’s last date of employment, except
on behalf of businesses in which such party would then be permitted to engage
directly without violating this Section 6.
6.3 Confidentiality. During
the Original Term and, if automatically renewed, the applicable Additional
Term
(regardless whether the Original Term or the applicable Additional Term are
terminated under Section 4 above prior to its scheduled expiration under
Section 1) and for a period of five years after the expiration of the Original
Term and, if automatically renewed, the applicable Additional Term, Executive
will treat as trade secrets all Confidential Information (as defined below)
known or acquired by Executive in the course of any affiliation Executive has
with the Company or its Affiliates and will not disclose any Confidential
Information to any Person not affiliated with the Company except as authorized
in writing by the Company. “Confidential
Information” means any information relating to the relationship of the
Company or its Affiliates to their customers (including, without limitation,
the
identity of any customer), the research, design, development, manufacturing,
marketing, pricing, costs, capabilities, capacities and business plans related
to the Business, the financing arrangements of the Company, or the financial
condition or prospects of the Company; inventions, products, processes, methods,
techniques, formulas, compositions, compounds, projects, developments, plans,
research data, clinical data, financial data, personnel data, computer programs,
software, including source code, object code, operating systems, bridgeware,
firmware, middleware or utilities and customer and supplier lists and any other
confidential information relating to the assets, condition or business of the
Company or its Affiliates. Notwithstanding the foregoing, Executive
will have no obligation with respect to (a) information disclosed to
Executive by a Person who does not owe a duty of confidentiality to the Company
or its Affiliates; or (b) information which is in the public domain and is
readily available; or (c) information where disclosure is required by law
or is necessary in connection with a claim, dispute or litigation to which
Executive is or becomes a party and the Company is given ten business days
prior
written notice of the intent to make disclosure.
6.4 Injunctive
Relief. The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the Company and
its
Affiliates and are considered by Executive to be reasonable for such
purpose. Executive acknowledges that a breach or threatened breach by
Executive of the covenants contained in this Section 6 would cause the Company
irreparable harm and that the extent of damages to the Company would be
impossible to ascertain and that there is and will be available to the Company
no adequate monetary damages or other remedy at law to compensate it in the
event of any such breach. Consequently, in the event of a breach of
any such covenant, in addition to any other relief to which the Company is
or
may be entitled, the Company may seek, as a matter of course, an injunction
or
other equitable relief, including the remedy of specific performance, to enforce
any or all of such covenants by Executive, his employer, employees, partners,
agents or any of them.
6.5 Modification
of Covenants. In the event an arbitrator, court or governmental
agency or authority determines that any provision of Section 6 is invalid by
reason of the length of any period of time or the size of any area during or
in
which such provision is effective, such period of time or area will be
considered to be reduced to the extent required to cure such
invalidity.
6.6 Extension
of Covenant. In the event Executive violates the restrictions
contained in Section 6.1, the duration of such restriction will extend for
a
period of time equal to the period of time during which such violation
continued.
6.7 Counter-claims. Any
claim or cause of action by Executive against the Company, whether predicated
on
this Agreement or otherwise, will not constitute a defense to the enforcement
by
the Company of the restrictions contained in this Section 6, but will be
litigated separately including, without limitation, any claim by Executive
that
Executive has not been terminated for cause pursuant to Section 4.2 above,
unless the claim and defense arise out of the same event and joinder would
be
required.
7. Inventions,
Patents and Intellectual Property.
7.1 Executive
agrees that all inventions, discoveries, computer programs, data, software,
technology, designs, innovations and improvements (whether or not patentable
and
whether or not copyrightable) (individually, an “Invention,”
and collectively, “Inventions”) related to the Business which
are made, conceived, reduced to practice, created, written, designed or
developed by Executive, solely or jointly with others and whether during normal
business hours or otherwise, during the Original Term, the Additional Term
or
thereafter if resulting or directly derived from Confidential Information,
will
be the sole property of the Company. Executive hereby assigns to the
Company all Inventions and any and all related patents, copyrights, trademarks,
trade names, and other industrial and intellectual property rights and
applications therefore, in the United States and elsewhere and appoints any
officer of the Company as Executive’s duly authorized attorney to execute, file,
prosecute and protect the same before any government agency, court or
authority. Upon the request of the Company and at the Company’s
expense, Executive will execute such further assignments, documents and other
instruments as may be necessary or desirable to fully and completely assign
all
Inventions to the Company and to assist the Company in applying for, obtaining
and enforcing patents or copyrights or other rights in the United States and
in
any foreign country with respect to any Invention.
7.2 Executive
will promptly disclose to the Company all Inventions and will maintain adequate
and current written records (in the form of notes, sketches, drawings and as
may
be specified by the Company) to document the conception and/or first actual
reduction to practice of any Invention. Such written records will be
available to and remain the sole property of the Company at all
times.
8. Return
of Confidential Information. All files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings or other written, photographic or other tangible material, in each
event, containing Confidential Information, whether created by Executive or
others, which come into Executive’s custody or possession, are and will be the
exclusive property of the Company to be used by Executive only in the
performance of his duties for the Company.
9. Cooperation. At
any time during the term of this Agreement or thereafter, Executive will
reasonably cooperate with the Company in any litigation or administrative
proceedings involving any matters with which Executive was involved during
Executive’s employment by the Company. The Company will reimburse
Executive for reasonable expenses, if any, incurred in providing such
assistance.
10. Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing, and may be given by a party hereto by (a)
personal service (effective upon delivery), (b) mailed by registered or
certified mail, return receipt requested, postage prepaid (effective five
business days after dispatch), (c) reputable overnight delivery service,
charges prepaid (effective the next business day) or (d) telecopy or other
means of electronic transmission (effective upon receipt of the telecopy or
other electronic transmission in complete, readable form), if confirmed promptly
by any of the methods specified in clauses subparagraphs (a)-(c) of this Section
10, to the other party at the address shown above, or at such other address
or
addresses as either party shall designate to the other in accordance with this
Section 10.
11. Non-Disparagement. During
the term of Executive’s employment hereunder and for five years thereafter,
Executive will not disparage, deprecate, or make any negative comment with
respect to the Company or its Affiliates or their respective businesses,
operations, or properties.
12. Pronouns. Whenever
the context may require, any pronouns used in this Agreement include the
corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns include the plural and vice versa.
13. Entire
Agreement. This Agreement, and such other agreements, schedules
and exhibits as are referenced in this Agreement, constitute the entire
agreement between the parties and supersede all prior agreements and
understandings, whether written or oral, relating to the subject matter of
this
Agreement.
14. Amendment. This
Agreement may be amended or modified only by a written instrument executed
by
both the Company and Executive.
15. Governing
Law; Consent to Jurisdiction.
15.1 This
Agreement will be construed, interpreted and enforced in accordance with the
laws of the State of Tennessee, notwithstanding any contrary application of
conflicts of laws principles.
15.2 Each
of the Company and Executive consents to the jurisdiction of all Federal and
state courts located in the State of Tennessee which have jurisdiction over
any
disputes arising under this Agreement. Service of process in any
action or proceeding commenced in a court located in the State of Tennessee
may
be made by written notice as provided in Section 10.
16. Successors
and Assigns. This Agreement will be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including
any corporation with which or into which the Company may be merged or which
may
succeed to its assets or business; provided, however, that the
obligations of Executive are personal and may not be assigned by
him.
17. Miscellaneous.
17.1 No
delay or omission by the Company in exercising any right under this Agreement
operates as a waiver of that or any other right. A waiver or consent
given by the Company on any one occasion is effective only in that instance
and
will not be construed as a bar or waiver or any right on any other
occasion.
17.2
The captions of the sections of this Agreement are for convenience of reference
only and in no way define, limit or affect the scope or substance of any section
of this Agreement.
17.3 In
case any provision of this Agreement is invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining
provisions will in no way be affected or impaired.
[Signatures
appear on following page.]
IN
WITNESS WHEREOF, the parties hereto,
intending to be legally bound, have executed this Agreement as of the day and
year set forth above.
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COMPANY:
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I-TRAX,
INC.
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By: /s/
Xxxxx X. Xxxxx
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Name:
Xxxxx Xxxxx
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Title:
VP – HR
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Attest:
/s/ Xxxxxx Xxxxxx
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Name:
Xxxxxx Xxxxxx
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Title:
Director – HR
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EXECUTIVE:
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Witness:
/s/ Xxxxxx Xxxxxx
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/s/
Xxxxxxx X. Wear
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