Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 10th day
of October, 2005, by and between HEALTH BENEFITS DIRECT CORPORATION, a Delaware
corporation with offices at 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000
(the "CORPORATION"), and Xxxxx Xxxxxxx, an individual residing at 000 X. Xxx
Xxxxx Xxxxx Xxxx, Xxx. 0000, Xxxx Xxxxxxxxxx, XX 00000 (the "EXECUTIVE"), under
the following circumstances:
RECITALS:
A. The Corporation desires to secure the services of the Executive upon
the terms and conditions hereinafter set forth; and
B. The Executive desires to render services to the Corporation upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
1. EMPLOYMENT. The Corporation hereby employs the Executive and the
Executive hereby accepts employment as an executive of the Corporation, subject
to the terms and conditions set forth in this Agreement.
2. DUTIES. The Executive shall serve as the Chief Executive Officer of
the Corporation with such duties, responsibilities and authority as are
commensurate and consistent with his position, as may be, from time to time,
assigned to him by the Board of Directors of the Corporation. The Executive
shall report directly to the Board of Directors of the Corporation. During the
term of this Agreement, the Executive shall devote his full business time and
efforts to the performance of his duties hereunder unless otherwise authorized
by the Board of Directors. Notwithstanding the foregoing, the expenditure of
reasonable amounts of time by the Executive for the making of passive personal
investments, the conduct of private business affairs and charitable and
professional activities shall be allowed, provided such activities do not
materially interfere with the services required to be rendered to the
Corporation hereunder and do not violate the restrictive covenants set forth in
SECTION 9 below.
3. TERM OF EMPLOYMENT. The term of the Executive's employment hereunder,
unless sooner terminated as provided herein (the "INITIAL TERM"), shall be for a
period of two (2) years commencing on the date hereof (the "COMMENCEMENT DATE").
The term of this Agreement shall automatically be extended for additional terms
of one year each (each a "RENEWAL TERM") unless either party gives prior written
notice of non-renewal to the other party no later than sixty (60) days prior to
the expiration of the Initial Term ("NON-RENEWAL NOTICE"), or the then current
Renewal Term, as the case may be. For purposes of this Agreement, the Initial
Term and any Renewal Term are hereinafter collectively referred to as the
"TERM."
4. COMPENSATION OF EXECUTIVE.
(a) The Corporation shall pay the Executive as compensation for his
services hereunder, in equal semi-monthly or bi-weekly installments during the
Term, the sum of Two Hundred Fifty Eight Thousand Three Hundred Dollars
($258,300) per annum (the "BASE SALARY"), less such deductions as shall be
required to be withheld by applicable law and regulations. The Corporation shall
review the Base Salary on an annual basis and has the right but not the
obligation to increase it, but has no right to decrease the Base Salary.
(b) In addition to the Base Salary set forth in Section 4(a) above,
the Executive shall be entitled to such bonus compensation (in cash, capital
stock or other property) as a majority of the members of the Board of Directors
of the Corporation may determine from time to time in their sole discretion.
(c) The Corporation shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred or paid by the Executive in
the course of his employment, consistent with the Corporation's policy for
reimbursement of expenses from time to time.
(d) The Executive shall be entitled to participate in such pension,
profit sharing, group insurance, hospitalization, and group health and benefit
plans and all other benefits and plans as the Corporation provides to its senior
executives (the "BENEFIT PLANS").
5. TERMINATION.
(a) This Agreement and the Executive's employment hereunder shall
terminate upon the happening of any of the following events:
(i) upon the Executive's death;
(ii) upon the Executive's "Total Disability" (as herein defined);
(iii) upon the expiration of the Initial Term of this Agreement
or any Renewal Term thereof, if either party has provided a timely notice of
non-renewal in accordance with Section 3, above;
(iv) at the Corporation's option, upon sixty (60) days prior
written notice to the Executive if without cause;
(v) at the Executive's option, upon thirty (30) days prior
written notice to the Corporation;
(vi) at the Executive's option, in the event of an act by the
Corporation, defined in Section 5(c), below, as constituting "Good Reason" for
termination by the Executive; and
(vii) at the Corporation's option, in the event of an act by the
Executive, defined in Section 5(d), below, as constituting "Cause" for
termination by the Corporation.
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(b) For purposes of this Agreement, the Executive shall be deemed to
be suffering from a "TOTAL DISABILITY" if the Executive has failed to perform
his regular and customary duties to the Corporation for a period of 180 days out
of any 360-day period and if before the Executive has become "Rehabilitated" (as
herein defined) a majority of the members of the Board of Directors of the
Corporation, exclusive of the Executive, vote to determine that the Executive is
mentally or physically incapable or unable to continue to perform such regular
and customary duties of employment. As used herein, the term "REHABILITATED"
shall mean such time as the Executive is willing, able and commences to devote
his time and energies to the affairs of the Corporation to the extent and in the
manner that he did so prior to his Disability.
(c) For purposes of this Agreement, the term "GOOD REASON" shall mean
that the Executive has resigned due to the failure of the Corporation to meet
any of its obligations to the Executive under this or any other agreement
between the Corporation and the Executive, and failure to cure the same within
thirty (30) days following Executive's delivery of notice specifying the
breach(es) by the Corporation.
(d) For purposes of this Agreement, the term "CAUSE" shall mean
material, gross and willful misconduct on the part of the Executive in
connection with his employment duties hereunder or commission of a felony or act
of dishonesty resulting in material harm to the Corporation by the Executive.
6. EFFECTS OF TERMINATION.
(a) Upon termination of the Executive's employment pursuant to Section
5(a)(i), the Executive's estate or beneficiaries shall be entitled to the
following severance benefits: (i) three (3) months' Base Salary at the then
current rate, payable in a lump sum, less withholding of applicable taxes; and
(ii) continued provision for a period of one (1) year following the Executive's
death of benefits under Benefit Plans extended from time to time by the
Corporation to its senior executives.
(b) Upon termination of the Executive's employment pursuant to Section
5(a)(ii), the Executive shall be entitled to the following severance benefits:
(i) thirty-six (36) months' Base Salary at the then current rate, to be paid
from the date of termination until paid in full in accordance with the
Corporation's usual practices, including the withholding of all applicable
taxes; (ii) continued provision during said thirty-six (36) month period of the
benefits under Benefit Plans extended from time to time by the Corporation to
its senior executives; and (iii) payment on a prorated basis of any bonus or
other payments earned in connection with the Corporation's then-existing bonus
plan in place at the time of termination. The Corporation may credit against
such amounts any proceeds paid to Executive with respect to any disability
policy maintained for his benefit.
(c) Upon termination of the Executive's employment pursuant to Section
5(a)(iii), where the Corporation has offered to renew the term of the
Executive's employment for an additional one (1) year period and the Executive
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chooses not to continue in the employ of the Corporation, the Executive shall be
entitled to receive only the accrued but unpaid compensation and vacation pay
through the date of termination and any other benefits accrued to him under any
Benefit Plans outstanding at such time. In the event the Corporation tenders
Non-Renewal Notice to the Executive, then the Executive shall be entitled to the
same severance benefits as if the Executive's employment were terminated
pursuant to Section 5(a)(iv) or Section 5(a)(vi); PROVIDED, HOWEVER, if such
Non-Renewal Notice was triggered due to the Corporation's statement that the
Executive's employment was terminated due to Section 5(a)(v) (for "Cause"), then
payment of severance benefits will be contingent upon a determination as to
whether termination was properly for "Cause."
(d) Upon termination of the Executive's employment pursuant to Section
5(a)(iv) or (vi), the Executive shall be entitled to the following severance
benefits: (i) twelve (12) months' Base Salary at the then current rate, to be
paid upon the date of termination of employment in monthly installments, less
withholding of all applicable taxes; (ii) continued provision for a period of
twelve (12) months after the date of termination of the benefits under Benefit
Plans extended from time to time by the Corporation to its senior executives;
and (iii) payment on a prorated basis of any bonus or other payments earned in
connection with any bonus plan to which the Executive was a participant as of
the date of the Executive's termination of employment.
(e) Upon termination of the Executive's employment pursuant to Section
5(a)(v) or (vii), the Executive shall be entitled to the following severance
benefits: (i) accrued and unpaid Base Salary and vacation pay through the date
of termination, less withholding of applicable taxes; and (ii) continued
provision, for a period of one (1) month after the date of the Executive's
termination of employment, of benefits under Benefit Plans extended to the
Executive at the time of termination.
(f) The Executive shall be obligated to seek other employment in order
to mitigate his damages resulting from his discharge pursuant to Sections
5(a)(iv), (v), (vi) or (vii), provided that such employment need not be taken at
a level below chief operating officer of a subsequent company. Any payments
required to be made hereunder by the Corporation to the Executive shall continue
to the Executive's beneficiaries in the event of his death until paid in full.
7. VACATIONS. The Executive shall be entitled to a vacation of four (4)
weeks per year, during which period his salary shall be paid in full. The
Executive shall take his vacation at such time or times as the Executive and the
Corporation shall determine is mutually convenient. Any vacation not taken in
one (1) year shall not accrue, provided that if vacation is not taken due to the
Corporation's business necessities, up to two (2) weeks' vacation may carry over
to the subsequent year.
8. DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive recognizes,
acknowledges and agrees that he has had and will continue to have access to
secret and confidential information regarding the Corporation, including but not
limited to, its products, formulae, patents, sources of supply, customer
dealings, data, know-how and business plans, provided such information is not in
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or does not hereafter become part of the public domain, or become known to
others through no fault of the Executive. The Executive acknowledges that such
information is of great value to the Corporation, is the sole property of the
Corporation, and has been and will be acquired by him in confidence. In
consideration of the obligations undertaken by the Corporation herein, the
Executive will not, at any time, during or after his employment hereunder,
reveal, divulge or make known to any person, any information acquired by the
Executive during the course of his employment, which is treated as confidential
by the Corporation, and not otherwise in the public domain. The provisions of
this Section 8 shall survive the Executive's employment hereunder except in the
event of a termination of this Agreement pursuant to Section 5(a)(iv) or (vi),
hereof, or as detailed in the provision above. All references to the Corporation
in Section 8 and Section 9 hereof shall include any subsidiary of the
Corporation.
9. COVENANT NOT TO COMPETE OR SOLICIT.
(a) The Executive recognizes that the services to be performed by him
hereunder are special, unique and extraordinary. The parties confirm that it is
reasonably necessary for the protection of the Corporation that the Executive
agree, and accordingly, the Executive does hereby agree, that he shall not,
directly or indirectly, at any time during the "Restricted Period" within the
"Restricted Area" (as those terms are defined in Section 9(e) below):
(i) except as provided in Subsection (c) below, engage in any
line of business in which the Corporation was engaged or had a formal plan to
enter during the period of Executive's employment with the Corporation,
including but not limited to the business of operating an online insurance
marketplace, either on his own behalf or as an officer, director, stockholder,
partner, consultant, associate, employee, owner, agent, creditor, independent
contractor, or co-venturer of any third party; or
(ii) solicit to employ or engage, for or on behalf of himself or
any third party, any employee or agent of the Corporation.
(b) The Executive hereby agrees that he will not, directly or
indirectly, for or on behalf of himself or any third party, at any time during
the Term and during the Restricted Period solicit any customers of the
Corporation with respect to products competitive with products then being sold
by the Corporation.
(c) If any of the restrictions contained in this Section 9 shall be
deemed to be unenforceable by reason of the extent, duration or geographical
scope thereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope, or other
provisions hereof, and in its reduced form this Section shall then be
enforceable in the manner contemplated hereby.
(d) This Section 9 shall not be construed to prevent the Executive
from owning, directly or indirectly, in the aggregate, an amount not exceeding
five percent (5%) of the issued and outstanding voting securities of any class
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of any corporation whose voting capital stock is traded or listed on a national
securities exchange or in the over-the-counter market.
(e) The term "RESTRICTED PERIOD," as used in this Section 9, shall
mean the period of the Executive's actual employment hereunder, plus twelve (12)
months after the date the Executive is actually no longer employed by the
Corporation. The term "RESTRICTED AREA" as used in this Section 9 shall mean the
continental United States.
(f) The provisions of this Section 9 shall survive the termination of
the Executive's employment hereunder and until the end of the Restricted Period
as provided in Section 9(e) hereof except in the event that this Agreement is
terminated pursuant to Section 5(a)(iv) or (vi), hereof, in which case such
provisions shall not survive termination of this Agreement. In no event shall
the terms of Section 9 be enforceable, should the Corporation be in default of
any of its obligations to the Executive at the time of his termination of
employment by the Corporation.
10. MISCELLANEOUS.
(a) The Executive acknowledges that the services to be rendered by him
under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, the Executive agrees that any breach or threatened
breach by him of Sections 8 or 9 of this Agreement shall entitle the
Corporation, in addition to all other legal remedies available to it, to apply
to any court of competent jurisdiction to seek to enjoin such breach or
threatened breach. The parties understand and intend that each restriction
agreed to by the Executive hereinabove shall be construed as separable and
divisible from every other restriction, that the unenforceability of any
restriction shall not limit the enforceability, in whole or in part, of any
other restriction, and that one or more or all of such restrictions may be
enforced in whole or in part as the circumstances warrant. In the event that any
restriction in this Agreement is more restrictive than permitted by law in the
jurisdiction in which the Corporation seeks enforcement thereof, such
restriction shall be limited to the extent permitted by law. The remedy of
injunctive relief herein set forth shall be in addition to, and not in lieu of,
any other rights or remedies that the Corporation may have at law or in equity.
(b) Neither the Executive nor the Corporation may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other; provided however that the Corporation shall have the right
to delegate its obligation of payment of all sums due to the Executive
hereunder, provided that such delegation shall not relieve the Corporation of
any of its obligations hereunder.
(c) This Agreement constitutes and embodies the full and complete
understanding and agreement of the parties with respect to the Executive's
employment by the Corporation, supersedes all prior understandings and
agreements, whether oral or written, between the Executive and the Corporation,
and shall not be amended, modified or changed except by an instrument in writing
executed by the party to be charged. The invalidity or partial invalidity of one
or more provisions of this Agreement shall not invalidate any other provision of
this Agreement. No waiver by either party of any provision or condition to be
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performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
(d) This Agreement shall inure to the benefit of, be binding upon and
enforceable against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
(f) All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by registered or certified
mail, return receipt requested, postage prepaid, or by private overnight mail
service (e.g. Federal Express) to the party at the address set forth above or to
such other address as either party may hereafter give notice of in accordance
with the provisions hereof. Notices shall be deemed given on the sooner of the
date actually received or the third business day after sending.
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to such State's
conflicts of laws provisions and each of the parties hereto irrevocably consents
to the jurisdiction and venue of the federal and state courts located in the
State of Delaware.
(h) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument. The parties hereto have
executed this Agreement as of the date set forth above.
CORPORATION: EXECUTIVE:
HEALTH BENEFITS DIRECT CORPORATION Xxxxx Xxxxxxx
By: /s/ Xxxxxxx Xxxxx /s/ Xxxxx Xxxxxxx
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Signature
Title: President & COO
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