Exhibit 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of February 1, 2002 (the
"Agreement") by and between Medix Resources, Inc., a Colorado corporation
with its principal offices located at Suite 1830, 420 Lexington Avenue, New
York, New York, ("the Company") and Xxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Executive is currently serving as the President and
Chief Executive Officer and the Company desires to induce the Executive to
continue to serve in such capacity effective February 1, 2002 and the
Executive is willing to continue to serve in such capacity, on the terms and
conditions herein set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. Employment. The Company agrees to continue to employ the
Executive, and the Executive agrees to serve the Company as its President and
Chief Executive Officer upon the terms and conditions set forth herein. The
Executive hereby represents and warrants that he has legal capacity to
execute and perform this Agreement, that it is a valid and binding Agreement
enforceable against him according to its terms, and that its execution and
performance by him do not violate the terms of any existing agreement or
understanding to which the Executive is a party.
2. Position and Responsibilities. During the Term, the
Executive agrees to serve as President and Chief Executive Officer. The
Executive shall be responsible for the Company's overall executive leadership
and management and shall have full authority and responsibility with respect
thereto, including the matters set forth in the Job Description attached
hereto as Exhibit A, subject to the supervision, restrictions, limitations
and guidelines set forth by the Board of Directors in resolutions adopted in
the minutes of the Board of Directors meetings, copies of which shall be
provided to the Executive.
3. Term of Employment. The term of the Executive's employment
under this Agreement shall commence on February 1, 2002 ("Effective Date")
and, subject to earlier termination provisions pursuant to Section 7, shall
continue for one (1) year from the Effective Date. This Agreement shall
automatically renew for one or more additional one (1) year periods unless
the Company or the Executive delivers to the other party, a written notice of
intention not to renew in a form and manner prescribed herein, at least
ninety (90) days prior to the expiration of this Agreement. It is
acknowledged and agreed by the parties that failure to renew the Executive's
contract shall not be deemed to be "Termination Without Cause" hereunder.
The "Term" as used herein shall mean the term of this Agreement and any
renewal term thereof.
4. Duties. During the Term, except for illness, incapacity or
reasonable vacation periods of no more than 4 weeks in any calendar year (or
such other periods as shall be consistent with the Company's policies for
other key executives), the Executive shall devote his full attention, best
efforts and all of his business time and skill exclusively to the business
and affairs of the Company, and its affiliated Company and shall perform and
discharge well and faithfully the duties which may be assigned to him from
time to time, and which are consistent with his position and status, as such
business and affairs now exist and as they may be hereinafter changed. With
approval of the Board of Directors of the Company, however, the Executive may
serve, on other boards of directors of, or hold any other offices or
positions in companies or organizations which, in such Board's judgment, will
not present any conflict of interest with the Company or any of its
subsidiaries or affiliates or divisions, or materially affect the performance
of Executive's duties pursuant to this Agreement; and further provided that
the outside business is not a "Business Opportunity" of the Company, as
defined herein. A Business Opportunity of the Company shall be a product,
service, investment, venture or other opportunity, which is either:
(a) Directly related to or within the scope of the existing business of the
Company; or
(b) Within the logical scope of the business of the Company, as such scope
may be expanded or altered from time-to-time by the
Board of Directors.
The terms "affiliate" or "affiliated Company" as used herein mean any company
directly or indirectly controlling, controlled by or under common control
with the other company. A presumption of control shall exist for any person
owning or controlling 10% or more of the outstanding voting securities of a
company, and any officer, director or general partner of a company.
5. Compensation.
(a) Base Salary. The Company shall pay to the Executive as
compensation for his services, the base salary of $275,000 per annum ("Base
Salary") as of the Effective Date of the Agreement. The Base Salary may be
increased, but not decreased, from time-to-time by the Board of Directors.
Base Salary shall be payable bi-weekly in accordance with the Company's
normal payroll procedures.
(b) Bonus Plan. In addition to the Base Salary, Executive
shall be eligible to earn a performance-based bonus in a bonus plan set forth
and attached hereto as Exhibit B, the terms and provisions of which have been
authorized by the Board of Directors. Executive shall not be entitled to
receive the Bonus for any calendar year if he resigns from the Company or is
terminated by the Company for cause at any time during such calendar year.
(c) Option Award. Upon the execution of this Agreement by the
Company and Executive, Executive will receive a grant of options to purchase
up to 200,000 shares of the common stock of the Company under the Company's
1999 Stock Option Plan, at an exercise price that is the closing price of the
Company's stock on the date of December 18, 2001, subject to the terms and
conditions of the Stock Option Plan. Such options are intended to be
classified as incentive stock options for tax purposes, and shall vest and
expire and be subject to such other terms as provided on Exhibit C attached
hereto. The terms of the stock option grant are set forth in a Stock Option
Agreement in the form used pursuant to such Plan and attached to this
Agreement.
(d) Other Compensation. In addition, during the term of this
agreement, Executive shall be eligible to receive residual commissions
provided for in his prior employment agreement, dated December 1, 1999.
(e) Medical Coverage and Other Employee Benefits. Except as
modified by this Agreement, the Executive will be eligible to participate in
such of the Company's employee benefits programs as are generally available
to senior executives of the Company, now or hereafter established and
maintained by the Company, to the extent permissible under the general terms
and provisions of such plans or programs, and in accordance with the
provisions thereof, including health insurance with limited Company payments,
long-term disability plans, limited sick time accrual plans, 401(k) Plan
participation when eligible, and term life insurance at Executive's expense,
on the same basis as other senior executives of the Company. Where
applicable, the Executive shall be designated as a "key" employee.
(f) Vacation Time. The Executive shall be entitled to four (4)
weeks paid vacation per calendar year. Such vacation may not be taken in any
greater than two (2) consecutive week increments. Vacation not used by the
Executive during the calendar year shall be forfeited. Compensation for
unused vacation time shall be paid to the Executive on the Date of
Termination, as defined herein.
6. Business Expense Reimbursement. The Company shall reimburse
the Executive for all reasonable and necessary expenses incurred by the
Executive in connection with the performance of his duties under this
Agreement, including entertainment, travel and lodging costs, subject to the
Executive's presentation of an appropriate itemized accounting of such
expenses on a monthly basis, in such form as is required by the Company's
accounting policies.
7. Effect of Termination of Employment.
(a) Without Cause Termination by the Company. After the
completion of the initial year of employment hereunder, the Company may
terminate the employment of the Executive without cause upon sixty (60) days
written notice. In the event that the Executive's employment terminates due
to a Without Cause Termination, earned but unpaid Base Salary and Bonus as of
the Date of Termination (as defined in Section 15(b) the "Accrued
Obligations" shall be payable in full. Subject to: (1) the Executive's
continuing compliance with his obligations under the provisions of Section 9
below; and (2) the Executive's execution and delivery to the Company of a
Separation Agreement which shall include an irrevocable general release of
all claims, in a form acceptable to the Company, the Company shall
additionally:
(i) continue to pay the Executive's Base Salary, as in effect at the Date
of Termination, for a period of six (6) months following
the Date of Termination, and
(ii) pay to the Executive a pro-rata share of any eligible bonus amounts in
the event of a termination during the calendar year in
which the bonus is earned.
With respect to the payments provided for in this Section 7(a), the Executive
shall be entitled, to the extent permitted by law, as determined by the
Company in good faith, to participate in any compensation deferral plans or
arrangements then provided by the Company to senior executives.
(b) Disability. In the event of the Executive's Disability,
the Company may, by giving a Notice of Disability as provided in Section
15(b), remove the Executive from active employment and in that event shall
provide the Executive for six (6) months with the same payments and benefits
as those provided in Section 7(a), except Base Salary payments shall be
offset by any amounts otherwise payable to the Executive under the Company's
disability program generally available to other employees.
(c) Death. In the event of the Executive's death during the
Term of this Agreement, this Agreement shall terminate immediately. Upon
Executive's death, the Company shall pay in a lump sum, within forty-five
(45) days of the Executive's death, to such person as the Executive shall
have designated to the Company as his beneficiary, or, if no such person is
designated, to the Executive's estate, an amount equal to the Accrued
Obligations as of the date of death, the value on the Company's books of any
accrued but unused vacation time and accrued and unused sick time, and all
unpaid expense reimbursements at the time of Executive's death. No other
payments shall be made, or benefits provided, by the Company to the
Executive's beneficiary or the Executive's estate.
(d) Termination by the Executive. The Executive, with or
without cause, may terminate this Agreement upon sixty, (60) days' written
notice to the Company in accordance with Section 15 herein. The Executive
shall be required to render the services required under this Agreement during
such 60-day period, unless otherwise directed by the Board of Directors. In
the event the Executive terminates employment under this Section 7(c),
Executive shall only be entitled to Accrued Obligations as of the Termination
Date, and the Company shall thereupon have no further obligations to the
Executive under this Agreement, except as may be required by operation of
law.
(e) Termination for Cause. At anytime during the Term of this
Agreement, the Executive may be terminated for cause, as defined herein. In
such event, the Company, without liability, may terminate the Executive's
employment hereunder for cause upon ten (10) days' advance written notice,
including the reasons therefore. If the Executive desires to contest the
determination to terminate his employment for cause, he may request, in
writing and within five (5) business days of the written notice to him of his
termination, that a meeting of the full Board of Directors be called to hear
his views on the matter. Such meeting shall take place within thirty (30)
days of such written notice. During such period, unless otherwise agreed
between the parties, Executive shall be on paid leave. The Board shall make
its decision at the meeting and if it is in the Executive's favor, he shall
immediately resume his duties. If it is not in his favor, his employment
shall immediately terminate and thereafter, the Company's obligation
hereunder shall cease and terminate. In the event the Executive's employment
hereunder terminates due to a Termination for Cause, the Company shall pay
the Executive his Accrued Obligations only through the Effective Date of
Termination at the rate in effect at the time the notice of termination is
given, plus accrued but unpaid vacation, and vested stock options may be
exercised according to the terms and limitations of the Plan. The Company
thereupon shall have no further obligations to the Executive, except as may
be required by operation of law.
(f) Definitions. For purposes of this Agreement, the following
terms have the following meanings:
(i) "Termination for Cause" means, to the maximum extent permitted by
applicable law, a termination of the Executive's employment by the Company
because the Executive has (A) been convicted of, or has entered a plea of
nolo contendere with respect to a felony, or any misdemeanor evidencing moral
turpitude, deceit, dishonesty or fraud; (B) engaged in conduct which
constitutes a willful and continued failure to perform his duties hereunder
after notice to the Executive and reasonable opportunity to correct the same;
(C) willfully engaged in any misconduct which has the effect of being
injurious to the Company or any of its affiliates; or (D) materially fails to
perform or meet objective standards set by the Board of Directors and agreed
upon by the Executive in advance; or (E) violated the representations made in
Section 1 above, or any of the provisions of Sections 9 or 10 below.
Notwithstanding anything herein to the contrary, the Company may without
liability, terminate the Executive's employment hereunder for cause upon ten
(10) days written notice, and thereafter, the Company's obligations hereunder
shall cease and terminate.
(ii) "Without Cause Termination" means a termination of the Executive's
employment by the Company other than due to Disability or expiration of the
Term and other than a Termination for Cause.
(iii) "Disability" for purposes of this Agreement means the Executive shall
be disabled so as to be unable to perform for 90 consecutive working days, or
120 working days in the aggregate in any 365-day period, with or without
reasonable accommodation, the essential functions of his then existing
position or positions under this Agreement, as determined by the person or
entity responsible for making determinations under the Company's long-term
disability plan or, if any such person or entity is not able for any reason
to make this determination, by another independent person or entity
experienced in this field selected by the Company and acceptable to the
Executive or his representative.
Nothing contained in this Section 7 shall be deemed to limit any other
right the Company may have to terminate the Executive's employment upon any
ground permitted by applicable law.
8. Triggering Event Lump Sum Compensation. In the event of the
occurrence of a "Triggering Event," which shall be defined to include (i)
change in ownership of 50% or more of the outstanding shares of the Company,
or (ii) the merger, consolidation, reorganization or liquidation of the
Company that results in a change in ownership of 50% or more of the direct or
indirect ownership of the Company before the merger, consolidation,
reorganization or liquidation, the Executive shall receive a lump sum
compensation equal to his annual salary and incentive or bonus payments, if
any, as would have been paid to the Executive during the Company's
then-current fiscal year (as if the Executive had been employed for the full
fiscal year), within thirty (30) days of the Triggering Event. All of
Executive's granted but unvested options shall immediately vest upon the
occurrence of a Triggering Event, and all of the shares underlying all the
options held by him shall be registered on a Form S-8 (or any successor form)
in a timely manner (no more than 45 days after such Triggering Event), to be
sold to his by the Company or its successor as unrestricted and
freely-tradeable shares. If the Company has been acquired by another publicly
traded company, the Company shall cause the acquiring company to agree to
exchange its options to acquire such company's shares for the Company
options, and to cause such shares to be registered with the Securities and
Exchange Commission for sale in the public securities markets by the
Executive. Alternatively, if the Company has been acquired by a private
company, the Company shall cause such company to offer to purchase the
Executive's options upon the same terms as are offered to the Company's
shareholders in connection with such company's acquisition of control of the
Company. If the total amount of the change of control compensation were to
exceed three times the Executive's base salary (the average annual taxable
compensation of the Executive for the five years preceding the year in which
the change of control occurs), the Company and the Executive may agree to
reduce the lump sum compensation to be received by Executive in order to
avoid the imposition of the golden parachute tax provided for in the Tax
Reform Act of 1984, as amended by the Tax Reform Act of 1986.
9. Obligations of Executive During and After Employment.
(a) Confidential Information. Executive acknowledges that, by
reason of his duties, he will produce, be given, or may have access to, and
become informed of, confidential or proprietary information which the Company
possesses or to which the Company has rights, which relates to the Company,
which is not generally known to the public or in the trade, and which is a
competitive asset of the Company, or information which constitutes a "trade
secret" of the Company, ("Confidential Information"), including without
limitation, (i) the Company's planning data, marketing strategies, business
plans, expansion plans, products, business opportunity records, notebooks,
data, formulas, specifications, trade secrets, customer lists, account lists,
know-how, research and development programs, sales methods, inventions
processes, and other confidential technical or business information; (ii)
non-public terms of any new products and strategies of the Company; (iii)
non-public information relating to the Company's personnel matters; (iv) the
Company's financial results and information about their business condition;
(v) non-public terms of any material contract of the Company; (vi) the
Company's proprietary software and related documents; (vii) the Company's
client and prospect lists and contact persons at such clients and prospects;
and (viii) non-public material information concerning the Company's customers
or their operations, condition (financial or otherwise) or plans.
"Confidential Information" shall not include any information: (A) generally
known to the public except as a result of disclosure by Executive; (B)
disclosed by the Company without an obligation of confidentiality on the part
of the recipient; or (C) required to be disclosed by law, rule, regulation or
order without an obligation of confidentiality on the part of the recipient,
provided that prior to making any disclosure under this clause (C), Executive
shall provide the Company with notice and the opportunity to contest such
disclosure.
Executive acknowledges that his employment creates a relationship of
confidence and trust between himself and the Company with respect to
Confidential Information, and that Confidential Information, whether compiled
or created by him or by the Company, is and shall remain the sole property of
the Company. Executive will faithfully keep Confidential Information in
strict confidence and shall not, either directly or indirectly, at any time,
while an employee of the Company or thereafter, make known, divulge, copy,
reveal, furnish, make available, or use (except for use in the regular course
of his duties for the Company) any Confidential Information without the
written consent of the Board of Directors of the Company. Executive further
acknowledges that all records, files, business plans, documents, equipment
and the like, or copies thereof, including copies on Company computers,
relating to Company's business, or the business of an affiliated Company,
which Executive shall prepare, or use, or come into contact with, shall
remain the sole property of the Company, or of an affiliated Company, and
shall not be removed from the Company's or the affiliated Company's premises
without the written consent of the Board of Directors, and shall be promptly
returned to the Company upon termination of employment with the Company and
its affiliated Company. All equipment, software and other materials provided
to the Executive by the Company will remain the property of the Company, and
must be made available to the Company at all times for servicing, security
checks, or any other purpose and the Executive hereby agrees to turn such
items over to the Company immediately upon request. Executive understands
and acknowledges that his obligations under this Section 9 will survive
termination of his employment, and will continue indefinitely unless and
until any such Confidential Information has become, in the Company's
reasonable judgment, stale, or, through no fault of Executive's, generally
known to the public or until the Executive is required by operation of law
(after providing the Company with notice and an opportunity to contest such
requirement) to make such disclosure.
The Executive's obligations under this Section 9 are in addition to, and not
in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Company under general or specific legal
or equitable principles.
(b) Return Of All Property And Documents. Upon the termination
of his employment for any reason or no reason, the Executive immediately
shall return to the Company all of its property, including without
limitation, all documents (including copies) and information, however
maintained (including computer files, computers, equipment, tapes, and
recordings), concerning the Company or acquired by the Executive in the
course and scope of his employment (excluding only those documents relating
solely to the Executive's own salary and benefits).
(c) Non-Interference. Throughout the Term and continuing for
the twelve (12) month period immediately following the expiration of the
Term, and notwithstanding the Agreement's earlier termination except if such
termination is pursuant to Section 7(a), the Executive shall not: (i) hire
or employ, directly or indirectly, through any enterprise with which he is
associated, any employee of the Company; or (ii) recruit, solicit or induce
(or in any way assist another person or enterprise in recruiting, soliciting
or inducing) any such employee, or any consultant, vendor or supplier of the
Company to terminate or reduce such person's employment, consulting or other
business relationship with the Company.
(d) Non-Solicitation. Throughout the Term and continuing for
the twelve (12) month period immediately following the expiration of the
Term, and notwithstanding the Agreement's earlier termination except if such
termination is pursuant to Section 7(a), the Executive shall not, directly or
indirectly, in any capacity: (i) solicit the business or patronage of any
Customer, as herein defined, for any other person or entity, (ii) divert,
entice, or otherwise take away from the Company the business or patronage of
any Customer, or attempt to do so, or (iii) solicit or induce any Customer to
terminate or reduce its relationship with the Company.
(e) Non-Competition. The Executive acknowledges that, as of
the execution of this Agreement, (i) the Company is engaged in the business
of healthcare connectivity (the "Business"); (ii) the Company's Business is
conducted currently throughout the United States, and may be expanded to
other locations; (iii) his employment with the Company has given him access
to trade secrets and Confidential Information concerning the Company; and
(iv) the agreements and covenants contained in this Agreement are essential
to protect the Business and goodwill of the Company. Accordingly, the
Executive covenants and agrees as follows:
(i) Throughout the Term and continuing for a period of twelve
(12) months after termination of the Executive's employment, except if
such termination is pursuant to Section 7(a), the Executive shall not
directly or indirectly, render services to, act as an officer,
director, partner, consultant or employee of, or otherwise assist any
Competitor. "Competitor" as used herein means any person, firm or
organization (or parent, subsidiary or affiliate thereof) engaged in or
about to become engaged in research on, or the production and/or
provision of any Relevant Services, regarding which the Executive has
obtained Confidential Information by virtue of his employment with the
Company or with respect to which the Executive can exert a competitive
influence by virtue of the special and unique services he has provided
the Company.
(ii) Throughout the Term and continuing for a period of
twelve (12) months after termination, except if such termination is
pursuant to Section 7(a), the Executive shall not engage in any other
business activities directly or indirectly, which are or may be
competitive with, or which might place the Executive in a competing
position to, that of the Company or any affiliated Company;
(iii) Throughout the Term and continuing for a period of
twelve (12) months after termination, except if such termination is
pursuant to Section 7(a), the Executive shall not, directly or
indirectly, in any capacity: (A) provide or assist with the provision
of Relevant Services, except as an employee of the Company; or (B) be
employed by or affiliated or associated in a business capacity with any
person or entity in the business of providing Relevant Services other
than the Company;
(iv) If the Executive should be unable to obtain employment
consistent with his training and education solely because of the
provisions of this Section, such provisions shall be binding upon the
Executive for only so long as the Company shall make payments to the
Executive equal to his monthly Base Salary at termination (including
payment of health insurance premiums, if any, provided by the Company
on behalf of the Executive as of the date of Termination, but exclusive
of any additional compensation and all other employee benefits) for
each month in which the Executive shall: (i) be unable to obtain
employment solely because of this Section; (ii) provide the Company
with a written affidavit declaring under oath that he is not in any way
assisting a Competitor and that he has conscientiously sought
employment, but has been unable to obtain employment because of this
Section and describing in detail his efforts to obtain employment; and
(iii) provide the Company with any further information requested by the
Company to clarify, substantiate, or expand upon the statements made in
such affidavit. The Company's obligation to make or continue monthly
payments hereunder shall terminate either by the Company's giving the
Executive a written release from his obligations under this Section or
upon the Executive's obtaining employment consistent with the
provisions of this Section, whichever occurs sooner. Executive shall
promptly give written notice of such employment to the Company within
five (5) days of acceptance of such employment. The Company's
obligation to make the monthly payments hereunder shall in no event
continue more than six (6) months immediately following termination of
the Executive's employment with the Company, and in no event shall the
Company be liable under this Agreement for any action relating thereto
for any amount greater than the aggregate of such monthly payments.
Payments due hereunder, if any, shall be made in accordance with the
Company's regular procedures.
(v) Executive agrees that he will provide a copy of this
Agreement to any prospective employer with whom he is contemplating
discussing or interviewing for possible employment during the time
period during which this Section is effective.
(f) Certain Definitions. For purposes of this Agreement:
(i) "Relevant Services" shall mean (a) directly related to or
within the scope of the existing business of the Company [as an
internet based, healthcare software company] or (b) any other product
or service within the logical scope of the business of the Company as
such scope may be expanded or altered by the Board of Directors and (c)
any other services or products provided by the Company from time to
time which, at any time during the twelve (12) months preceding the
termination of the Executive's employment.
(ii) "Customer" means any person or entity to the extent that
such person or entity (A) is receiving Relevant Services from the
Company on the date of termination of the Executive's employment with
the Company, (B) received such services for compensation at any time
during the one-year period immediately preceding the date of
termination of the Executive's employment with the Company or (C) at
any time during the one-year period immediately preceding the date of
termination of the Executive's employment with the Company was
solicited by the Executive, directly or indirectly, in whole or in
part, on behalf of the Company to provide Relevant Services.
(g) Litigation and Regulatory Cooperation. During and after the
Executive's employment, notwithstanding the cause of termination, the
Executive shall cooperate fully with the Company in the defense or
prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while the Executive was employed by the Company.
The Executive's full cooperation in connection with such claims or actions
shall include, but not be limited to, being available to meet with counsel to
prepare for discovery, trial, arbitration, mediation, or other alternative
dispute resolution, and to act as a witness on behalf of the Company at
mutually convenient times. During and after the Executive's employment, the
Executive shall also cooperate fully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority
provided that such investigation or review relates to events or occurrences
which transpired while the Executive was employed by the Company. The
Company shall reimburse the Executive for any reasonable out-of-pocket
expenses incurred in connection with the Executive's performance of
obligations pursuant to this Section 9(g).
(h) Nondisparagement. During and after the Executive's
employment, notwithstanding the cause of termination, Executive agrees not to
take any action or make any statement, written or oral, to any current or
former employee of the Company or to any other person which disparages the
Company, their management, directors or shareholders, as applicable, or their
practices or which disrupts or impairs their normal operations, including
actions or statements (i) that would harm the reputation of the Company, as
applicable, with their clients, suppliers, employees or the public, or (ii)
that would interfere with existing or prospective contractual or employment
relationships with clients, suppliers or individuals.
(i) Remedies. The Company's obligation to make payments or
provide any benefits under this Agreement (except to the extent previously
vested) shall cease upon any violation of the provisions of this Section 9.
In addition, in the event of a violation by the Executive of the provisions
of this Section 9, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to
enforce the specific performance by the Executive of this Section 9 and to
enjoin the Executive from any further violation, and may exercise such
remedies cumulatively or in conjunction with such other remedies as may be
available to the Company at law or in equity. Executive agrees that
irreparable harm should be if any provision of this Section 9 is breached in
any way. The Executive agrees that it would be difficult to measure any
damages to the Company which might result from any breach by the Executive of
the promises set forth in this Section 9, and that in any event money damages
would be an inadequate remedy for any such breach. Executive agrees that
faithful adherence to the terms of this Section is an essential condition of
employment with the Company. Accordingly, the Executive agrees that if the
Executive breaches any provision of this Agreement, the Company shall be
entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach,
without the requirement of posting any bond in connection with obtaining
temporary or injunctive relief, and without showing or proving any actual
damage to the Company. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedy available to the Company for such
breach or threatened breach, including but not limited to, the recovery of
damages against the Executive.
(j) Survival; Authorization to Modify Restrictions. The
Executive acknowledges and agrees that the covenants of the Executive and the
restrictions contained in this Section 9 are intended to protect the
Company's interest in its Confidential Information and its commercial
relationships and goodwill with its customers, prospective customers,
vendors, suppliers, consultants and employees. The Executive further
acknowledges and agrees that the covenants of the Executive, and the
restrictions contained in this Section 9, shall survive termination of this
Agreement and any termination of the Executive's employment, for the periods
stated herein and shall continue in full force and effect regardless of any
change in the Executive's title, duties, responsibility, compensation or
benefits while he remains employed by the Company.
The Executive represents that he has read and understands the
provisions of this Agreement, including this Section 9 that he has had the
opportunity to consult with counsel concerning such provisions, and that he
understands the effect of such provisions on his ability to earn his
livelihood upon any termination of his employment with the Company. The
Executive acknowledges that it would cause the Company serious and
irreparable injury and cost if Executive were to use his ability and
knowledge in competition with the Company or to otherwise breach the
obligations contained in this Section 9 and, in view of the nature and level
of his responsibilities and the level of his compensation, agrees that the
provisions of this Section 9 are reasonable. Accordingly, it is the
intention of the parties that the provisions of this Section 9 shall be
enforceable to the fullest extent permissible under applicable law, but that
if any portion or provision of this Agreement shall to any extent be declared
illegal or unenforceable by a court of competent jurisdiction, then (A) the
court may amend such portion or provision so as to comply with law in a
manner consistent with the intention of this Agreement, (B) the remainder of
this Agreement, or the application of such illegal or unenforceable portion
or provision in circumstances other than those as to which it is so declared
illegal or unenforceable, shall not be affected thereby and (C) each portion
or provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
(k) Jurisdiction and Venue. The parties agree that any action
by the Company to enforce the covenants and restrictions contained in this
Section 9 or any action by either party to obtain a judgment on an
arbitrator's award referred to in Section 11 may be instituted and maintained
in the state or federal courts in New York, New York. Subject to the first
sentence of Section 11 hereof, the parties hereby irrevocably submit to the
jurisdiction of the state and federal courts in New York, New York in any
suit, action or proceeding arising under, or relating to, this Agreement and
hereby irrevocably waive any objections to the venue of any of such courts in
any such suit, action or proceeding, including any claim that any other court
constitutes a more appropriate or convenient forum.
10. Proprietary Developments.
(a) The Executive acknowledges that he has been an employee and
officer of the Company and its predecessor during the development of the
software and Intellectual Property, as defined herein, currently owned by the
Company, and the Executive makes no claim to any right, title or interest
(including patent rights, copyrights, trade secret rights, trademark rights,
sui generic database rights, and all other intellectual property rights of
any sort throughout the world), made or conceived or reduced to practice, in
whole or in part, by Executive during such employment by the Company and its
predecessors that relate to such Intellectual Property. Any and all
inventions (whether or not patentable), products, discoveries, improvements,
processes, methods, computer software programs, models, techniques, formulae,
trade secrets, service marks, patent rights, copyrights, sui generis database
rights, designs, designations, know-how, ideas, trademarks and works of
authorship (collectively, hereinafter referred to as "Intellectual
Property"), made, developed or created by the Executive (alone or in
conjunction with others, during regular hours of work or otherwise) during
the Executive's employment by the Company and its predecessors, which may be
directly or indirectly useful in, or relate to, business conducted or to be
conducted by the Company shall be the Company's exclusive property and will
be promptly disclosed by the Executive to the Company. To the fullest extent
permitted by law, such Intellectual Property shall be deemed works made for
hire.
(b) Executive hereby transfers and assigns to the
Company or its designated affiliate any right, title or interest which
Executive may have or acquire in any such Intellectual Property (including
patent rights, copyrights, trade secret rights, trademark rights, sui generis
database rights, and all other intellectual property rights of any sort
throughout the world) relating to any and all inventions (whether or not
patentable), works of authorship, designations, designs, know-how, ideas and
information made or conceived or reduced to practice, in whole or in part, by
Executive, (i) during the Term that relate to the subject matter of, or arise
out of, his services to the Company, (ii) are referred to in clause (a)
above, or (iii) constitute any Proprietary Information (as defined below)
(collectively, "Inventions"). Executive will promptly disclose and provide
all Inventions to Company. Executive waives any license or other special
right which Executive may have or accrue therein. Executive agrees to
execute any documents and to take any actions that may be required, as
reasonably determined by the Company's counsel, to effect and confirm such
transfer, assignment and waiver. Executive shall further assist Company, at
its request and expense, to further evidence, record and perfect such
assignments and to perfect, obtain, maintain, enforce and defend any rights
assigned. Executive hereby irrevocably designates and appoints the Company as
its agent and attorney-in-fact to act for and in Executive's behalf to
execute and file any documents and to do all other lawfully permitted acts to
further the foregoing with the same legal force and effect as if executed by
Consultant. The Executive shall, upon the Company's request, execute any
documents necessary or advisable in the opinion of the Company's counsel to
direct the issuance of patents, trademarks or copyrights to the Company or
its designated affiliate with respect to such Intellectual Property as are to
be the Company's exclusive property under this Section 10 or to vest in the
Company or such affiliate title to such Intellectual Property, the expense of
securing any patent, trademark or copyright, however, to be borne by the
Company or such affiliate. The Executive will keep confidential and will
hold for sole benefit of the Company any Intellectual Property which is to be
their exclusive property under this Section 10 for which no patent, trademark
or copyright is issued.
(c) Executive agrees that all Inventions and all
other business, customer, marketing, technical and financial information
(including, without limitation, the identity of and information relating to
the Company's customers or employees) that Executive developed, learned or
obtained for or about the Company and its predecessors, or that Executive
develops, learns or obtains during the Term that relate to the Company or the
business or that are received by or for the Company in confidence, constitute
"Proprietary Information," provided that Proprietary Information shall not
include information in the public domain through no fault of Executive.
Executive will hold in confidence and not disclose or, except in performing
the services hereunder, use any Proprietary Information. Upon termination of
this Agreement, and as otherwise requested by Company, Executive will
promptly return to Company all items and copies containing or embodying
Proprietary Information, except that Executive may keep personal copies of
his compensation records and this Agreement.
(d) As additional protection for Proprietary Information,
Executive agrees that during the Term and for one year thereafter, Executive
will not encourage or solicit any employee or consultant of Company to leave
Company for any reason. As further protection, Executive will not engage in
any activity that is in any way competitive with the business of the Company,
and Executive will not assist any other person or organization in competing
or in preparing to compete with any business of Company.
(e) The Executive agrees that non-public terms of Intellectual
Property shall constitute Confidential Information within the meaning of
Section 9.
(f) The foregoing provisions of this Section 10 shall be binding
upon the Executive's heirs and legal representatives. The agreements of the
Executive in this Section shall be enforceable by injunction and shall
survive the termination of this Agreement
11. Resolution of Disputes. Except as otherwise provided in
Section 9, any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in New York, New
York, by three arbitrators in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrators' award in any court having jurisdiction.
12. Full Settlement. The Company's obligation to make any
payment provided for in this Agreement and otherwise to perform its
obligations hereunder shall be in lieu of all other severance payments to the
Executive under any other severance plan, arrangement or agreement of the
Company and its affiliates, and in full settlement of any and all claims or
rights of the Executive for severance, separation and/or salary continuation
payments resulting from the termination of his employment.
13. Withholding Taxes. The Company shall withhold from any
payments made under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
14. Consolidation, Merger, or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into or
with, or transferring all or substantially all of its assets to, another
corporation or entity which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a consolidation, merger or
transfer of assets and assumption, the term "Company" as used herein shall
mean such other corporation or entity, and this Agreement shall continue in
full force and effect.
15. Notices.
(a) General. All notices, requests, demands and other
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given when delivered or 5 days after being
deposited in the United States mail, certified and return receipt requested,
postage prepaid, addressed as follows:
(i) To the Company: Xxxx X. Xxxx, Chairman of the Board
Medix Resources, Inc.
The Graybar Building, Suite 1830
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Copy to:
P.A. Xxxxxxxxx
X. X. Xxxxxxx
(ii) To the Executive: Xxxx X. Xxxxxxx, President & CEO
Medix Resources, Inc.
The Graybar Building, Suite 1830
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the addressee party shall have
previously specified in writing to the other.
(b) Notice of Termination. Except in the case of death of the
Executive, any termination of the Executives employment hereunder prior to
the expiration of the Term pursuant to Section 7, whether by the Executive or
the Company, shall be effected only by a written notice given to the other
party in accordance with this Section 15("Notice of Termination"). Any
Notice of Termination shall (i) indicate the specific termination provision
in Section 7 relied upon, (ii) in the case of a termination for Cause, set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination and (iii) specify the effective date of such
termination of employment (the "Date of Termination"), which shall not be
less 10 days nor more than 90 days after such notice is given. The failure
of the Executive or the Company to set forth in any Notice of Termination any
fact or circumstance which contributes to a showing of Cause shall not waive
any right of the Executive or the Company hereunder or preclude the Executive
or the Company from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
16. Indemnification. The Company shall indemnify and hold
harmless Executive to the full extent required by law. To the extent that
any of the Company's officers or directors are covered by or benefit from one
or more, Director and Officers' liability insurance policies, the Executive
shall also be covered by or benefit from such policy or policies.
17. No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; provided,
---------
however, that nothing in this Section 17 shall preclude the assumption of
such rights by executors, administrators, or other legal representatives of
the Executive or his estate or their assigning any rights hereunder to the
person or persons entitled thereto.
18. Binding Agreement. This Agreement shall be binding upon,
and shall inure to the benefit of, the Executive and the Company and, as
permitted by this Agreement, their respective successors, assigns, heirs,
beneficiaries and representatives.
19. Counterparts; Headings; Interpretation. This Agreement may
be executed in counterparts, each of which, when executed, shall be deemed to
be an original and all of which together shall be deemed to be one and the
same instrument. The underlined Section headings contained in this Agreement
are for convenience of reference only and shall not affect the interpretation
or construction of any provision hereof. This Agreement is the result of
negotiation and compromise between the parties hereto, each represented by
counsel. The fact that either party, in the course of negotiations, agreed
to an addition, deletion or change requested by the other party in the
language of this Agreement shall not be deemed an admission of fact by the
party agreeing to such change.
20. Arbitration. Except as otherwise provided in Section 9,
any controversy, dispute or claim arising out of, or relating to this
Agreement and/or its interpretation shall be settled by binding arbitration
in New York, New York in accordance with the Rules of the American
Arbitration Association for employment disputes then in effect. The award
rendered by the arbitrators shall be final and judgment may be entered upon
the award in any court having jurisdiction. If any legal proceeding and/or
arbitration is brought to enforce or interpret the terms of this Agreement,
each party shall bear its own attorney's fees, costs, and necessary
disbursements in such legal proceeding and/or arbitration except as otherwise
provided herein.
21. General Provisions.
(a) Non-Assignment. The Executive's rights and obligations
under this Agreement shall not be transferable by assignment or otherwise,
nor shall Executive's rights be subject to encumbrance or to the claims of
the Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company, with or its merger into, any other corporation,
or the sale by the Company of all or substantially all of its property or
assets. However, the rights of the Executive hereunder shall be enforceable
against any successor to the Company, and the rights of the Company hereunder
shall benefit any successor to the Company.
(b) Entire Agreement; Amendments. This Agreement and the
rights of Executive with respect to the obligations and benefits of
employment recited in this Agreement, constitute the entire Agreement between
the parties hereto in respect of the employment of the Executive by the
Company and supersede any and all other agreements either oral or in writing
between the parties hereto with respect to the employment of the Executive.
No amendment or waiver of this Agreement or any provision hereof shall be
effective unless contained in a writing executed by the party against whom
such amendment or waiver is asserted, and in the case of the Company, by its
duly authorized officer.
(c) Divisible. The provisions of this Agreement shall be
regarded as divisible, and if any of said provisions or any part there of are
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts
there of and the applicability there of shall not be affected thereby.
(d) Governing Law. The validity, interpretation, performance
and enforcement of this Agreement shall be governed exclusively by the laws
of the State of New York, without regard to principles of conflicts of laws
thereof.
(e) Construction. Throughout this Agreement, the singular
shall include the plural, and the plural shall include the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
(f) Text to Control. The headings of paragraphs and sections
are included solely for convenience of reference. If any conflict between
any heading and the text of this Agreement exists, the text shall control.
(g) Authority. The officer executing this Agreement on behalf
of the Company has been empowered and directed to do so by the Board of
Directors of the Company.
IN WITNESS WHEREOF, the Company and the Executive hereby
voluntarily execute this Agreement, as of the date first above written, after
arms-length negotiations, with the full intention to be mutually bound by the
terms hereof.
FOR THE COMPANY:
MEDIX RESOURCES, INC.
By: /s/Xxxx X. Xxxx
Xxxx X. Xxxx
Chairman of the Board
THE EXECUTIVE:
By: /s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Exhibit A
JOB DESCRIPTION
President and Chief Executive Officer
Medix Resources, Inc.
The Chief Executive Officer and President of Medix Resources, Inc. shall be
responsible for the day to day management and operation of the Company. He
shall have full authority and responsibility for the Company's balance sheet
and profit & loss statements. He will be subject to the general direction,
approval and control of the Company's Executive Committee and Board of
Directors.
RESPONSIBILITIES
o Day to day management and operation of the Company.
o Authority and responsibility of the balance sheet and profit & loss
statements.
o Provision of near term and long term budgets and plans as requested by the
Board of Directors.
o Management of budget & policies as determined by the Executive Committee,
other Board Committees and the Board of Directors.
o Management of investment banking activities.
o Management of any merger and acquisition activities.
o Development of distribution networks for the Company's products, including
any subsidiaries. .
o Management of all other executives hired by the Company for the purposes
of conducting and executing the Company's strategy and operations.
o Oversight of all public & investor relations activities.
o Organization and attendance of all monthly and quarterly Board of
Directors meetings.
o Executive shall be the Chairman of the Board for each and any of the
Company's subsidiaries, and if he is not the chief executive officer of
the subsidiary, the president, chief executive officer or chief operating
officer of the subsidiary shall report to the Executive on a mutually
agreed upon schedule, regarding the activities of the subsidiary.
Exhibit B
2002 Bonus Plan
President & Chief Executive Officer
The Board of Directors has structured a calendar year, 2002 CEO bonus program
as follows:
Max Bonus Performance
Performance Criteria Weighting Potential Thresholds
-------------------------------------------------------------------------
1. Investment
Financing (2002) o $8mm Minimum
50% $200,000 o $10mm Middle
o $15mm High
-------------------------------------------------------------------------
2. Earned Revenue
(2002) 30% $120,000 o $2.5mm Minimum
o $3.6mm Middle
o $5.0mm High
-------------------------------------------------------------------------
3. Enterprise
Development 20% $80,000 o Board Discretion
(2002)
-------------------------------====================----------------------
TOTAL 100% $400,000
-------------------------------------------------------------------------
Exhibit C
2002 Incentive Stock Options
President & Chief Executive Officer
Incentive Stock Exercise Expiration Performance Vesting
Options Price Date Requirements
-----------------------------------------------------------------------
200,000 $.70 5 Years o100,000 Minimum investment
(1/22/2007) financing
o 200,000 Target investment
financing
---------------------------------------------------------------------------
