Employment Agreement - ActaMed Corp. and Michael K. Hoover
EMPLOYMENT AGREEMENT
THE AGREEMENT, entered into as of this 23rd day of September, 1992, by
and between ACTAMED CORP., a Georgia corporation (the "Company") and
MICHAEL K. HOOVER ("Employee").
W I T N E S S E T H :
WHEREAS, the Company and Employee desire to enter into an employment
agreement on the terms stated herein;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement the following
capitalized terms shall have the definition set forth below.
(a) "CAUSE" means:
(i) conviction of Employee of a felony; or
(ii) Employee's use of alcohol or drugs to an extent that
materially interferes with Employee's performance of his duties or
employment; or
(iii) Employee has engaged in fraud, misappropriation,
embezzlement, or other acts involving moral turpitude; or
(iv) Employee has committed a willful act of dishonesty in
the course of his duties which injures the Company; or
(v) Employee has repeatedly disregarded policy directives
from the Company's Chief Executive Officer, President or Board of
Directors; or
(vi) Employee violates his covenants under paragraph 7(a) or
breaches the nondisclosure agreement executed pursuant to paragraph 6.
(b) "DISABILITY" means incapacity due to physical or mental illness
or injury that is permanent in nature and prevents Employee from performing
the substantial and material duties of his employment hereunder. Any such
disability shall be deemed to be permanent in nature if any physician
designated by the Company certifies in writing to the Company that such
disability can be expected to last for a period of at least six (6)
continuous months.
2. EMPLOYMENT AND DUTIES. Employee shall perform such duties and
responsibilities as are assigned to him from time to time by the Chairman of
the Board of the Company. Employee agrees that during the term of his
employment, he will devote his full
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productive time to the Company, not work for anyone else, or engage in any
activity in competition with or detrimental to the Company; provided,
however, that Employee at the direction of the Chairman of the Board of the
Company shall perform duties and services for Actamed Development Corp.
3. BASE COMPENSATION.
(a) In consideration of the services rendered by Employee, the
Company will pay Employee during the term of this Agreement an annual base
salary of $85,000.00 or such other amount as determined from time to time by
the Board of Directors of the Company ("Base Compensation"). Such Base
Compensation shall be payable in accordance with the regular payroll
practices of the Company.
(b) The Company's Board of Directors may review the then-current
level of Employee's annual base salary for potential adjustment and shall
advise Employee, in writing, of such adjustment, if any, or may state, in
writing, that no adjustment will be made.
4. STOCK OPTIONS. Simultaneously with the execution of this Agreement,
Employee will be granted an option to purchase 10,000 shares of Company
common stock pursuant to that certain Nonstatutory Stock Option Agreement of
even date herewith between the Company and Employee (the "Option Agreement").
5. TERM AND SEVERANCE PAY.
(a) Employee's employment hereunder shall be effective as of the
date of this Agreement and shall continue in force until terminated as set
forth in paragraph 5(b) below.
(b) Employee's employment hereunder may be terminated only:
(i) by mutual agreement of the Company and Employee;
(ii) by the Company immediately for Cause;
(iii) by Employee, upon not less than ninety (90) days prior
written notice to the Company;
(iv) by the Company without Cause or without any reason upon
not less than ninety (90) days prior written notice; provided, however,
that the Company may, at its option, terminate Employee prior to the
expiration of such ninety (90) day period subject to the obligation of
paying Employee for the remainder of such period;
(v) by the Company upon the Disability of Employee; or
(vi) Upon the death of Employee.
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(c) In the event of Employee's termination of employment with the
Company in accordance with subparagraphs 5(b)(i), 5(b)(ii) or 5(b)(iii)
above, then:
(i) Employee's right to exercise any outstanding options
pursuant to the Option Agreement shall terminate immediately upon such
event; and
(ii) If the common stock of the Company is not publicly traded
(as described in Section 6(a) or 6(b) of the 1992 Stock Option Plan of
the Company) ("Publicly Traded"), then, for a period of ninety (90) days
following the occurrence of any event described in 5(b)(i), 5(b)(ii) or
5(b)(iii), the Company shall have an option to purchase any or all of
the Option Shares acquired by Employee pursuant to the Option Agreement.
The terms and conditions of such option to purchase shall be as provided
in subparagraph 9(a)(i) of the Option Agreement.
(d) If at a time when the common stock of the Company is not
Publicly Traded, Employee's employment with the Company is terminated in
accordance with subparagraphs 5(b)(iv), 5(b)(v) or 5(b)(vi) herein:
(i) then Employee or his personal representative shall elect
(hereinafter referred to as the "Severance Election") to:
(A) Retain all of his Option Shares (as defined in the
Option Agreement) subject to the terms and conditions of the
Option Agreement, and to retain the option to purchase any
remaining vested Option Shares pursuant to the terms of the Option
Agreement (hereinafter the rights under this subparagraph
5(d)(i)(A) may be referred to as the "Option Feature"); or
(B) Receive severance pay equal to the aggregate Base
Compensation which Employee had received from the Company in the
three (3) years (or such lesser period which Employee was employed
by the Company) immediately prior to the event occurring which
entitled Employee to elect such severance pay (hereinafter referred
to as the "Severance Pay Feature"). If Employee or his personal
representative elects to receive such Severance Pay Feature, such
amount shall be paid to Employee or his personal representative in
the same method as Employee was receiving Base Compensation while
employed by the Company. By way of example, if Employee was paid
Base Compensation in the amount of $30,000 in his first year of
employment with the Company (paid in weekly installments), and was
paid $20,000 over the following six (6) month period (in weekly
installments) before being terminated by the Company without Cause;
then, upon Employee or his personal representative electing to
receive the Severance Pay Feature, Employee or his personal
representative would be entitled to receive $30,000 paid over a one
(1) year period in weekly installments, followed by $20,000 to be
paid over the following six (6) month period in weekly installments.
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The Severance Election must be exercised in writing by
Employee or his personal representative within ten (10) days of Employee or
his personal representative receiving written notification from the Company
of such right to make such Severance Election. If Employee or his personal
representative does not make such Severance Election in accordance with such
requirements, the Company, and not Employee, shall have the right to make
such Severance Election. In the event Employee or his personal representative
makes the severance Election (or the Company elects, in the event Employee
fails to elect as provided herein) to receive the Severance Pay Feature, all
of Employee's option privileges under the Option Agreement shall expire
as of the date of the event occurring which entitled Employee to make the
Severance Election. Thereafter, neither Employee or his personal
representative shall have the right to purchase any Option Shares and
Employee or his personal representative shall promptly endorse in blank and
deliver to the Company all Option Shares then owned by Employee. All such
Option Shares shall be deemed canceled as of the date of such election.
Neither Employee nor his personal representative shall be entitled to receive
any consideration for the return of such Option Shares or the termination of
the right to purchase any additional Option Shares under the Option Agreement.
(ii) For a period of one hundred eighty (180) days following
the date of exercise of the Severance Election by Employee to retain the
Option Feature, the Company shall have an option to terminate all of
Employee's option privileges under the Option Agreement and to purchase
all of the Option Shares acquired by Employee pursuant to the Option
Agreement. The terms and conditions of such option shall be as provided
in subparagraph 9(a)(ii) of the Option Agreement.
(e) If at a time when the Common Stock of the Company is
Publicly Traded, Employee's employment with the Company is terminated in
accordance with subparagraphs 5(b)(iv), 5(b)(v) or 5(b)(vi), then:
(i) Employee shall not have any right to make the Severance
Election;
(ii) Employee's right to exercise any options for unvested
Option Shares pursuant to the Option Agreement shall terminate
immediately upon such event;
(iii) Employee may retain all of his Option Shares subject to
the terms and conditions of the Option Agreement; and
(iv) Employee's right to exercise any options for Option
Shares which are vested in accordance with paragraph 1(b) of the Option
Agreement at the time of Employee's termination of employment shall
continue to be effective until the termination of the options in
accordance with the terms of the Option Agreement.
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(f) Employee shall be entitled to be reimbursed in accordance
with the policies of the Company, as adopted from time to time, for all
reasonable and necessary expenses incurred by Employee in connection with the
performance of Employee's duties of employment hereunder.
(g) The obligations of the parties under subparagraphs 5(c), 5(d)
and 5(e) shall survive the termination of Employee's employment hereunder and
shall not be extinguished thereby.
6. CONFIDENTIAL RELATIONSHIP AND PROTECTION OF TRADE SECRETS AND
CONFIDENTIAL INFORMATION. At the time of execution hereof, Employee shall
execute a nondisclosure agreement in the form which is executed by other
employees of the Company.
7. COVENANT NOT-TO-COMPETE.
(a) During the term of his employment with the Company, Employee
owes a duty of good faith and loyalty to the Company.
(b) Employee agrees that, in the event of a termination of
Employee's employment. Employee will not, for a period of one (1) year after
such termination, without the prior written consent of the Company, (i)
either directly or indirectly, on his own behalf or on the service of on
behalf of others, solicit, divert or appropriate, or attempt to solicit,
divert or appropriate, to any Competing Business, as hereinafter defined, any
customer or prospective customer of the Company or Actamed Development Corp.
with whom Employee had contact on behalf of the Company or Actamed
Development Corp. within one (1) year prior to such termination of employment
or (ii) perform similar services for a Competing Business as those which he
performed for the Company or Actamed Development Corp. during the one (1)
year period prior to such termination of employment.
(c) Employee agrees that, in the event of a termination of
Employee's employment hereunder, Employee will not, for a period of one year
after such termination, without the prior written consent of the Company,
either directly or indirectly, on his own behalf or on the service of or on
behalf of others, solicit, divert or hire away, or attempt to solicit, divert
or hire away, to any Competing Business, as hereinafter defined, any person
employed by the Company or Actamed Development Corp., whether or not such
person is a full-time employee or a temporary employee of the Company or
Actamed Development Corp. and whether or not such employment is pursuant to a
written agreement and whether or not such employment is for a determined
period or is at will.
(d) As used in this Agreement, "Competing Business" means any
person or entity that is principally engaged in a business substantially the
same as the business of the Company or Actamed Development Corp.
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(e) Each of the covenants and agreements of Employee set forth
in this paragraph 7 hereof shall be deemed separate and severable, each from
the other, and should any such separate and severable covenant or agreement,
or any part thereof, be declared invalid or unenforceable by a court of
competent jurisdiction from which no appeal is timely taken, such declaration
of invalidity or enforceability shall not in any way affect or limit the
validity or enforceability of any other covenant or agreement, or part
thereof, not also declared invalid or unenforceable, each of which shall
remain binding on Employee in accordance with its respective terms. Further,
if any such covenant or agreement is so declared to be invalid or
unenforceable, Employee shall, as soon as possible, execute a supplemental
agreement with the Company granting to the Company, to the extent legally
permissible, the protection intended to be afforded to the Company and
Actamed Development Corp. by the covenant or agreement so declared invalid
or unenforceable.
8. SPECIFIC ENFORCEMENT. The Company and Employee agree a violation
of paragraph 7 of this Agreement will cause irreparable injury to the Company
and its affiliates and that, accordingly, the Company will be entitled, in
addition to any other rights and remedies it may have at law or in equity, to
seek an injunction enjoining and restraining Employee from doing or planning
to do any such act and any other violation or threatened violation of
paragraph 7.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia. Any action in law or
equity regarding this Agreement or Employee's rights hereunder may only be
brought in the State of Georgia.
10. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be valid or unenforceable for any reason by
final judgment of a court of competent jurisdiction, the remaining provisions
or portions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law. Failure to
insist upon strict compliance with any provision of this Agreement shall not
be deemed a waiver of such provision or any other provision of this Agreement.
11. NO SET-OFF. The existence of any claim, demand, action or cause of
action of Employee against the Company, whether or not based upon this
Agreement, will not constitute a defense to the enforcement by the Company of
any covenant or agreement of Employee contained herein.
12. 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
this provision shall not prevent Employee from designating one or more
beneficiaries to receive any amount after his death and shall not preclude
his executor or administrator from assigning any right hereunder.
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to the person or persons entitled thereto, and in the event of Employee's
death or a judicial determination of Employee's incompetence, Employee's
rights under this Agreement shall survive and shall inure to the benefit of
Employee's heirs, beneficiaries and legal representatives.
13. SOURCE OF PAYMENTS. All payments provided under this Agreement
shall be paid in cash from the general funds of the Company, and no special
or separate fund shall be established and no other segregation of assets
shall be made to assure payment.
14. TAX WITHHOLDING. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall
be required pursuant to any law or governmental regulation or ruling.
15. NOTICES. Any notice or communication between the Company and
Employee with respect to his Agreement or events covered thereby shall be
performed or confirmed in writing and be deemed given when personally
delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid or dispatched by any overnight delivery service as
follows:
If to the Company:
Actamed Corp.
5 Concourse Parkway
Suite 250
Atlanta, Georgia 30328
If to Employee:
5010 McPherson Drive
Roswell, Georgia 30075
or at such other address as either party may have furnished to the other in
accordance herewith except that notices of change of address shall be
effective only upon receipt.
16. AMENDMENT, TERMINATION, WAIVER. No provision of this Agreement may
be amended, modified or waived unless in writing executed by the Company and
Employee. No waiver by either party hereto of any breach by the other party
hereto of any condition or any provisions of this Agreement to be performed
by such other party shall be deemed a waiver of a subsequent breach of such
condition or provision or waiver of a similar or dissimilar condition or
provision at the same time or any subsequent time.
17. SUCCESSORS.
(a) This Agreement may not be assigned, transferred or conveyed
by the Company except to a person or entity that acquires all or
substantially all of the business of the
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Company (whether such acquisition is by way of acquisition or assets,
acquisition of stock, merger, consolidation or otherwise).
(b) Employee may not assign, transfer or convey this Agreement.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will constitute an original but all of which
together will constitute but a single document.
19. PRIOR AGREEMENTS. Except for the nondisclosure agreement executed
pursuant to paragraph 6, this Agreement supersedes all previous agreements
between the Company and Employee concerning terms and conditions of the
employment of Employer by the Company, and all such previous agreements are
hereby canceled by mutual consent.
20. BINDING EFFECT. This Agreement shall be binding on the parties to
this Agreement and on their respective heirs, administrators, executors,
successors and assigns.
IN WITNESS WHEREOF, Employee has hereunder set his hand and seal, and the
Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
EMPLOYEE:
/s/ Michael K. Hoover
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Michael K. Hoover
Witness:
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ACTAMED CORP.
By: /s/ P.E. Sadler
-------------------------------
P.E. Sadler, Chairman of Board
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FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT, entered into as of this 3rd day of December, 1993, by
and between ACTAMED CORP., a Georgia corporation (the "Company") and MICHAEL
K. HOOVER ("Employee") hereby amends that certain Employment Agreement, dated
as of September 23, 1992, by and between the Company and Employee (the
"Employment Agreement").
W I T N E S S E T H:
WHEREAS, the Company and Employee entered into Nonstatutory Stock Option
Agreements, dated September 23, 1992 (as amended March 23, 1993), March 23,
1993 and December 1, 1993, respectively (collectively the "Original Option
Agreements"); and
WHEREAS, the Company and Employee on the date hereof have amended and
restated the Original Option Agreements and have entered into Amended and
Restated Nonstatutory Stock Option Agreements of even date hereof (the
"Restated Agreements"), which Restated Agreements replace and supersede the
Original Option Agreements; and
WHEREAS, the Company and Employee desire to amend the terms of the
Employment Agreement on the terms stated herein, to conform with replacement
of the Original Option Agreements with the Restated Agreements;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. Section 4 of the Employment Agreement is deleted in its entirety and
replaced with the following new Section 4:
"4. STOCK OPTIONS. Simultaneously with the execution of that certain
Amendment to this Agreement, dated December 3, 1993, by and between the
Company and Employee (the "Amendment"), the Company and Employee have
terminated the Original Option Agreements (as defined in the Amendment) and
have entered into the Restated Agreements (as defined in the Amendment)."
2. Paragraph (d) of Section 5 is deleted in its entirety and replaced
with the following paragraph (d):
"(d) Intentionally Deleted."
3. Paragraph (e) of Section 5 is deleted in its entirety and replaced
with the following paragraph (e):
"(e) Intentionally Deleted."
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4. Paragraph (g) of Section 5 is deleted in its entirety and replaced
with the following paragraph (g):
"(g) The obligations of the parties under paragraph 5(c) shall survive
the termination of Employee's employment hereunder and shall not be
extinguished thereby."
5. Section 15 is changed by indicating the address of the Company as:
ActaMed Corp.
7000 Central Parkway, Suite 620
Atlanta, Georgia 30328
6. this Amendment shall be governed by and construed in accordance
with the laws of the State of Georgia. Any action in law or equity regarding
this Amendment or Employee's rights hereunder may only be brought in the
State of Georgia.
7. No provision of this Amendment may be amended, modified or waived
unless in writing executed by the Company and Employee.
8. This Amendment may not be assigned, transferred or conveyed by the
Company except to a person or entity that acquires all or substantially all
of the business of the Company (whether such acquisition is by way of
acquisition of assets, acquisition of stock, merger, consolidation or
otherwise). Employee may not assign, transfer or convey this Amendment.
9. This Amendment may be executed in one or more counterparts, each
of which will constitute an original but all of which together will
constitute but a single document.
10. This Amendment shall be binding on the parties to this Amendment
and on their respective heirs, administrators, executors, successors and
assigns.
11. Except as specifically amended hereby, the Employment Agreement
shall remain in full force and effect as in force and effect on the date
hereof.
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IN WITNESS WHEREOF, Employee has hereunder set his hand and seal, and
the Company has caused this Agreement to be executed by its duly authorized
officer as of the day and year first above written.
EMPLOYEE:
/s/ Michael K. Hoover
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Michael K. Hoover
Witness:
/s/ Nancy J. Ham
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ACTAMED CORP.
By: /s/ PE Sadler
---------------------------------
P. E. Sadler, Chairman of Board