UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): | November 27, 2007 |
Health Benefits Direct Corporation
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(Exact name of registrant as specified in its charter)
Delaware | 000-51701 | 98-0438502 |
_____________________
(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
150 North Radnor-Chester Road, Suite B-101, Radnor, Pennsylvania | 19087 | |
_________________________________
(Address of principal executive offices) |
___________
(Zip Code) |
Registrants telephone number, including area code: | (484) 654-2200 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 27, 2007 (the "Effective Date"), Health Benefits Direct Corporation (the "Company") entered into amended and restated employment agreements (each, an "Employment Agreement," and collectively, the "Employment Agreements") with each of Alvin H. Clemens, Anthony R. Verdi, and Ivan M. Spinner (each, an "Executive," and collectively, the "Executives"). The Employment Agreements replace and supersede the Executives' existing employment agreements.
Each Employment Agreement has an initial term of three years beginning on the Effective Date. The Employment Agreements automatically renew for successive additional one-year periods each unless either the Company or the Executive gives the other 60 days’ written notice prior to the end of the then current term.
Under the respective Employment Agreements, (i) Mr. Clemens will continue to serve as the Company’s Executive Chairman and Chief Executive Officer with a base salary equal to his existing base salary of $450,000 per year, (ii) Mr. Verdi will continue to serve as the Company’s Chief Financial Officer with a base salary equal to his existing base salary of $250,000 per year, and (iii) Mr. Spinner will serve as the Company’s Executive Vice President with a base salary of $371,000 per year until April 2, 2007 and a base salary of $300,000 thereafter.
Each Executive also is entitled to receive annual bonus compensation in cash, capital stock, or other property as determined by the Company’s board of directors and to participate in all benefit plans offered from time to time to the Company’s senior executives (the "Benefit Plans"). In addition, each Executive is entitled to a car allowance of at least $1,000 per month and reimbursement for up to $15,000 in dues associated with the Executive’s membership in professional and business organizations.
Certain other terms are identical among all of the Employment Agreements and are set forth below:
-The Company may terminate the Employment Agreements (i) for "Cause" (as defined in the Employment Agreements), (ii) upon 60 days’ prior written notice to the Executive if without Cause, or (iii) upon the Executive’s "Permanent Disability" as defined in the Employment Agreements. Each Executive may terminate his Employment Agreement (i) for "Good Reason" as defined in the Employment Agreements or (ii) upon 30 days’ prior written notice to the Company for any reason.
-If (i) the Company terminates an Executive’s employment without Cause or (ii) the Executive terminates his Employment Agreement for Good Reason, the Executive will be entitled to receive (x) 18 months’ base salary at the then current rate, payable in accordance with the Company’s usual practices, (y) continued participation for 18 months in the Benefit Plans and (z) payment, within a commercially reasonable time and on a prorated basis, of any bonus or other payments earned in connection with the Company’s bonus plan existing at the time of termination. In addition, if an Employment Agreement is terminated in accordance with the foregoing sentence within two months prior to, or 24 months following, a change in control (as described in the Employment Agreement), the Executive will be entitled to receive 18 months’ base salary at the then current rate upon the date of termination, regardless of the Company’s usual practices, and all Company stock options held by the Executive at the date of termination will immediately become 100% vested and all restrictions on such options will lapse.
-If the Company terminates an Executive’s employment for Cause or the Executive terminates his Employment Agreement without Good Reason, the Executive will be entitled to receive (i) all accrued and unpaid salary and vacation pay through the date of termination and (ii) continued participation for one month in the Benefit Plans.
-If the Company terminates an Executive’s employment due to a Permanent Disability, the Executive will be entitled to receive (i) 18 months’ base salary at the then current rate, payable in accordance with the Company’s usual practices, (ii) continued participation for 18 months in the Benefit Plans and (iii) payment, within a commercially reasonable time and on a prorated basis, of any bonus or other payments earned in connection with the Company’s bonus plan existing at the time of termination. The Company may credit any such amounts against any proceeds paid to the Executive with respect to any disability policy maintained and paid for by the Company for the Executive’s benefit.
-If an Executive dies during the term of his Employment Agreement, the Employment Agreement will automatically terminate and the Executive’s estate or beneficiaries will be entitled to receive (i) three months’ base salary at the then current rate, payable in a lump sum and (ii) continued participation for one year in the Benefit Plans.
-Each Executive is prohibited from competing with the Company or soliciting the Company’s employees, independent contractors, or outside agents, directly or indirectly, for another business and is subject to standard confidentiality obligations during the term of the Employment Agreements and for a period of 18 months thereafter.
-The Company and each Executive will be prohibited, following a termination of the Executive’s employment with the Company, from disparaging each other.
The foregoing brief summary of the terms of the Employment Agreements is not intended to be complete and is qualified in its entirety by reference to the Employment Agreements, which are incorporated by reference herein. The Employment Agreements are attached as exhibits 10.1, 10.2, and 10.3 to this Current Report on Form 8-K.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At the Annual Meeting of Stockholders (the "Annual Meeting") of the Company held on November 30, 2007, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation (the "Amendment") that provides that any action required or permitted to be taken by stockholders must be effected at a duly called annual or special meeting of such holders and may not be effected y any consent in writing by such holders.
To make the Company’s existing Bylaws (the "Bylaws") consistent with the Company’s Certificate of Incorporation, on October 15, 2007 the board of directors of the Company adopted an amendment to the Bylaws subject to the stockholders’ approval of the Amendment at the Annual Meeting. The amendment to the Bylaws, effective November 30, 2007, deleted in its entirety Section 7 of Article I of the Bylaws "Stockholders – Stockholder Action Without Meetings," which previously permitted stockholders to act by written consent.
The foregoing brief summary of the Amendment made to the Bylaws is not intended to be complete and is qualified in its entirety by reference to the Amended and Restated Bylaws, attached as Exhibit 3.2 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
3.2 - Amended and Restated Bylaws.
10.1 - Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Alvin H. Clemens.
10.2 - Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Anthony R. Verdi.
10.3 - Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Ivan M. Spinner.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Health Benefits Direct Corporation | ||||
December 3, 2007 | By: |
ANTHONY R. VERDI
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Name: ANTHONY R. VERDI | ||||
Title: Chief Financial Officer |
Exhibit Index
Exhibit No.
Description
Amended and Restated Bylaws.
Amended and Restated Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Alvin H. Clemens.
Amended and Restated Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Anthony R. Verdi.
Amended and Restated Employment Agreement, dated November 27, 2007, between Health Benefits Direct Corporation and Ivan M. Spinner.
Exhibit 3.2
AMENDED AND RESTATED
BY-LAWS
OF
HEALTH BENEFITS DIRECT CORPORATION
(Effective November 30, 2007)
(A Delaware Corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK.
The shares of the corporation shall be represented by certificates, or shall be
uncertificated. Certificates for the shares of stock, if any, shall be in such form as is
consistent with the Certificate of Incorporation and applicable law. Every holder of stock
represented by a certificate in the corporation shall be entitled to have a certificate signed by,
or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if
any, or by the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the corporation representing the number of shares owned by
him in the corporation. If such certificate is countersigned by a transfer agent other than the
corporation or its employee or by a registrar other than the corporation or its employee, any other
signature on the certificate may be a facsimile. In case any officer, transfer agent, or registrar
who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to
be such officer, transfer agent, or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such officer, transfer agent, or registrar at
the date of issue.
Whenever the corporation shall be authorized to issue more than one class of stock or more
than one series of any class of stock, and whenever the corporation shall issue any shares of its
stock as partly paid stock, the certificates representing shares of any such class or
series or of any such partly paid stock shall set forth thereon the statements prescribed by
the General Corporation Law. Any restrictions on the transfer or registration of transfer of
any shares of stock of any class or series shall be noted conspicuously on the
certificate representing such shares.
The corporation may issue a new certificate of stock in place of any certificate theretofore
issued by it, alleged to have been lost, stolen, or destroyed, and the Board of Directors may
require the owner of any lost, stolen, or destroyed certificate, or his legal representative, to
give the corporation a bond sufficient to indemnify the corporation against any claim that may be
made against it on account of the alleged loss, theft, or destruction of any such certificate or
the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS.
The corporation may, but shall not be required to, issue fractions of a share.
3. STOCK TRANSFERS.
Upon compliance with provisions restricting the transfer or registration of transfer of shares
of stock, if any, transfers or registration of transfer of shares of stock of the corporation shall
be made only on the stock ledger of the corporation by the registered holder thereof, or by his
attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of
the corporation or with a transfer agent or a registrar, if any, and on surrender of the
certificate or certificates for such shares of stock properly endorsed and the payment of all taxes
due thereon.
4. RECORD DATE FOR STOCKHOLDERS.
In order that the corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record
date, which record date shall not precede the date upon which the resolution fixing the record date
is adopted by the board of directors, and which record date shall not be more than sixty nor less
than ten days before the date of such meeting. If no record date has been fixed by the board of
directors, the record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting;
providing, however, that the board of directors may fix a new record date for the adjourned
meeting.
In order that the corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose
of any other lawful action, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If no record date has been fixed, the
record date for determining stockholders for any such purpose shall be at the close of business on
the day on which the board of directors adopts the resolution relating thereto.
5. MEANING OF CERTAIN TERMS.
As used herein in respect of the right to notice of a meeting of stockholders or a waiver
thereof or to participate or vote thereat or to consent or dissent in writing in lieu of a meeting,
as the case may be, the term share or shares or share of stock or shares of stock or
stockholder or stockholders refers to an outstanding share or shares of stock and to a holder
or holders of record of outstanding shares of stock when the corporation is authorized to issue
only one class of shares of stock, and said reference is also intended to include any outstanding
share or shares of stock and any holder or holders of record of outstanding shares of stock of any
class upon which or upon whom the Certificate of Incorporation confers such rights where there are
two or more classes or series of shares of stock or upon which or upon whom the General Corporation
Law confers such rights notwithstanding that the Certificate of Incorporation may provide for more
than one class or series of shares of stock, one or more of which are limited or denied such rights
thereunder; provided, however, that no such right shall vest in the event of an increase or a
decrease in the authorized number of shares of stock of any class or series which is otherwise
denied voting rights under the provisions of the Certificate of Incorporation, including any
Preferred Stock which is denied voting rights under the provisions of the resolution or resolutions
adopted by the Board of Directors with respect to the issuance thereof.
6. STOCKHOLDER MEETINGS.
TIME. The annual meeting shall be held on the date and at the time fixed, from time to time,
by the directors. A special meeting shall be held on the date and at the time fixed by the
directors.
PLACE. Annual meetings and special meetings shall be held at such place, within or without the
State of Delaware, as the directors may, from time to time, fix. Whenever the directors shall fail
to fix such place, the meeting shall be held at the registered office of the corporation in the
State of Delaware.
CALL. Annual meetings and special meetings may be called by the directors or by any officer
instructed by the directors to call the meeting.
NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be given, stating the place,
date, and hour of the meeting. The notice of an annual meeting shall state that the meeting is
called for the election of directors and for the transaction of other business which may properly
come before the meeting, and shall (if any other action which could be taken at a special meeting
is to be taken at such annual meeting), state such other action or actions as are known at the time
of such notice. The notice of a special meeting shall in all instances state the purpose or
purposes for which the meeting is called. If any action is proposed to be taken which would, if
taken, entitle stockholders to receive payment for their shares of stock, the notice shall include
a statement of that purpose and to that effect. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally or by mail, not
less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the
prescribed period of time shall have been waived, and directed to each stockholder at his address
as it appears on the records of the corporation. Notice by mail shall be deemed to be given when
deposited, with postage thereon prepaid, in the United States mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if an announcement of
the adjourned time and place is made at the meeting, it shall not be necessary to give notice of
the adjourned meeting unless the directors, after adjournment, fix a new record date for the
adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of
notice by him before or after the time stated therein. Attendance of a person at a meeting of
stockholders shall constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice.
STOCKHOLDER LIST. There shall be prepared and made, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior to the meeting
either at a place within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to who are the stockholders entitled to examine the stock ledger, the list
required by this section or the books of the corporation, or to vote at any meeting of
stockholders.
CONDUCT OF MEETING. Meetings of the stockholders shall be presided over by one of the
following officers in the order of seniority and if present and acting: the Chairman of the Board,
if any, the Vice-Chairman of the Board, if any, the President, a Vice President, a chairman for the
meeting chosen by the Board of Directors, or, if none of the foregoing is in office and present and
acting, by a chairman to be chosen by the stockholders. The Secretary of the corporation, or, in
his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the
Secretary nor an Assistant Secretary is present the Chairman for the meeting shall appoint a
secretary of the meeting.
PROXY REPRESENTATION. Every stockholder may authorize another person or persons to act for
him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving
notice of any meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such proxy provides for a
longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and,
if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable
power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.
INSPECTORS AND JUDGES. The directors, in advance of any meeting, may, but need not, appoint
one or more inspectors of election or judges of the vote, as the case may be, to act at the meeting
or any adjournment thereof. If an inspector or inspectors or judge or judges are not appointed,
the person presiding at the meeting may, but need not, appoint one or more inspectors or judges.
In case any person who may be appointed as an inspector or judge fails to appear or act, the
vacancy may be filled by appointment made by the person presiding thereat. Each inspector or
judge, if any, before entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector or judge at such meeting with strict impartiality and
according to the best of his ability. The inspectors or judges, if any, shall determine the number
of shares of stock outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such
acts as are proper to conduct the election or vote with fairness to all stockholders. On request
of the person presiding at the meeting, the inspector or inspectors or judge or judges, if any,
shall make a report in writing of any challenge, question or matter determined by him or them and
execute a certificate of any fact found by him or them.
QUORUM. Except as the General Corporation Law or these By-Laws may otherwise provide, the
holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum
at a meeting of stockholders for the transaction of any business. The stockholders present may
adjourn the meeting despite the absence of a quorum. When a quorum is once present to organize a
meeting, it is not broken by the subsequent withdrawal of any shareholders.
VOTING. Each stockholder entitled to vote in accordance with the terms of the Certificate of
Incorporation and of these By-Laws, or, with respect to the issuance of Preferred Stock, in
accordance with the terms of a resolution or resolutions of the Board of Directors, shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such
stockholder. In the election of directors, a plurality of the votes present at the meeting shall
elect. Except as otherwise provided in Article VII hereof with respect to amendments to these
By-laws, any other action shall be authorized by a majority of the votes cast except where the
Certificate of Incorporation or the General Corporation Law prescribes a different percentage of
votes and/or a different exercise of voting power. Voting by ballot shall not be required for
corporate action except as otherwise provided by the General Corporation Law.
7. OMITTED.
8. NOTICE OF STOCKHOLDER BUSINESS.
At an annual meeting of the stockholders, only such business shall be conducted as shall have
been brought before the meeting (a) pursuant to the corporations notice of meeting, (b) by or at
the direction of the Board of Directors or (c) by any stockholder of the corporation who is a
stockholder of record at the time of giving of the notice provided for in this By-law, who shall be
entitled to vote at such meeting and who complies with the notice procedures set forth in this
By-law.
For business to be properly brought before an annual meeting by a stockholder pursuant to
clause (c) of paragraph 1 of this By-law, the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation. To be timely, a stockholders notice must be
delivered to or mailed and received at the principal executive offices of the corporation not less
than 60 days nor more than 90 days prior to the first anniversary of the preceding years annual
meeting; provided, however, that in the event that the date of the meeting is changed by more than
30 days from such anniversary date, notice by the stockholder to be timely must be received no
later than the close of business on the 10th day following the earlier of the day on which notice
of the date of the meeting was mailed or public disclosure was made. A stockholders notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting
(a) a brief description of the business desired to brought before the meeting, (b) the name and
address, as they appear on the corporations books, of the stockholder proposing such business, and
the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (c) the
class and number of shares of the corporation which are owned beneficially and of record by such
stockholder of record and by the beneficial owner, if any, on whose behalf the proposal is made and
(d) any material interest of such stockholder of record and the beneficial owner, if any, on whose
behalf the proposal is made in such business.
Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at
an annual meeting except in accordance with the procedures set forth in this By-law. The Chairman
of the meeting shall, if the facts warrant, determine and declare to the meeting that business was
not properly brought before the meeting and in accordance with the procedures prescribed by these
By-laws, and if he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing
provisions of this By-law, a stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect
to the matters set forth in this By-law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION.
The business and affairs of the corporation shall be managed by or under the direction of the
Board of Directors of the corporation. The use of the phrase whole board herein refers to the
total number of directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER.
A director need not be a stockholder, a citizen of the United States, or a resident of the
State of Delaware. The number of directors constituting the entire Board of Directors shall be the
number, not less than one nor more than 15, fixed from time to time by a majority of the total
number of directors which the Corporation would have, prior to any increase or decrease, if there
were no vacancies, provided, however, that no decrease shall shorten the term of an incumbent
director. The number of directors may be increased or decreased by action of the stockholders or
of the directors.
3. ELECTION AND TERM.
The first Board of Directors, unless the members thereof shall have been named in the
Certificate of Incorporation, shall be elected by the incorporator or incorporators and shall hold
office until the first annual meeting of stockholders and until their successors have been elected
and qualified or until their earlier resignation or removal. Any director may resign at any time
upon written notice to the corporation. Thereafter, directors who are elected at an annual meeting
of stockholders, and directors who are elected in the interim to fill vacancies and newly created
directorships, shall hold office until the next annual meeting of stockholders and until their
successors have been elected and qualified or until their earlier resignation or removal. In case
any vacancy shall occur on the Board of Directors because of death, resignation, retirement,
disqualification, removal, an increase in the authorized number of Directors or any other cause,
the Board of Directors shall have the sole and exclusive authority, at any meeting, by
resolution adopted by the affirmative vote of a majority of the Directors then in office, though
less than a quorum, to elect a Director or Directors to fill such vacancy or vacancies until the
next election of Directors.
4. MEETINGS.
TIME. Meetings shall be held at such time as the Board shall fix.
FIRST MEETING. The first meeting of each newly elected Board may be held immediately after
each annual meeting of the stockholders at the same place at which the meeting is held, and no
notice of such meeting shall be necessary to call the meeting, provided a quorum shall be present.
In the event such first meeting is not so held immediately after the annual meeting of the
stockholders, it may be held at such time and place as shall be specified in the notice given as
hereinafter provided for special meetings of the Board of Directors, or at such time and place as
shall be fixed by the consent in writing of all of the directors.
PLACE. Meetings, both regular and special, shall be held at such place within or without the
State of Delaware as shall be fixed by the Board.
CALL. No call shall be required for regular meetings for which the time and place have been
fixed. Special meetings may be called by or at the direction of the Chairman of the Board, if any,
the Vice-Chairman of the Board, if any, or the President, or of a majority of the directors in
office.
NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for regular meetings for
which the time and place have been fixed. Written, oral, or any other mode of notice of the time
and place shall be given for special meetings at least twenty-four hours prior to the meeting. The
notice of any meeting need not specify the purpose of the meeting. Any requirement of furnishing a
notice shall be waived by any director who signs a written waiver of such notice before or after
the time stated therein.
Attendance of a director at a meeting of the Board shall constitute a waiver of notice of such
meeting, except when the director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
QUORUM AND ACTION. A majority of the whole Board shall constitute a quorum except when a
vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall
constitute a quorum, provided that such majority shall constitute at least one-third (1/3) of the
whole Board. Any director may participate in a meeting of the Board by means of a conference
telephone or similar communications equipment by means of which all directors participating in the
meeting can hear each other, and such participation in a meeting of the Board shall constitute
presence in person at such meeting. A majority of the directors present, whether or not a quorum
is present, may adjourn a meeting to another time and place. Except as herein otherwise provided,
and except as otherwise provided by the General Corporation Law, the act of the Board shall be the
act by vote of a majority of the directors present at a meeting, a quorum being present. The
quorum and voting provisions herein stated shall not be construed as conflicting with any
provisions of the General Corporation Law and these By-Laws which govern a meeting of directors
held to fill vacancies and newly created directorships in the Board.
CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present and acting, shall
preside at all meetings. Otherwise, the Vice-Chairman of the Board, if any and if present and
acting, or the President, if present and acting, or any other director chosen by the Board, shall
preside.
5. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause or without cause by the stockholders.
6. COMMITTEES.
The Board of Directors may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of one or more of the directors of the
corporation. The Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the committee. Any such
committee, to the extent provided in the resolution of the Board, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which may require it. In
the absence or disqualification of any member of any such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
7. ACTION IN WRITING.
Any action required or permitted to be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
8. NOMINATION.
Only persons who are nominated in accordance with the procedures set forth in these By-laws
shall be eligible to serve as Directors. Nominations of persons for election to the Board of
Directors of the corporation may be made at a meeting of stockholders (a) by or at the direction of
the Board of Directors or (b) by any stockholder of the corporation who is a stockholder of record
at the time of giving of notice provided for in this By-law, who shall be entitled to vote for the
election of directors at the meeting and who complies with the notice procedures set forth in this
By-law.
Nominations by stockholders shall be made pursuant to timely notice in writing to the
Secretary of the corporation. To be timely, a stockholders notice shall be delivered to or mailed
and received at the principal executive offices of the corporation (a) in the case of an annual
meeting, not less than 60 days nor more than 90 days prior to the first anniversary of the
preceding years annual meeting; provided, however, that in the event that the date of the annual
meeting is changed by more than 30 days from such anniversary date, notice by the stockholder to be
timely must be so received not later than the close of business on the 10th day following the
earlier of the day on which notice of the date of the meeting was mailed or public disclosure was
made, and (b) in the case of a special meeting at which directors are to be elected, not later than
the close of business on the 10th day following the earlier of the day on which notice of the date
of the meeting was mailed or public disclosure was made. Such stockholders notice shall set forth
(a) as to each person whom the stockholder proposes to nominate for election or reelection as a
director all information relating to such person that is required to be disclosed in solicitations
of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (including such persons written consent
to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as
to the stockholder giving the notice (i) the name and address, as they appear on the corporations
books, of such stockholder and (ii) the class and number of shares of the corporation which are
beneficially owned by such stockholder and also which are owned of record by such stockholder; and
(c) as to the beneficial owner, if any, on whose behalf the nomination is made, (i) the name and
address of such person and (ii) the class and number of shares of the corporation which are
beneficially owned by such person. At the request of the Board of Directors, any person nominated
by the Board of Directors for election as a director shall furnish to the Secretary of the
corporation that information required to be set forth in a stockholders notice of nomination which
pertains to the nominee.
No person shall be eligible to serve as a director of the corporation unless nominated in
accordance with the procedures set forth in this By-law. The Chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that a nomination was not made in accordance
with the procedures prescribed by these By-laws, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded. Notwithstanding the
foregoing provisions of this By-law, a stockholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this By-law.
ARTICLE III
OFFICERS
1. EXECUTIVE OFFICERS.
The directors may elect or appoint a Chairman of the Board of Directors, a Chief Executive
Officer, a President, one or more Vice Presidents (one or more of whom may be denominated
Executive Vice President), a Secretary, one or more Assistant Secretaries, a Treasurer, one or
more Assistant Treasurers, and such other officers as they may determine. Any number of offices may
be held by the same person.
2. TERM OF OFFICE: REMOVAL.
Unless otherwise provided in the resolution of election or appointment, each officer shall
hold office until the meeting of the Board of Directors following the next annual meeting of
stockholders and until his successor has been elected and qualified or until his earlier
resignation or removal. The Board of Directors may remove any officer for cause or without cause.
3. AUTHORITY AND DUTIES.
All officers, as between themselves and the corporation, shall have such authority and perform
such duties in the management of the corporation as may be provided in these By-Laws, or, to the
extent not so provided, by the Board of Directors.
4. THE CHAIRMAN OF THE BOARD OF DIRECTORS.
The Chairman of the Board of Directors, if present and acting, shall preside at all meetings
of the Board of Directors, otherwise, the President, if present, shall preside, or if the President
does not so preside, any other director chosen by the Board shall preside.
5. CHIEF EXECUTIVE OFFICER.
The Chief Executive Officer shall, subject to the discretion of the Board of Directors, have
general supervision and control of the Corporations business such duties as may from time to time
be prescribed by the Board of Directors.
6. THE PRESIDENT.
The President shall preside at all meetings of the Stockholders and in the absence of the
Chairman of the Board of Directors, at the meeting of the Board of Directors, shall, subject to the
discretion of the Board of Directors, have general supervision and control of the Corporations
business and shall see that all orders and resolutions of the Board of Directors are carried into
effect.
7. VICE PRESIDENTS.
Any Vice President that may have been appointed, in the absence or disability of the
President, shall perform the duties and exercise the powers of the President, in the order of their
seniority, and shall perform such other duties as the Board of Directors shall prescribe.
8. THE SECRETARY.
The Secretary shall keep in safe custody the seal of the corporation and affix it to any
instrument when authorized by the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors. The Secretary (or in his absence, an Assistant Secretary,
but if neither is present another person selected by the Chairman for the meeting) shall have the
duty to record the proceedings of the meetings of the stockholders and directors in a book to be
kept for that purpose.
9. CHIEF FINANCIAL OFFICER AND TREASURER.
The Chief Financial Officer shall be the Treasurer, unless the Board of Directors shall elect
another officer to be the Treasurer. The Treasurer shall have the care and custody of the
corporate funds, and other valuable effects, including securities, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors. The Treasurer shall disburse the
funds of the corporation as may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the President and directors, at the regular meetings of the
Board, or whenever they may require it, an account of all his transactions as Treasurer and of the
financial condition of the corporation. If required by the Board of Directors, the Treasurer shall
give the corporation a bond for such term, in such sum and with such surety or sureties as shall be
satisfactory to the Board for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever kind in his possession
or under his control belonging to the corporation.
ARTICLE IV
CORPORATE SEAL
AND
CORPORATE BOOKS
The corporate seal shall be in such form as the Board of Directors shall prescribe.
The books of the corporation may be kept within or without the State of Delaware, at such
place or places as the Board of Directors may, from time to time, determine.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to change, by the
Board of Directors.
ARTICLE VI
INDEMNITY
Any person who was or is a party or threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including employee benefit plans)
(hereinafter an indemnitee), shall be indemnified and held harmless by the corporation to the
fullest extent authorized by the General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification than permitted prior thereto), against expenses
(including attorneys fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such indemnitee in connection with such action, suit or proceeding, if the
indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful. The termination of the
proceeding, whether by judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or proceeding, had reasonable
cause to believe such conduct was unlawful.
Any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he or she is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise
(including employee benefit plans) shall be indemnified and held harmless by the corporation to the
fullest extent authorized by the General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification than permitted prior thereto), against expenses
(including attorneys fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the extent that the
Court in which such suit or action was brought, shall determine upon application, that despite the
adjudication of liability but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such Court shall deem proper.
All reasonable expenses incurred by or on behalf of the indemnitee in connection with any
suit, action or proceeding, may be advanced to the indemnitee by the corporation.
The rights to indemnification and to advancement of expenses conferred in this section shall
not be exclusive of any other right which any person may have or hereafter acquire under any
statute, the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
ARTICLE VII
AMENDMENTS
In furtherance and not in limitation of the powers conferred upon it by the laws of the State
of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the
corporations By-laws. The affirmative vote of at least a majority of the entire Board of
Directors shall be required to adopt, amend, alter or repeal the corporations By-laws. The
corporations By-laws also may be adopted, amended, altered or repealed by the affirmative vote of
the holders of at least eighty percent (80%) of the voting power of the shares entitled to vote at
an election of Directors.
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of this 27th day of November, 2007, by and between Health Benefits Direct Corporation, a Delaware corporation (the CORPORATION), and Alvin H. Clemens (the EXECUTIVE). Each of the Corporation and the Executive hereinafter may be referred to individually as a PARTY or collectively as the PARTIES.
WHEREAS, the Parties are parties to that certain Employment Agreement, dated November 18, 2005 (the ORIGINAL AGREEMENT), which sets forth the terms of the Executives employment with the Corporation; and
WHEREAS, the Parties desire to amend and restate the Original Agreement upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, hereby agree and restate the Original Agreement 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 Executive Chairman and/or 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 BOARD). The Executive shall report directly to the Board. 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. Notwithstanding anything else to the contrary contained herein, 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 Sections 9, 10, and 11 below.
3. TERM OF EMPLOYMENT. The term of the Executives employment hereunder, unless sooner terminated as provided herein (the INITIAL TERM), shall be for a period of three years commencing on the date hereof (the COMMENCEMENT DATE). The term of this Agreement shall automatically be extended for successive additional periods 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 60 calendar days prior to the expiration of the Initial Term (a 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. LOCATION OF EMPLOYMENT. The Executive shall perform his duties at the Corporations offices located in Radnor, Pennsylvania (the LOCATION), or at such other locations as are selected for the Corporations facilities that are within 25 miles of the Location; PROVIDED, HOWEVER, that it is understood that in connection with his duties under this Agreement, the Executive shall be required to travel to and to perform services at other locations.
5. COMPENSATION OF EXECUTIVE.
(a) The Corporation shall pay the Executive as compensation for his services hereunder the sum of $450,000 per annum (including future increases in base salary, the BASE SALARY) in accordance with the Corporations normal payroll practices but in no event less frequently than on a monthly basis.
(b) In addition to the Base Salary, 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 may determine from time to time in their sole discretion.
(c) The Corporation shall pay Executive a monthly car allowance as determined by the Chief Executive Officer provided such allowance is consistent with amounts paid to other similarly situated executives of the Corporation and is not less than $1,000 per month.
(d) 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 Corporations policy for reimbursement of expenses from time to time.
(e) The Corporation shall reimburse the Executive for up to $15,000 in dues associated with the Executives membership in professional and business organizations. The Executive must seek approval from the Compensation Committee of the Corporations board of directors with respect to all such organizations for which the Executive seeks payment of dues on the Executives behalf by the Corporation.
(f) 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 (collectively, the BENEFIT PLANS).
6. TERMINATION.
(a) This Agreement and the Executives employment hereunder shall terminate upon the happening of any of the following events:
(i) upon the Executives death;
(ii) upon the Executives Permanent Disability (defined below);
(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 Corporations option, upon 60 calendar days prior written notice to the Executive if without Cause (defined below);
(v) at the Executives option, upon 30 calendar days prior written notice to the Corporation;
(vi) at the Executives option, in the event of an act by the Corporation defined in Section 6(c) below as constituting Good Reason for termination by the Executive; and
(vii) at the Corporations option, in the event of an act by the Executive defined in Section 6(d) below as constituting Cause for termination by the Corporation.
(b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a PERMANENT DISABILITY if the Executive is unable to perform the regular and customary duties of his employment hereunder during any consecutive six month period within the Term by reason of any medically determinable physical or mental impairment.
(c) For purposes of this Agreement, the term GOOD REASON means that the Executive has resigned within one year following the occurrence of one or more of the following events: (i) any substantive reduction of the Executives title, position, duties, responsibilities, or authority without the Executives express consent; (ii) a material breach by the Corporation of any of its obligations to the Executive hereunder; (iii) a reduction in the Executives Base Salary or other benefits described herein; and/or (iv) a relocation of the Corporations office from the Location by more than 25 miles that increases the Executives travel distance from home; and/or (v) within a reasonable time after the Executive becomes aware of any unethical or unlawful business practices or conduct (in which the Executive was not knowing and willing participant) that, in the Executives reasonable discretion, may subject the Executive to liability. The Executive must notify the Corporation of the existence of any such conditions within 90 calendar days of the initial existence of the condition, and must give the Corporation 30 calendar days within which to remedy the condition and thereby avoid a termination for Good Reason.
(d) For purposes of this Agreement, the term CAUSE shall mean any of the following: (i) commission of any act of fraud, embezzlement or dishonesty; (ii) conviction of a felony under the laws of the United States or any state thereof; (iii) failure to follow a lawful, material and reasonable direction of the Corporations board of directors following 30 calendar days notice thereof and chance to cure the same; (iv) any unauthorized use of disclosure of confidential information or trade secrets of the Corporation; or (v) any other intentional misconduct provided that the act in question adversely affects the business of the Corporation in a material manner.
7. EFFECTS OF TERMINATION.
(a) Upon termination of the Executives employment pursuant to Section 6(a)(i) above, the Executives estate or beneficiaries shall be entitled to the following severance benefits: (i) three 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 year following the Executives death of benefits under Benefit Plans extended from time to time by the Corporation to its senior executives.
(b) Upon termination of the Executives employment pursuant to Section 6(a)(ii) above, the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) 18 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 18 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(c) If the Corporation tenders Non-Renewal Notice to the Executive, then the Executive shall be entitled to the following severance benefits: (i) 12 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 12 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(d) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above (other than in connection with a Change of Control (defined below)), the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) continuation of the Executives Base Salary (at the rate in effect immediately before the Executives termination) in accordance with the Corporations normal payroll practices for a period of 18 months less, any applicable income tax withholding required under federal or state law; (ii) continued provision for a period of 18 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, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment.
(e) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above within two months before or 24 months after the occurrence of a Change of Control, the Executive shall be entitled to the following severance benefits: (i) 18 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 18 months after the date of termination of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment; and (iv) all Corporation stock options held by the Executive at the date of termination shall immediately become 100% vested and all restrictions shall lapse thereon.
(f) Upon termination of the Executives employment pursuant to Section 6(a)(v) or Section 6(a)(vii) above, 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 month after the date of the Executives termination of employment, of benefits under Benefit Plans extended to the Executive at the time of termination.
(g) The Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced regardless of whether the Executive obtains other employment.
(h) For purposes of this Agreement, a CHANGE OF CONTROL means the occurrence of one or more of the following events:
(i) Any person, entity, or affiliated group, excluding the Corporation or any employee benefit plan of the Corporation, acquiring more than 50% of the then outstanding voting shares of the Corporation;
(ii) Individuals who as of the date hereof constitute the Board (the INCUMBENT BOARD) cease for any reason to constitute at least two-thirds of the Board; PROVIDED, HOWEVER, that any person becoming a director subsequent to the date hereof, whose election, or nomination for election, by the Corporations stockholders was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board who are then on the Board (either by a specific vote or by approval of the proxy statement of the Corporation in which such person was named as a nominee for director, without objection to such nomination) shall be, for purposes of this subsection, considered as though such person were a member of the Incumbent Board, but excluding for this purpose any individual elected or nominated as a director of the Corporation as a result of any actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board;
(iii) The consummation of a merger, consolidation, share exchange, or similar form of corporate reorganization of the Corporation or any of its subsidiaries that requires the approval of the Corporations stockholders, whether for such transaction or the issuance of securities in connection with such transaction or otherwise (a BUSINESS COMBINATION), unless (A) immediately following such Business Combination: (1) more than 50% of the total voting power of the corporation resulting from such Business Combination (the SURVIVING CORPORATION) or, if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the PARENT CORPORATION), is represented by the Corporations voting securities that were outstanding immediately prior to such Business Combination (or, if applicable, shares into which such voting securities of the Corporation were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such voting securities of the Corporation among the holders thereof immediately prior to the Business Combination, (2) no person (other than any employee benefit plan or employee stock plan sponsored or maintained by the Surviving Corporation or Parent Corporation or any trustee or fiduciary with respect to any such plan) is or becomes the beneficial owner, directly or indirectly, of 33 1/3% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and (3) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), following the Business Combination, were members of the Incumbent Board at the time of the Boards approval of the execution of the initial agreement providing for such Business Combination or (B) the Business Combination is effected by means of the acquisition of voting securities of the Corporation from the Corporation, and prior to such acquisition a majority of the Incumbent Board approves a resolution providing expressly that such Business Combination does not constitute a Change of Control under this subsection; or
(iv) The stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or the sale or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries, other than a sale or disposition of assets to a subsidiary of the Corporation. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires beneficial ownership of more than one-third of the Corporation Voting Securities as a result of the acquisition of Corporation Voting Securities by the Corporation which, by reducing the number of Corporation Voting Securities outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Corporation (if not for the operation of this sentence), and after the Corporations acquisition such person becomes the beneficial owner of additional Corporation Voting Securities that increases the percentage of outstanding Corporation Voting Securities beneficially owned by such person, a Change of Control shall then occur.
(v) If the Executive is a specified employee, as defined in and determined under the Internal Revenue Code section 409A, as of the date of the Executives termination, then any payment to be made or to be provided under this Section 7 may be delayed for six months following the Executives termination to the extent necessary to avoid the application of Internal Revenue Code section 409A(a)(1) to such payments or benefits. Any payments that are delayed as a result hereof will be accumulated and paid in a lump sum to the Executive on the day following the expiration of such six-month period.
8. VACATIONS. In addition to normal Corporation holidays, the Executive shall be entitled to a vacation of four 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 year shall not accrue, provided that if vacation is not taken due to the Corporations business necessities, up to two weeks vacation may carry over to subsequent years.
9. 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 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. Except as otherwise specifically provided for herein, the provisions of this Section 9 shall survive the Executives employment hereunder. All references to the Corporation in Sections 9, 10, and 11 hereof shall include any subsidiary of the Corporation.
10. INVENTION ASSIGNMENT. All inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information that relate to the Corporations actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by the Executive while employed by the Corporation after the date hereof, as well as all inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information which relate to the actual or anticipated business of the Corporation, research and development or existing or future products or services and that were conceived, developed or made by Executive while employed with the Corporation (collectively, WORK PRODUCT) are hereby assigned, and belong, to the Corporation. The Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Term), at the Corporations expense, to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorneys and other instruments).
11. NON-COMPETITION, NON-SOLICITATION, AND NON-DISPARAGEMENT.
(a) During the Term and for a period of 18 months thereafter (the RESTRICTED PERIOD), the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other Person, without the prior written consent of the Corporation (which shall not be unreasonably withheld by the Corporation), engage, directly or indirectly, as an officer, director, stockholder, owner, partner or joint venturer or in any managerial capacity, whether as an employee, independent contractor, consultant or advisor (paid or unpaid), or as a sales representative, or be financially interested, in any business within the United States that sells, markets or provides health or life insurance or related products from multiple insurers to individual consumers.
(b) During the Term and Restricted Period, the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other person, without the prior written consent of the Corporation, directly or indirectly solicit, seek to employ, or seek to retain any person who is at that time, or was during at any time during the Executives employment with the Corporation, an employee (full- or part-time), independent contractor, or outside agent of the Corporation.
(c) Upon a termination of the Executives employment with the Corporation for any reason whatsoever, neither party shall disparage the other Party, or, specifically with respect to the Corporation, its subsidiaries and parents, and their respective officers, directors, investors, employees and agents and its and their respective successors and assigns, heirs, executors, and administrators, including making any statement or comment or engaging in any conduct that is disparaging or derogatory toward the other party, whether directly or indirectly, by name or innuendo, irrespective of the truthfulness or falsity of such statement. The Executive shall be responsible for any breach of this Section 11 by the Executives family members or employees and their respective agents or any of them.
(d) If any of the restrictions contained in this Section 11 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 11 shall then be enforceable in the manner contemplated hereby.
(e) The provisions of this Section 11 shall survive the termination of the Executives employment hereunder and until the end of the Restricted Period.
12. INDEMNIFICATION. The Corporation agrees to indemnify and hold the Executive harmless to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission. In connection therewith, the Executive shall be entitled to the protection of any insurance policies that the Corporation elects to maintain generally for the benefit of the Corporations directors and officers, against all costs, charges, and expenses whatsoever incurred or sustained by the Executive in connection with any action, suit, or proceeding to which he may be made a party by reason of his being or having been a director, officer, or employee of the Corporation. This provision shall survive any termination of the Executives employment hereunder.
13. 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 9, 10, or 11 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 of the Parties may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other Party; 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 Executives employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between the Parties, including the Original Agreement, 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 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 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 States conflicts of laws provisions and each of the Parties 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.
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1
The Parties have executed this Agreement as of the date set forth above.
HEALTH BENEFITS DIRECT CORPORATION
By:
ANTHONY R. VERDI
Name: Anthony R. Verdi
Title: Chief Financial Officer
EXECUTIVE
ALVIN H. CLEMENS
Alvin H. Clemens
2
Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of this 27th day of November, 2007, by and between Health Benefits Direct Corporation, a Delaware corporation (the CORPORATION), and Anthony R. Verdi (the EXECUTIVE). Each of the Corporation and the Executive hereinafter may be referred to individually as a PARTY or collectively as the PARTIES.
WHEREAS, the Parties are parties to that certain Employment Agreement, dated November 10, 2005 (the ORIGINAL AGREEMENT), which sets forth the terms of the Executives employment with the Corporation; and
WHEREAS, the Parties desire to amend and restate the Original Agreement upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, hereby agree and restate the Original Agreement 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 Financial 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 Chief Executive Officer (the CEO) of the Corporation. The Executive shall report directly to the CEO. 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 CEO. Notwithstanding anything else to the contrary contained herein, 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 Sections 9, 10, and 11 below.
3. TERM OF EMPLOYMENT. The term of the Executives employment hereunder, unless sooner terminated as provided herein (the INITIAL TERM), shall be for a period of three years commencing on the date hereof (the COMMENCEMENT DATE). The term of this Agreement shall automatically be extended for successive, additional periods 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 60 calendar days prior to the expiration of the Initial Term (a 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. LOCATION OF EMPLOYMENT. The Executive shall perform his duties at the Corporations offices located in Radnor, Pennsylvania (the LOCATION), or at such other locations as are selected for the Corporations facilities that are within 25 miles of the Location; PROVIDED, HOWEVER, that it is understood that in connection with his duties under this Agreement, the Executive shall be required to travel to and to perform services at other locations.
5. COMPENSATION OF EXECUTIVE.
(a) The Corporation shall pay the Executive as compensation for his services hereunder the sum of $250,000 per annum (including future increases in base salary, the BASE SALARY) in accordance with the Corporations normal payroll practices but in no event less frequently than on a monthly basis.
(b) In addition to the Base Salary, 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 may determine from time to time in their sole discretion.
(c) The Corporation shall pay Executive a monthly car allowance as determined by the Chief Executive Officer provided such allowance is consistent with amounts paid to other similarly situated executives of the Corporation and is not less than $1,000 per month.
(d) 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 Corporations policy for reimbursement of expenses from time to time.
(e) The Corporation shall reimburse the Executive for up to $15,000 in dues associated with the Executives membership in professional and business organizations. The Executive must seek approval from the Compensation Committee of the Corporations board of directors (the BOARD) with respect to all such organizations for which the Executive seeks payment of dues on the Executives behalf by the Corporation.
(f) 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 (collectively, the BENEFIT PLANS).
6. TERMINATION.
(a) This Agreement and the Executives employment hereunder shall terminate upon the happening of any of the following events:
(i) upon the Executives death;
(ii) upon the Executives Permanent Disability (defined below);
(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 Corporations option, upon 60 calendar days prior written notice to the Executive if without Cause (defined below);
(v) at the Executives option, upon 30 calendar days prior written notice to the Corporation;
(vi) at the Executives option, in the event of an act by the Corporation defined in Section 6(c) below as constituting Good Reason for termination by the Executive; and
(vii) at the Corporations option, in the event of an act by the Executive defined in Section 6(d) below as constituting Cause for termination by the Corporation.
(b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a PERMANENT DISABILITY if the Executive is unable to perform the regular and customary duties of his employment hereunder during any consecutive six month period within the Term by reason of any medically determinable physical or mental impairment.
(c) For purposes of this Agreement, the term GOOD REASON means that the Executive has resigned within one year following the occurrence of one or more of the following events: (i) any substantive reduction of the Executives title, position, duties, responsibilities, or authority without the Executives express consent; (ii) a material breach by the Corporation of any of its obligations to the Executive hereunder; (iii) a reduction in the Executives Base Salary or other benefits described herein; and/or (iv) a relocation of the Corporations office from the Location by more than 25 miles that increases the Executives travel distance from home; and/or (v) within a reasonable time after the Executive becomes aware of any unethical or unlawful business practices or conduct (in which the Executive was not knowing and willing participant) that, in the Executives reasonable discretion, may subject the Executive to liability. The Executive must notify the Corporation of the existence of any such conditions within 90 calendar days of the initial existence of the condition, and must give the Corporation 30 calendar days within which to remedy the condition and thereby avoid a termination for Good Reason.
(d) For purposes of this Agreement, the term CAUSE shall mean any of the following: (i) commission of any act of fraud, embezzlement or dishonesty; (ii) conviction of a felony under the laws of the United States or any state thereof; (iii) failure to follow a lawful, material and reasonable direction of the Corporations CEO or board of directors following 30 calendar days notice thereof and chance to cure the same; (iv) any unauthorized use of disclosure of confidential information or trade secrets of the Corporation; or (v) any other intentional misconduct provided that the act in question adversely affects the business of the Corporation in a material manner.
7. EFFECTS OF TERMINATION.
(a) Upon termination of the Executives employment pursuant to Section 6(a)(i) above, the Executives estate or beneficiaries shall be entitled to the following severance benefits: (i) three 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 year following the Executives death of benefits under Benefit Plans extended from time to time by the Corporation to its senior executives.
(b) Upon termination of the Executives employment pursuant to Section 6(a)(ii) above, the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) 18 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 18 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(c) If the Corporation tenders Non-Renewal Notice to the Executive, then the Executive shall be entitled to the following severance benefits: (i) 12 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 12 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(d) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above (other than in connection with a Change of Control (defined below)), the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) continuation of the Executives Base Salary (at the rate in effect immediately before the Executives termination) in accordance with the Corporations normal payroll practices for a period of 18 months less, any applicable income tax withholding required under federal or state law; (ii) continued provision for a period of 18 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, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment.
(e) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above within two months before or 24 months after the occurrence of a Change of Control, the Executive shall be entitled to the following severance benefits: (i) 18 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 18 months after the date of termination of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment; and (iv) all Corporation stock options held by the Executive at the date of termination shall immediately become 100% vested and all restrictions shall lapse thereon.
(f) Upon termination of the Executives employment pursuant to Section 6(a)(v) or Section 6(a)(vii) above, 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 month after the date of the Executives termination of employment, of benefits under Benefit Plans extended to the Executive at the time of termination.
(g) The Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced regardless of whether the Executive obtains other employment.
(h) For purposes of this Agreement, a CHANGE OF CONTROL means the occurrence of one or more of the following events:
(i) Any person, entity, or affiliated group, excluding the Corporation or any employee benefit plan of the Corporation, acquiring more than 50% of the then outstanding voting shares of the Corporation;
(ii) Individuals who as of the date hereof constitute the Board (the INCUMBENT BOARD) cease for any reason to constitute at least two-thirds of the Board; PROVIDED, HOWEVER, that any person becoming a director subsequent to the date hereof, whose election, or nomination for election, by the Corporations stockholders was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board who are then on the Board (either by a specific vote or by approval of the proxy statement of the Corporation in which such person was named as a nominee for director, without objection to such nomination) shall be, for purposes of this subsection, considered as though such person were a member of the Incumbent Board, but excluding for this purpose any individual elected or nominated as a director of the Corporation as a result of any actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board;
(iii) The consummation of a merger, consolidation, share exchange, or similar form of corporate reorganization of the Corporation or any of its subsidiaries that requires the approval of the Corporations stockholders, whether for such transaction or the issuance of securities in connection with such transaction or otherwise (a BUSINESS COMBINATION), unless (A) immediately following such Business Combination: (1) more than 50% of the total voting power of the corporation resulting from such Business Combination (the SURVIVING CORPORATION) or, if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the PARENT CORPORATION), is represented by the Corporations voting securities that were outstanding immediately prior to such Business Combination (or, if applicable, shares into which such voting securities of the Corporation were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such voting securities of the Corporation among the holders thereof immediately prior to the Business Combination, (2) no person (other than any employee benefit plan or employee stock plan sponsored or maintained by the Surviving Corporation or Parent Corporation or any trustee or fiduciary with respect to any such plan) is or becomes the beneficial owner, directly or indirectly, of 33 1/3% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and (3) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), following the Business Combination, were members of the Incumbent Board at the time of the Boards approval of the execution of the initial agreement providing for such Business Combination or (B) the Business Combination is effected by means of the acquisition of voting securities of the Corporation from the Corporation, and prior to such acquisition a majority of the Incumbent Board approves a resolution providing expressly that such Business Combination does not constitute a Change of Control under this subsection; or
(iv) The stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or the sale or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries, other than a sale or disposition of assets to a subsidiary of the Corporation. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires beneficial ownership of more than one-third of the Corporation Voting Securities as a result of the acquisition of Corporation Voting Securities by the Corporation which, by reducing the number of Corporation Voting Securities outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Corporation (if not for the operation of this sentence), and after the Corporations acquisition such person becomes the beneficial owner of additional Corporation Voting Securities that increases the percentage of outstanding Corporation Voting Securities beneficially owned by such person, a Change of Control shall then occur.
(v) If the Executive is a specified employee, as defined in and determined under the Internal Revenue Code section 409A, as of the date of the Executives termination, then any payment to be made or to be provided under this Section 7 may be delayed for six months following the Executives termination to the extent necessary to avoid the application of Internal Revenue Code section 409A(a)(1) to such payments or benefits. Any payments that are delayed as a result hereof will be accumulated and paid in a lump sum to the Executive on the day following the expiration of such six-month period.
8. VACATIONS. In addition to normal Corporation holidays, the Executive shall be entitled to a vacation of four 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 year shall not accrue, provided that if vacation is not taken due to the Corporations business necessities, up to two weeks vacation may carry over to subsequent years.
9. 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 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. Except as otherwise specifically provided for herein, the provisions of this Section 9 shall survive the Executives employment hereunder. All references to the Corporation in Sections 9, 10, and 11 hereof shall include any subsidiary of the Corporation.
10. INVENTION ASSIGNMENT. All inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information that relate to the Corporations actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by the Executive while employed by the Corporation after the date hereof, as well as all inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information which relate to the actual or anticipated business of the Corporation, research and development or existing or future products or services and that were conceived, developed or made by Executive while employed with the Corporation (collectively, WORK PRODUCT) are hereby assigned, and belong, to the Corporation. The Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Term), at the Corporations expense, to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorneys and other instruments).
11. NON-COMPETITION, NON-SOLICITATION, AND NON-DISPARAGEMENT.
(a) During the Term and for a period of 18 months thereafter (RESTRICTED PERIOD), the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other Person, without the prior written consent of the Corporation (which shall not be unreasonably withheld by the Corporation), engage, directly or indirectly, as an officer, director, stockholder, owner, partner or joint venturer or in any managerial capacity, whether as an employee, independent contractor, consultant or advisor (paid or unpaid), or as a sales representative, or be financially interested, in any business within the United States that sells, markets or provides health or life insurance or related products from multiple insurers to individual consumers.
(b) During the Term and Restricted Period, the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other person, without the prior written consent of the Corporation, directly or indirectly solicit, seek to employ, or seek to retain any person who is at that time, or was during at any time during the Executives employment with the Corporation, an employee (full- or part-time), independent contractor, or outside agent of the Corporation.
(c) Upon a termination of the Executives employment with the Corporation for any reason whatsoever, neither Party shall disparage the other Party, or, specifically with respect to the Corporation, its subsidiaries and parents, and their respective officers, directors, investors, employees and agents and its and their respective successors and assigns, heirs, executors, and administrators, including making any statement or comment or engaging in any conduct that is disparaging or derogatory toward the other party, whether directly or indirectly, by name or innuendo, irrespective of the truthfulness or falsity of such statement. The Executive shall be responsible for any breach of this Section 11 by the Executives family members or employees and their respective agents or any of them.
(d) If any of the restrictions contained in this Section 11 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 11 shall then be enforceable in the manner contemplated hereby.
(e) The provisions of this Section 11 shall survive the termination of the Executives employment hereunder and until the end of the Restricted Period.
12. INDEMNIFICATION. The Corporation agrees to indemnify and hold the Executive harmless to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission. In connection therewith, the Executive shall be entitled to the protection of any insurance policies that the Corporation elects to maintain generally for the benefit of the Corporations directors and officers, against all costs, charges, and expenses whatsoever incurred or sustained by the Executive in connection with any action, suit, or proceeding to which he may be made a party by reason of his being or having been a director, officer, or employee of the Corporation. This provision shall survive any termination of the Executives employment hereunder.
13. 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 9, 10, or 11 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 of the Parties may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other Party; 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 Executives employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between the Parties, including the Original Agreement, 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 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 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 States conflicts of laws provisions and each of the Parties 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.
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1
The Parties have executed this Agreement as of the date set forth above.
HEALTH BENEFITS DIRECT CORPORATION
By:
ALVIN H. CLEMENS
Name: Alvin H. Clemens
Title: Chief Executive Officer
EXECUTIVE
ANTHONY R. VERDI
Anthony R. Verdi
2
Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of this 27th day of November, 2007, by and between Health Benefits Direct Corporation, a Delaware corporation (the CORPORATION), and Ivan M. Spinner (the EXECUTIVE). Each of the Corporation and the Executive hereinafter may be referred to individually as a PARTY or collectively as the PARTIES.
WHEREAS, the Parties are parties to that certain Employment Agreement, dated April 3, 2006 (the ORIGINAL AGREEMENT), which sets forth the terms of the Executives employment with the Corporation; and
WHEREAS, the Parties desire to amend and restate the Original Agreement upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Parties, intending to be legally bound, hereby agree and restate the Original Agreement 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 Executive Vice President 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 Chief Executive Officer (the CEO) of the Corporation. The Executive shall report to the CEO. 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 CEO. Notwithstanding anything else to the contrary contained herein, 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 Sections 9, 10, and 11 below.
3. TERM OF EMPLOYMENT. The term of the Executives employment hereunder, unless sooner terminated as provided herein (the INITIAL TERM), shall be for a period of three years commencing on the date hereof (the COMMENCEMENT DATE). The term of this Agreement shall automatically be extended for successive additional periods 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 60 calendar days prior to the expiration of the Initial Term (a 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. LOCATION OF EMPLOYMENT. The Executive shall perform his duties at the Corporations offices located in Deerfield Beach, Florida (the LOCATION), or at such other locations as are selected for the Corporations facilities that are within 25 miles of the Location; PROVIDED, HOWEVER, that it is understood that in connection with his duties under this Agreement, the Executive shall be required to travel to and to perform services at other locations.
5. COMPENSATION OF EXECUTIVE.
(a) The Corporation shall pay the Executive as compensation for his services hereunder the sum of $371,000 per annum until April 2, 2008 and $300,000 per annum thereafter (including future increases in base salary, the BASE SALARY), all in accordance with the Corporations normal payroll practices but in no event less frequently than on a monthly basis.
(b) In addition to the Base Salary, 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 may determine from time to time in their sole discretion.
(c) The Corporation shall pay Executive a monthly car allowance as determined by the Chief Executive Officer provided such allowance is consistent with amounts paid to other similarly situated executives of the Corporation and is not less than $1,000 per month.
(d) 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 Corporations policy for reimbursement of expenses from time to time.
(e) The Corporation shall reimburse the Executive for up to $15,000 in dues associated with the Executives membership in professional and business organizations. The Executive must seek approval from the Compensation Committee of the Corporations board of directors (the BOARD) with respect to all such organizations for which the Executive seeks payment of dues on the Executives behalf by the Corporation
(f) 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 (collectively, the BENEFIT PLANS).
6. TERMINATION.
(a) This Agreement and the Executives employment hereunder shall terminate upon the happening of any of the following events:
(i) upon the Executives death;
(ii) upon the Executives Permanent Disability (defined below);
(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 Corporations option, upon 60 calendar days prior written notice to the Executive if without Cause (defined below);
(v) at the Executives option, upon 30 calendar days prior written notice to the Corporation;
(vi) at the Executives option, in the event of an act by the Corporation defined in Section 6(c) below as constituting Good Reason for termination by the Executive; and
(vii) at the Corporations option, in the event of an act by the Executive defined in Section 6(d) below as constituting Cause for termination by the Corporation.
(b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a PERMANENT DISABILITY if the Executive is unable to perform the regular and customary duties of his employment hereunder during any consecutive six month period within the Term by reason of any medically determinable physical or mental impairment.
(c) For purposes of this Agreement, the term GOOD REASON means that the Executive has resigned within one year following the occurrence of one or more of the following events: (i) any substantive reduction of the Executives title, position, duties, responsibilities, or authority without the Executives express consent; (ii) a material breach by the Corporation of any of its obligations to the Executive hereunder; (iii) a reduction in the Executives Base Salary or other benefits described herein; and/or (iv) a relocation of the Corporations office from the Location by more than 25 miles that increases the Executives travel distance from home; and/or (v) within a reasonable time after the Executive becomes aware of any unethical or unlawful business practices or conduct (in which the Executive was not knowing and willing participant) that, in the Executives reasonable discretion, may subject the Executive to liability. The Executive must notify the Corporation of the existence of any such conditions within 90 calendar days of the initial existence of the condition, and must give the Corporation 30 calendar days within which to remedy the condition and thereby avoid a termination for Good Reason.
(d) For purposes of this Agreement, the term CAUSE shall mean any of the following: (i) commission of any act of fraud, embezzlement or dishonesty; (ii) conviction of a felony under the laws of the United States or any state thereof; (iii) failure to follow a lawful, material and reasonable direction of the Corporations CEO or board of directors following 30 calendar days notice thereof and chance to cure the same; (iv) any unauthorized use of disclosure of confidential information or trade secrets of the Corporation; or (v) any other intentional misconduct provided that the act in question adversely affects the business of the Corporation in a material manner.
7. EFFECTS OF TERMINATION.
(a) Upon termination of the Executives employment pursuant to Section 6(a)(i) above, the Executives estate or beneficiaries shall be entitled to the following severance benefits: (i) three 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 year following the Executives death of benefits under Benefit Plans extended from time to time by the Corporation to its senior executives.
(b) Upon termination of the Executives employment pursuant to Section 6(a)(ii) above, the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) 18 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 18 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(c) If the Corporation tenders Non-Renewal Notice to the Executive, then the Executive shall be entitled to the following severance benefits: (i) 12 months Base Salary at the then current rate, regardless as to the then remaining period of the Term, to be paid from the date of termination until paid in full in accordance with the Corporations usual practices, including the withholding of all applicable taxes; (ii) continued provision during said 12 month period of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; and (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, on a prorated basis of any bonus or other payments earned in connection with the Corporations 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 and paid for by the Corporation for his benefit.
(d) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above (other than in connection with a Change of Control (defined below)), the Executive shall be entitled to the following severance benefits, regardless as to the then remaining period of the Term: (i) continuation of the Executives Base Salary (at the rate in effect immediately before the Executives termination) in accordance with the Corporations normal payroll practices for a period of 18 months less, any applicable income tax withholding required under federal or state law; (ii) continued provision for a period of 18 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, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment.
(e) Upon termination of the Executives employment pursuant to Section 6(a)(iv) or Section 6(a)(vi) above within two months before or 24 months after the occurrence of a Change of Control, the Executive shall be entitled to the following severance benefits: (i) 18 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 18 months after the date of termination of the benefits under Benefit Plans extended from time to time by the Corporation to its senior executives; (iii) payment, within a commercially reasonable time after the termination of the Executives employment with the Corporation, 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 Executives termination of employment; and (iv) all Corporation stock options held by the Executive at the date of termination shall immediately become 100% vested and all restrictions shall lapse thereon.
(f) Upon termination of the Executives employment pursuant to Section 6(a)(v) or Section 6(a)(vii) above, 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 month after the date of the Executives termination of employment, of benefits under Benefit Plans extended to the Executive at the time of termination.
(g) The Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced regardless of whether the Executive obtains other employment.
(h) For purposes of this Agreement, a CHANGE OF CONTROL means the occurrence of one or more of the following events:
(i) Any person, entity, or affiliated group, excluding the Corporation or any employee benefit plan of the Corporation, acquiring more than 50% of the then outstanding voting shares of the Corporation;
(ii) Individuals who as of the date hereof constitute the Board (the INCUMBENT BOARD) cease for any reason to constitute at least two-thirds of the Board; PROVIDED, HOWEVER, that any person becoming a director subsequent to the date hereof, whose election, or nomination for election, by the Corporations stockholders was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board who are then on the Board (either by a specific vote or by approval of the proxy statement of the Corporation in which such person was named as a nominee for director, without objection to such nomination) shall be, for purposes of this subsection, considered as though such person were a member of the Incumbent Board, but excluding for this purpose any individual elected or nominated as a director of the Corporation as a result of any actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board;
(iii) The consummation of a merger, consolidation, share exchange, or similar form of corporate reorganization of the Corporation or any of its subsidiaries that requires the approval of the Corporations stockholders, whether for such transaction or the issuance of securities in connection with such transaction or otherwise (a BUSINESS COMBINATION), unless (A) immediately following such Business Combination: (1) more than 50% of the total voting power of the corporation resulting from such Business Combination (the SURVIVING CORPORATION) or, if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the PARENT CORPORATION), is represented by the Corporations voting securities that were outstanding immediately prior to such Business Combination (or, if applicable, shares into which such voting securities of the Corporation were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such voting securities of the Corporation among the holders thereof immediately prior to the Business Combination, (2) no person (other than any employee benefit plan or employee stock plan sponsored or maintained by the Surviving Corporation or Parent Corporation or any trustee or fiduciary with respect to any such plan) is or becomes the beneficial owner, directly or indirectly, of 33 1/3% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and (3) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), following the Business Combination, were members of the Incumbent Board at the time of the Boards approval of the execution of the initial agreement providing for such Business Combination or (B) the Business Combination is effected by means of the acquisition of voting securities of the Corporation from the Corporation, and prior to such acquisition a majority of the Incumbent Board approves a resolution providing expressly that such Business Combination does not constitute a Change of Control under this subsection; or
(iv) The stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or the sale or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries, other than a sale or disposition of assets to a subsidiary of the Corporation. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any person acquires beneficial ownership of more than one-third of the Corporation Voting Securities as a result of the acquisition of Corporation Voting Securities by the Corporation which, by reducing the number of Corporation Voting Securities outstanding, increases the percentage of shares beneficially owned by such person; provided, that if a Change of Control would occur as a result of such an acquisition by the Corporation (if not for the operation of this sentence), and after the Corporations acquisition such person becomes the beneficial owner of additional Corporation Voting Securities that increases the percentage of outstanding Corporation Voting Securities beneficially owned by such person, a Change of Control shall then occur.
(v) If the Executive is a specified employee, as defined in and determined under the Internal Revenue Code section 409A, as of the date of the Executives termination, then any payment to be made or to be provided under this Section 7 may be delayed for six months following the Executives termination to the extent necessary to avoid the application of Internal Revenue Code section 409A(a)(1) to such payments or benefits. Any payments that are delayed as a result hereof will be accumulated and paid in a lump sum to the Executive on the day following the expiration of such six-month period.
8. VACATIONS. In addition to normal Corporation holidays, the Executive shall be entitled to a vacation of four 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 year shall not accrue, provided that if vacation is not taken due to the Corporations business necessities, up to two weeks vacation may carry over to subsequent years.
9. 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 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. Except as otherwise specifically provided for herein, the provisions of this Section 9 shall survive the Executives employment hereunder. All references to the Corporation in Sections 9, 10, and 11 hereof shall include any subsidiary of the Corporation.
10. INVENTION ASSIGNMENT. All inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information that relate to the Corporations actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by the Executive while employed by the Corporation after the date hereof, as well as all inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information which relate to the actual or anticipated business of the Corporation, research and development or existing or future products or services and that were conceived, developed or made by Executive while employed with the Corporation (collectively, WORK PRODUCT) are hereby assigned, and belong, to the Corporation. The Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Term), at the Corporations expense, to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorneys and other instruments).
11. NON-COMPETITION, NON-SOLICITATION, AND NON-DISPARAGEMENT.
(a) During the Term and for a period of 18 months thereafter (the RESTRICTED PERIOD), the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other Person, without the prior written consent of the Corporation (which shall not be unreasonably withheld by the Corporation), engage, directly or indirectly, as an officer, director, stockholder, owner, partner or joint venturer or in any managerial capacity, whether as an employee, independent contractor, consultant or advisor (paid or unpaid), or as a sales representative, or be financially interested, in any business within the United States that sells, markets or provides health or life insurance or related products from multiple insurers to individual consumers.
(b) During the Term and Restricted Period, the Executive shall not directly or indirectly, for himself or on behalf of or in conjunction with any other person, without the prior written consent of the Corporation, directly or indirectly solicit, seek to employ, or seek to retain any person who is at that time, or was during at any time during the Executives employment with the Corporation, an employee (full- or part-time), independent contractor, or outside agent of the Corporation.
(c) Upon a termination of the Executives employment with the Corporation for any reason whatsoever, neither party shall disparage the other Party, or, specifically with respect to the Corporation, its subsidiaries and parents, and their respective officers, directors, investors, employees and agents and its and their respective successors and assigns, heirs, executors, and administrators, including making any statement or comment or engaging in any conduct that is disparaging or derogatory toward the other party, whether directly or indirectly, by name or innuendo, irrespective of the truthfulness or falsity of such statement. The Executive shall be responsible for any breach of this Section 11 by the Executives family members or employees and their respective agents or any of them.
(d) If any of the restrictions contained in this Section 11 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 11 shall then be enforceable in the manner contemplated hereby.
(e) The provisions of this Section 11 shall survive the termination of the Executives employment hereunder and until the end of the Restricted Period.
12. INDEMNIFICATION. The Corporation agrees to indemnify and hold the Executive harmless to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission. In connection therewith, the Executive shall be entitled to the protection of any insurance policies that the Corporation elects to maintain generally for the benefit of the Corporations directors and officers, against all costs, charges, and expenses whatsoever incurred or sustained by the Executive in connection with any action, suit, or proceeding to which he may be made a party by reason of his being or having been a director, officer, or employee of the Corporation. This provision shall survive any termination of the Executives employment hereunder.
13. 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 9, 10, or 11 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 of the Parties may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other Party; 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 Executives employment by the Corporation, supersedes all prior understandings and agreements, whether oral or written, between the Parties, including the Original Agreement, 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 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 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 States conflicts of laws provisions and each of the Parties 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.
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The Parties have executed this Agreement as of the date set forth above.
HEALTH BENEFITS DIRECT CORPORATION
By:
ALVIN H. CLEMENS
Name: Alvin H. Clemens
Title: Chief Executive Officer
EXECUTIVE
IVAN M. SPINNER
Ivan M. Spinner
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