Nutex Health Inc 8-K, filed Jul 15, 2020
Nutex Health Inc. (NUTX)
About this 8-K
Nutex Health Inc filed this 8-K on July 15, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
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) July 15, 2020 (July 12, 2020)
Clinigence Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-53862 | 11-3363609 |
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
55 Ivan Allen Jr. Blvd. NW, #875 Atlanta, Georgia |
30308 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (678) 607-6393
(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 (see General Instruction A.2. below):
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, $0.001 par value | CLNH | OTCMKTS |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 13, 2020, Clinigence Holdings, Inc. (“Clinigence” or the “Company”) issued a press release announcing the resignation of Jacob Margolin as Chief Executive Officer (“CEO”), and the appointment of Company Chief Medical Officer Lawrence Schimmel, as Interim CEO of the Company. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
Departure of Officer
On July 12, 2020, Jacob Margolin notified the Board of Directors of Clinigence Holdings, Inc. (“Clinigence” or the Company”) of his resignation as Chief Executive Officer (“CEO”) effective July 9, 2020 (“Letter of Resignation”). A copy of the Letter of Resignation is furnished as Exhibit 10.1 hereto and incorporated herein by reference.
In connection with Mr. Margolin’s resignation as CEO, the Company entered into a Confidential Separation Agreement and Mutual Release with Mr. Margolin (the “Separation Agreement”). The Separation Agreement supersedes in its entirety the employment agreement between the Company and Mr. Margolin, which was originally entered into on April 1, 2019. Mr. Margolin will continue as member of the Board of Directors of the Company.
Under the terms of the Separation Agreement, the Company will pay Mr. Margolin (1) a one-time cash payment of twenty thousand dollars ($20,000), payable upon the Separation Date; (2) a cash payment of seventy-two thousand dollars ($72,000), payable in twelve equal monthly payments of $6,000 (the “Monthly Payment”), beginning on August 15, 2020 and (3) two hundred twenty-eight thousand three hundred and forty-six (228,346) shares of the Company’s common stock, which represents an amount equal to $290,000, at the price of $1.27 per share, which is the Fair Market Value of the Company’s stock on the Separation Date (the “Severance Payment”). Stock awards awarded to Mr. Margolin prior to the execution of the Separation Agreement, together with all outstanding equity awards held by Mr. Margolin shall immediately vest effective on the Separation Date. Additionally, pursuant to the Separation Agreement, Mr. Margolin agreed to a release of claims in favor of the Company.
The foregoing is a summary of the material terms of the Separation Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the full text of the Separation Agreement. A copy of the Separation Agreement is furnished as Exhibit 10.2 hereto and incorporated herein by reference.
Appointment of Officer
The Company has appointed Dr. Lawrence Schimmel (age 71), to serve as Interim CEO, effective July 13, 2020. Dr. Schimmel served as the Chief Medical Officer for the Company since March 2019. Dr. Schimmel also served as a member of the Board of the Company from March 2029 until May 2020.
Dr. Schimmel has been an entrepreneur in the medical-related business field throughout most of his career. Dr. Schimmel has also served as Managing Partner of Allied Health Advisors, LLC from 2012 to 2015. In 1992, Dr. Schimmel co-founded Allied Health Group and Florida Specialty Networks, which grew into a national medical management business overseeing the payment of approximately $450 million in healthcare claims annually, and he served as President and Chief Executive Officer of each of these companies from their founding until 1998 when they were sold to Magellan Health Services. In 1984, Dr. Schimmel was the founding Chairman of Megabank and served on its board of directors until 1993. Subsequently, Dr. Schimmel served on the board of directors of Executive National Bank from 1994 until 1997. Most recently, Dr. Schimmel served as the. Chief Medical Officer for QualMetrix from 2013 until March 2019 when it was acquired by Clinigence Health. Dr. Schimmel was also the founding Chairman of Professional Bank and has served as a director of Professional Bank since 2008 and as a director of Professional Bank since its inception in 2014. In addition, Dr. Schimmel practiced general and vascular surgery in the Miami community for 17 years. Dr. Schimmel received his B.A. from Rutgers College and his M.D. from New Jersey College of Medicine.
In connection with Dr. Schimmel’s ’s appointment as CEO, Dr. Schimmel’s existing Employment Agreement entered into with the Company on April 1, 2019 (the “Employment Agreement”), will remain in effect. Pursuant to the Employment Agreement, Dr. Schimmel receives a base salary of One Hundred Eighty Thousand Dollars ($180,000) per year.
The foregoing is a summary of the material terms of the Employment Agreement, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to the full text of the Employment Agreement. A copy of the Employment Agreement is furnished as Exhibit 10.3 hereto and incorporated herein by reference. The material terms of the Employment Agreement are incorporated herein by reference to the Company’s Annual Report on Form10-K for the year ending December 31, 2019.
Additionally, there are no family relationships, as defined in Item 401 of Regulation S-K, between Dr. Schimmel and any of the Company’s executive officers or directors. There is no other arrangement or understanding between Dr. Schimmel and any other person pursuant to which Dr. Schimmel was appointed as Interim CEO of the Company. There are no transactions in which Dr. Schimmel has an interest requiring disclosure under Item 404(a) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Reference is made to the Exhibit Index following the signature page of this Current Report on Form 8-K, which is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Clinigence Holdings, Inc. | ||
| Date: July 15, 2020 | /s/ Elisa Luqman | |
| Elisa Luqman | ||
| Chief Financial Officer |
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EXHIBIT INDEX
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July 12, 2020
Dear Clinigence Holdings, Inc. Board of Directors
As per our agreement today, please accept this letter as formal notification that I am resigning from my position as Chief Executive Officer of Clinigence Holdings, Inc. (the “Company”) effective today.
After more than a decade of taking Clinigence from a sketch of an idea on a pizza box to a public company leading the healthcare market through the turbulent waters of resource and value optimization, it is time for me to start a new chapter.
I am grateful to our Chairman, Dr. Warren Hosseinion for helping us navigate our way to the public markets over the past two years. I have learned a great deal from him and from each and every one of you.
I trust that you, along with my esteemed colleague, co-founder of Qualmetrix, and successor as CEO – Dr. Larry Schimmel - will continue leading Clinigence into more growth and success in the coming years.
You may be losing me as CEO, but I will continue to offer guidance and assistance to you as a member of the board of directors.
Sincerely,
Jacob “Kobi” Margolin
CONFIDENTIAL mutual SEPARATION Agreement and FULL release
This CONFIDENTIAL MUTUAL SEPARATION Agreement and FULL release (the “Agreement”) is made and entered into as of the Separation Date (defined below) between Clinigence Holdings, Inc., a Delaware corporation (the “Employer”) and Jacob Margolin (“Employee” and together with the Employer is referred to as the “Parties”), in exchange for and in consideration of the promises, representations, covenants, and agreements set forth herein.
RECITALS
A. The Parties entered into an employment relationship, which was governed by an Employment Agreement dated March 21, 2019 (the “Employment Agreement”);
B. Employee desires to resign from Employer pursuant to Section 4(e) of the Employment Agreement (the “Resignation”);
C. Employee and Employer mutually desire to terminate amicably Employee's Employment Agreement effective July 12, 2020 (the “Separation Date”);
D. Although Employer is under no pre-existing obligation to pay any sums to Employee as a result of Employee’s resignation, in consideration of Employee’s service to Employer, Employer has agreed to provide Employee with certain benefits as described in this Agreement. The Parties have accordingly voluntarily entered into this Agreement for those benefits.
TERMS AND CONDITIONS
In consideration of the promises and conditions set forth herein, the sufficiency of which is hereby acknowledged, Employer and Employee agree as follows:
1. Separation of Employment. By signing this Agreement, Employee acknowledges that Employee’s employment relationship with Employer ended on the Separation Date and that Employee is not entitled to any further wages, commissions, or benefits from Employer after the Separation Date, except as otherwise provided by this Agreement.
2. Consideration. In consideration for Employee signing this Agreement, and agreeing to the commitments herein, the Employer agrees to pay Employee:
2.1 Severance Payment. Employer agrees to provide Employee (1) a one-time cash payment of twenty thousand dollars ($20,000), payable upon the Separation Date; (2) a cash payment of seventy-two thousand dollars ($72,000), payable in twelve equal monthly payments of $6,000 (the “Monthly Payment”), beginning on August 15, 2020; and (3) two hundred twenty-eight thousand three hundred and forty-six (228,346) shares of the Company’s common stock, which represents an amount equal to $290,000, at the price of $1.27 per share, which is the Fair Market Value of the Company’s stock on the Separation Date (the “Severance Payment”). The shares issue pursuant to the immediately preceding sentence shall not be subject to the Clinigence Holdings, Inc. 2019 Omnibus Equity Incentive Plan (the “Plan”), and such shares have not been registered under the Securities Act of 1933, as amended, and shall bear a legend to that effect. The Severance Payment will be in addition to gross wages of $7,500.00 to be paid to Employee on the Employer’s next regular payday of July 15, 2020. In addition, Employee shall be permitted to submit for reimbursement of unpaid expenses, including without limitation, cell phone and internet service costs, not to exceed a total reimbursement amount of $2,000. Employee shall submit all such reimbursement requests no later than 30 days after the Separation Date.
2.2 Vesting of Equity Awards. Employer agrees that certain stock award as approved by resolution of the Board on June 30, 2020, shall be awarded to Employee effective prior to the execution of this Agreement and that such award, together with all outstanding equity awards held by Employee, shall immediately vest effective on the Separation Date in accordance with Section 3(c) of the Employment Agreement and the Plan such that all securities issued pursuant to such awards shall be fully vested and no longer subject to forfeiture. Employer shall record the accelerated vesting required by this Section 2.2 on its records and take such further actions as necessary and appropriate to give full effect to the transactions contemplated by this Section 2.2.
2.3 So long as Employee properly and timely elects and is eligible for continuing healthcare benefits, Employer shall pay twelve (12) months of Employee’s continuing healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). After that twelve (12) month period, however, Employee will be solely responsible for continuing any such healthcare benefits.
2.3 Sole Financial Obligation. Employee understands and agrees that the monetary Severance Payment set forth in this Section 2 constitutes the Employer’s sole financial obligation to Employee.
2.4 Tax Consequences of the Severance Payment. The monetary severance benefits set forth in Section 2 above will constitute employment-related income and Employer will include the amount on Employee’s IRS Form W-2 for the taxable years 2020 and 2021 in which the Severance Payment is paid. Employee acknowledges and agrees that Employee is solely responsible for any tax liabilities and consequences that may result from Employee’s receipt of the Severance Payment and agrees that Employer shall bear no responsibility for any such liabilities or consequences. Employee further agrees that Employer shall not be required to pay, for any reason, any further sums to Employee, even if the tax liabilities and consequences to Employee are ultimately assessed in a fashion that Employee does not presently anticipate. Further, if any liability for taxes, interest, or penalties is imposed on the Employer because of its failure to comply with any federal, state, or local tax laws with regard to the payment of the severance benefits, Employee will, upon demand by Employer, indemnify and hold Employer harmless from any and all such liability. Employee acknowledges that Employer has not made any representations to Employee concerning the tax consequences of the Severance Payment.
2.5 Neutral Employment Reference. Employer agrees that, in response to any inquiries from potential employers of Employee, Employer will only provide a neutral employment reference for Employee consisting of Employee’s dates of employment and last position held.
3. Release, Covenant Not to Sue, and Waiver.
3.1 In exchange for the good and valuable consideration set forth herein, Employee hereby releases, waives and discharges Employer, its affiliated and related entities, its and their respective predecessors, successors and assigns, its and their respective employee benefit plans and fiduciaries of such plans, and the current and former officers, directors, shareholders, employees, attorneys, accountants and agents of each of the foregoing in their official and personal capacities (hereinafter “Released Parties”), from any and all manner of action, causes of action, claims, charges, suits, damages, attorney’s fees, and any and all other liabilities of whatsoever nature, whether in law or in equity, known or unknown, which Employee has claimed or may claim or could claim against Released Parties in any local, state or federal forum, administrative or judicial, relating to Employee’s employment at and termination of employment with Employer, including but not limited to, any claim or claims for damages alleging wrongful discharge; breach of contract; promissory estoppel; discrimination; retaliation; whistleblower; negligence; breach of privacy;; any and all relief for tort, personal injury, or negligence; claims of discrimination under Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law and any other discrimination law, or under any other local state or federal law, regulation or ordinance; or under any public policy, contract of tort, or under common law; or arising under any policies, practices or procedures of the Employer; or any claim for wrongful discharge, breach of the Employment Agreement, infliction of emotional distress or defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (collectively, the “Claims”). This release covers all possible Claims that are waivable by law, including but not limited to all Claims that could be asserted in contract, in tort, under any state common law, under federal common law, under any state constitution, under the federal Constitution, or under any federal statute, state statute, local ordinance, or under any federal, state, or local regulation.
3.2 Employee fully understands, acknowledges and agrees that the release set forth in Section 3.1 it shall be effective as a bar to each and every one of the Claims, demands and causes of action herein above mentioned or implied. Employee expressly consents that the release set forth in Section 3.1 shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims up to the Separation Date, as well as those relating to any other claims hereinabove mentioned. Employee fully understands, acknowledges and agrees that this waiver is an essential and material term of this Agreement and that without such waiver Employer would not have agreed to the terms of the Agreement. Employee further understands, acknowledges and agrees that in the event Employee should bring a claim seeking damages against Employer, the release set forth in Section 3.1 shall serve as a complete defense to such claims as to my rights and entitlements. Employee further understands, acknowledges and agrees that Employee is not aware of any pending charge or complaint of the type described in Section 3.1 above as of the date of my execution of this Release.
3.3 Notwithstanding anything to the contrary set forth in this Agreement or in any other agreement between the Employee and Employer, nothing in this Agreement or in any other agreement shall limit the Employee’s ability, or otherwise interfere with the Employee’s rights, to (a) file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state, or local governmental agency or commission (each a “Government Agency”), (b) communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Employer, (c) receive an award for information provided to any Government Agency, or (d) engage in activity specifically protected by Section 7 of the National Labor Relations Act, or any other federal or state statute or regulation.
4. Additional Employee Representations.
4.1 Employee represents and agrees that: (a) Employee has not filed any complaints or charges against any of the Released Parties with any federal, state, or local agency or court; (b) Employee has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any right to assert any claim against the Employer or any of the Released Parties which Employer is releasing, acquitting, or discharging through this Agreement; (c) Employee has not suffered any work related injuries during Employee’s employment with the Employer; (d) Employee has been afforded all leave to which Employee may have been entitled to during Employee’s employment with the Employer and is not aware of any facts or circumstances constituting a violation of any federal, state, or local employment leave laws; and (e) Employee is not owed any outstanding wages, bonuses or other compensation from the Employer beyond those earned and due as of Employee’s Separation Date, as set forth above in Section 2.1.
4.2 Employee also acknowledges and agrees that Employee has been fully and properly paid for all hours worked, has received all leave under the Family and Medical Leave Act of 1993, as amended (“FMLA”), to which Employee may have been entitled, is not aware of any facts or circumstances constituting a violation of the FMLA, as amended; of the Fair Labor Standards Act of 1938, as amended; or of any state wage and hour law.
4.3 Employee represents and agrees that, prior to executing this Agreement, Employee has been afforded a reasonable amount of time to review this Agreement, to understand its contents, to knowingly and voluntarily enter into this Agreement and to be bound by its specific, stated obligations and has been, and is being, advised to consult with an attorney prior to executing the agreement.
4.4 Employee agrees the consideration provided by Employer above represents compensation to which Employee would not otherwise be entitled except pursuant to this Agreement, and that by entering into this Agreement, Employee resolves any and all potential claims for back pay, severance pay, front pay, wages, bonuses, damages, whether compensatory, exemplary, punitive or otherwise, benefits, attorneys’ fees, costs, interests, and/or any other monies which the Employee may now or hereafter claim to be entitled to receive from Employer.
4.5 Pursuant to Section 6 of the Employment Agreement, employee agrees to cooperate and return all company property, including but not limited to all electronic equipment, which consists of a laptop issued by Employer to Employee, and access credentials.
5.0 Confidentiality of Agreement. Except as otherwise provided herein, Employee shall keep the terms and facts of this Agreement, Employee’s employment, Employee’s separation from employment completely confidential. Employee acknowledges that Employee has not disclosed, and shall not hereafter disclose, any information concerning this Agreement or the circumstances of Employee’s employment or separation therefrom, to anyone. It is understood that this Agreement shall be subject to exceptions for, Employee revealing the terms of this Agreement to Employee’s attorney, financial advisor, or immediate family on the same conditions of confidentiality, as otherwise required by law or court order, or in order to enforce the terms of this Agreement. Employee understands and agrees not to sell, license or otherwise exploit any products or services which embody or otherwise exploit in whole or in part any Confidential Information (as that term is defined in the Employment Agreement) or materials. Employee acknowledges and agrees that the sale, misappropriation, or unauthorized use or disclosure in writing, orally or by electronic means, at any time of Confidential Information obtained by Employee during or in connection with the course of Employee’s employment constitutes unfair competition. Employee agrees and promises not to engage in unfair competition Employer or its Affiliates, at any time thereafter.
6. No Re-Hire. Employee may not apply for employment with the Employer in the future. If the Employee does, the Employer may use this Agreement to deny or terminate employment for cause.
7. Non-Disparagement. Employee agrees that Employee will not disparage Releasees and will not make any statement to any third party which could reasonably be foreseen to cause harm to the personal or professional reputation of Releasees or its/their employees, board directors or officers. This non-disparagement clause shall not apply to statements made under oath by Employee if compelled to testify pursuant to lawful subpoena or to statements made to enforce the terms of this Agreement. This non-disparagement clause shall in no event be construed to restrict Employee’s exercise of his rights as a Shareholder nor to apply to any statements by Employee made pursuant to his responsibilities as member of the Board of Directors of the Employer.
8. Post-Employment Restrictions. Employee understands that certain post-employment obligations and/or restrictions in the Employment Agreements, including, but not limited to Section 6 governing Confidential Information, Non-solicitation, and Cooperation, and Section 13 governing Notification of New Employer.
9. Successors and Assigns. This Agreement shall be assignable to and shall be binding upon and inure to the benefit of, Employer’s successors and assigns, including, without limitation, successors through merger, name change, consolidation, or sale of a majority of the Employer’s stock or assets, and shall be binding upon the Employee. The Employee shall not have the right to assign his rights or obligations under this Agreement.
10. Severability. The provisions of this Agreement are severable. If any provision of this Agreement is determined to be unenforceable, in whole or in part, then such provision shall be modified so as to be enforceable to the maximum extent permitted by law. If such provision cannot be modified to be enforceable, the provision shall be severed from this Agreement to the extent unenforceable. The remaining provisions and any partially enforceable provisions shall remain in full force and effect.
11. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
12. Notices. Whenever any notice is required hereunder, such notice shall be deemed to have been effectively delivered or given and received on the date personally delivered or on the date sent via email to the respective party to whom it is directed and confirmed by return email within three (3) business days, provided that if confirmation by email is not received within such time, a copy of such notice is also delivered to the person via overnight delivery at the known address of such person or, if not known, then to the corporate headquarters and to the attention of such person.
13. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any previous oral or written communications, negotiations, representations, understandings, or agreements between them. Any modification of this Agreement shall be effective only if set forth in a written document signed by the Employee and a duly authorized officer of the Employer.
14. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Employee and by a duly authorized representative of the Employer.
15. Governing Law/Consent to Jurisdiction and Venue. The laws of the State of Georgia shall govern this Agreement. If Georgia’s conflict of law rules would apply another state’s laws, the Parties agree that Georgia law shall still govern. Any and all claims arising out of or relating to this Agreement shall be brought in a state or federal court of competent jurisdiction in Georgia. The Parties consent to the personal jurisdiction of the state and/or federal courts located in Fulton County, Georgia. The Parties waive (i) any objection to jurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or improper venue, in any action brought in such courts.
16. Obligations of Successors. The Employer shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Employer to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform if no such succession had taken place.
17. Counterparts. This Agreement may be executed in any number of counterparts, including, but not limited to, electronically signed or scanned images, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
_____________________ ______________ Jacob Margolin Date |
CLINIGENCE HOLDINGS, INC.
________________________________ By: Warren Hosseinion, Chairman Date:____________________________ |
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of April 1, 2019, by and between Clinigence Holdings, Inc., a Delaware corporation (the “Company”), and Lawrence Schimmel, M.D., (the “Employee” and together with the Company referred to as the “Parties”) to become effective as of the date hereof (the “Effective Date”). For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Positions and Duties.
(a) Position. The Employee shall initially serve as Chief Medical Officer of the Company. The Company may change the Employee’s position and/or title to those of another senior executive officer as the Company’s needs change.
(b) Duties. The Employee shall perform for the Company the duties that arec ustomarily associated with being a senior executive officer that are consistent with his experience and skills and such other duties as may be assigned to the Employee from time to time by the Company’s Board of Directors (the “Board”) and/or the Company’s Chief Executive Officer (the “CEO”) that are consistent with the duties normally performed by those performing the role of the most senior executives of similar entities.
(c) Reporting. The Employee shall report directly to the CEO.
(d) Devotion of Time. The Employee shall devote such working time, attention,knowledge, skills and efforts as may be required to fulfill the Employee’s duties hereunder and not less than a full-time (40 hours per week) commitment.
(e) Location. The Employee shall be based in South Florida.
(f) Company Policies. The Employee agrees to comply with the policies and procedures of the Company as may be adopted and changed from time to time. If this Agreement conflicts with such policies or procedures, this Agreement shall control.
(g) Fiduciary Duties. The Employee owes a duty of loyalty to the Company, as well as a duty to perform his duties in a manner that is in the best interests of the Company.
2. Term. The term of this Agreement shall be for a three (3) year period commencing on the Effective Date (the “Initial Term”). The term of this Agreement shall automatically renew for an additional year (each, a “Renewal Term”) following the Initial Term and any Renewal Term unless either Party provides written notice to the other Party at least sixty (60) days before the end of the Initial Term or any Renewal Term, as applicable, that it does not desire to renew this Agreement, in which case this Agreement shall expire at the end of the Initial Term or any Renewal Term, as applicable. The Initial Term and any Renewal Term are referred to herein collectively as the “Term”.
3. Compensation and Related Matters. The Company shall provide the Employee with the compensation and benefits set forth in this Section 3 during the Term. Authority to take action under this Section 3 with respect to the Employee’s compensation and benefits may be delegated by the Board to its compensation committee and/or the CEO.
(a) Base Salary. The Company shall pay the Employee for all services rendered a base salary of one hundred eighty thousand Dollars ($180,000) per year (the “Base Salary”), payable in accordance with the Company’s payroll procedures, subject to customary withholdings and employment taxes. The Base Salary shall be evaluated annually by the Board for increase only.
(b) Annual Bonus. The Employee will be eligible to receive an annual cash
bonus (the “Annual Bonus”) for each fiscal year during the Term based on the extent to which, in the discretion of the Board, the Employee achieves or exceed specific and measurable individual and Company performance objectives established by the Board and communicated to the Employee in advance.
(c) Long Term Incentive Awards. The Employee shall be eligible to participate in any long-term incentive plan that may be available to similarly positioned executives. The Board may determine to grant long-term incentive awards in cash or in equity awards settled in shares of the Company’s stock, including but not limited to stock options, restricted stock and performance shares. In the event the Employee terminates service as a Good Leaver, any requirements under a long-term incentive award held by the Employee shall be deemed to have been satisfied by the Company immediately prior to such termination. A “Good Leaver” means that, during the Term, either the Employee has resigned for Good Reason (as defined in Section 4(e) below), the Company has terminated the Employee’s employment without Cause (as defined in Section 4(d) below or the Employee terminates employment on account of death or Disability (as defined in Section 4(b) below). For avoidance of doubt, being a Good Leaver entitles the Employee to be fully vested with respect to any restricted stock, stock options, or other equity rights with vesting conditions based solely on continued employment, and to be entitled to payment with respect to any long-term incentive award subject to corporate or business goals to the extent that such goals are met during the performance period on the same basis as if the Employee had remained continuously employed with the Company.
(d) Paid Time Off. During the term, the Employee shall be entitled to twenty (20) business days of paid time off (“PTO”) per calendar year which shall be accrued ratably during the calendar year, to be taken at such times and intervals as shall be agreed to by Company and the Employee in their reasonable discretion. The Employee shall be entitled to accrue a maximum of twenty (20) business days of paid time off. When the maximum accrual is reached, no additional PTO time will accrue until Employee uses one or more accrued PTO days. Accrued and unused PTO shall be paid in cash at the end of a fiscal year.
Business Expenses. The Employee shall be entitled to prompt reimbursement of reasonable and usual business expenses incurred on behalf of Company in accordance with the Company’s expense reimbursement policy.
(e) Benefit Plans. The Employee shall be entitled to continue to participate in or receive benefits under any employee benefit plan or arrangement which is or may, in the future, be made available by the Company to its employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plan or arrangement.
4. Termination. The Employee’s employment hereunder may be terminated during the Term without any breach of this Agreement under the following circumstances:
(a) Death. The Employee’s employment hereunder shall terminate upon the Employee’s death.
(b) Disability. The Company may terminate the Employee’s employment if the Employee is disabled and, because of the disability, is unable to perform the essential functions of the Employee’s then existing position or positions under this Agreement with or without reasonable accommodation. This provision is not intended to reduce any rights the Employee may have pursuant to any law.
(c) Termination by the Company for Cause. At any time during the Term, the Company may terminate the Employee’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean: (i) conduct by the Employee constituting a material act of willful misconduct in connection with the performance of the Employee’s duties that results in loss, damage or injury that is material to the Company; (ii) the commission by the Employee of (A) any felony or (B) a misdemeanor in which dishonesty or fraud is a material element, (iii) continued, willful and deliberate non-performance by the Employee of the Employee’s duties hereunder (other than by reason of the Employee’s physical or mental illness, incapacity or disability); (iv) a material breach by the Employee of Section 6 of this Agreement that results in loss, damage or injury that is material to the Company; (v) willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the willful inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigations; or (vi) fraud, embezzlement or theft against the Company or any of its Affiliates (as defined in Section 6(a) below). With respect to the events in (i), (iii) and (iv) herein, the Company shall have delivered written notice to the Employee of its intention to terminate the Employee’s employment for Cause, which notice specifies in reasonable detail the circumstances claimed to give rise to the Company’s right to terminate the Employee’s employment for Cause and the Employee shall not have cured such circumstances to the extent such circumstances are reasonably susceptible to cure as determined by the Board in good faith within thirty (30) days following the Company’s delivery of such notice. For avoidance of doubt, “Cause” shall not include (w) below par or below average operational performance, in and of itself; (x) expense reimbursement disputes in which the Employee acts in reasonable good faith; (y) occasional, customary and de minimis use of the Company’s property for personal purposes; and (z) acting in good faith upon advice of Company’s legal counsel.
(d) Termination without Cause. At any time during the Term, the Company may terminate the Employee’s employment hereunder without Cause by providing the Employee with sixty (60) days advance written notice. Any termination by the Company of the Employee’s employment under this Agreement that does not constitute a termination for Cause under Section 4(c) and does not result from the death or Disability of the Employee under Sections 4(a) or 4(b) shall be deemed a termination without Cause under this Section 4(d). Any suspension of the Employee’s employment with pay or benefits pending an investigation of alleged improper activities by the Employee that, if determined to be accurate, would be grounds for a Cause termination, shall not be considered a termination of the Employee’s employment without Cause or provide with Good Reason to terminate employment.
(e) Termination by the Employee. At any time during the Term, the Employee may terminate his employment hereunder for any reason, including, but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Employee has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in the Employee’s responsibilities, authority or duties; (ii) the material breach of this Agreement by the Company, including but not limited to a failure to pay Base Salary or Annual Bonus as provided for under this Agreement; (iii) any relocation of the Employee’s principal place of business to a location more than 30 miles from the Employee’s current office location as specified in Paragraph 1(e); provided, however, that this clause (iii) will not apply to the extent that any new office location is less than 30 miles from the Employee’s residence; or (iv) a change in control of the Company. “Good Reason Process” shall mean (i) the Employee reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Employee notifies the Company in writing of the occurrence of the Good Reason condition within (60) days of the occurrence of such condition; (iii) the Employee cooperates in good faith with the Company’s efforts, for a period of sixty (60) days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Employee terminates his employment within thirty (30) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.
(f) Notice of Termination. Except for termination as specified in Section 4(a), any termination of the Employee’s employment shall be communicated by written Notice of
Termination by the terminating Party to the other Party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.
(g) Date of Termination. “Date of Termination” shall mean the earliest of the following: (i) if the Employee’s employment is terminated by the Employee’s death, the date of the Employee’s death; (ii) if the Employee’s employment is terminated on account of Disability under Section 4(b) or by the Company for Cause under Section 4(c), the date on which Notice of Termination is given that follows any applicable required cure period; (iii) if the Employee’s employment is terminated by the Company under Section 4(d), thirty (30) days after the date on which a Notice of Termination is given; (iv) if the Employee’s employment is terminated by the Employee under Section 4(e) without Good Reason, thirty (30) days after the date of which a Notice of Termination is given or such shorter period agreed to by the Company; or (v) if the Employee’s employment is terminated by the Employee under Section 4(e) with Good Reason, the date on which Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Employee gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination but such acceleration shall nevertheless be deemed a termination by the Employee on the accelerated date for purposes of this Agreement. For purposes of determining the time when the lump sum portion of the Severance Amount, if any, is to be paid under Section 5(b)(i) of this Agreement, “Date of Termination” means the Employee’s separation from service as defined under Section 409A.
5. Compensation upon Termination.
(a) Accrued Benefits. If the Employee’s employment with the Company is terminated for any reason during the Term, or if the Term is not renewed, the Company shall pay or provide the Employee (or the Employee’s authorized representative or estate) any earned but unpaid Base Salary or Annual Bonus for services rendered through the Date of Termination, unpaid expense reimbursements, and accrued but unused paid time off (the “Accrued Benefits”) within thirty (30) days. With respect to vested compensation or benefits the Employee may have under any employee benefit or compensation plan, program or arrangement of the Company, payment will be made to the Employee under the terms of the applicable plan, program or arrangement.
(b) Termination by the Company without Cause or by the Employee with Good Reason. If the Employee’s employment is terminated by the Company without Cause as provided in Section 4(d), or the Employee terminates his employment for Good Reason as provided in Section 4(e), or the Employee terminates employment at the end of the Term after the Company provides notice of intent not to renew pursuant to Section 1 for reasons other than would provide grounds for a Cause termination, then the Company shall, through the Date of Termination, pay the Employee his or her Accrued Benefits. If the Employee signs a general release of claims substantially in the form which is attached as Exhibit A to this Agreement) (the “Release”) within twenty-one (21) days of the receipt of the form of the Release (extended to forty-five (45) days in the event of a group termination or exit incentive program) and does not revoke such Release during the seven-day revocation period:
(i) the Company shall pay the Employee an amount equal to two times the sum of the Employee’s most recent Base Salary and target Annual Bonus (but determined prior to any action involving Base Salary that would constitute Good Reason) (the “Severance Amount”). To the extent that such Severance Amount exceeds the 409A Separation Pay Limit (as defined below), such amount shall be paid in a single lump sum on the regular payroll date of the Company, pertaining to then current salaried employees of the Company, (“payroll date”) next following the first anniversary date of the Employee’s Date of Termination. The portion of the Severance Amount that does not exceed the 409A Separation Pay Limit shall be paid in substantially equal amounts on each payroll date over a one year period; and
(ii) the Company shall pay the Employee an amount in cash equal to the Company’s premium amounts paid for coverage of Employee at the time of the Employee’s termination of coverage under the Company’s group medical, dental and vision programs for a period of twelve (12) months, to be paid directly to the Employee at the same times such payments would be paid on behalf of a current employee for such coverage; provided, however:
(A) No payments shall be made under this paragraph (ii) unless and until the Employee timely elects continued coverage under such plan(s) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”);
(B) This paragraph (ii) shall not be read or construed as placing any restrictions upon amounts paid under this paragraph (ii) as to their use;
(C) Payments under this paragraph (ii) shall cease as of the earliest to occur of the following:
(1) the Employee is no longer eligible for and continuing to receive the COBRA coverage elected in subparagraph (A);
(2) the time period set forth in the first sentence of this paragraph (ii);
(3) the date on which the Employee first becomes eligible to enroll in a group health plan in which eligibility is based on employment with an employer, and
(4) if the Company in good faith determines that payments under this paragraph (ii) would result in a discriminatory health plan pursuant to the Patient Protection and Affordable Care Act of 2010, as amended.
(iii) If the Employee has opted out of the Company’s group medical, dental and vision programs during the coverage year in which termination occurs, the Company shall add to the Severance Amount an amount equal to 12 months of the Company’s monthly amount paid to employees who opt out from such coverage.
(iv) Each individual payment of Severance Amount under Section 5(b)(i), Section 5(b)(ii), and Section 5(b)(iii) of this Agreement, shall be deemed to be a separate “payment” for purposes and within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(iii).
(v) Each individual payment of the Severance Amount under Section 5(b)(i), Section 5(b)(ii), and Section 5(b)(iii) of this Agreement, which are considered “nonqualified deferred compensation” (“NQDC”) under Section 409A shall be made on the date(s) provided herein and no request to accelerate or defer any such payment under this Agreement shall be considered or approved for any reason whatsoever, except as permitted under Section 409A and as the Company allows in its sole discretion. The Company may in its sole discretion accelerate or defer (but not beyond the time limit set forth below) any severance payments which do not constitute NQDC in order to allow for the payment of taxes due, but not beyond the time limit specified for such payment such that the payment would be treated as NQDC. Subject to the requirements of Section 409A, if any severance payment or reimbursement under Section 5(b) of this Agreement is determined in good faith by the Company to constitute NQDC payable to a “specified employee” as defined under Section 409A, then the Company shall make any such payment not earlier than the earlier of: (x) the first payroll date which is six (6) months following the Employee’s separation from service (as defined under Section 409A) with the Company, or (y) the date of Employee’s death.
(vi) for purposes of this Section 5, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
(vii) for purposes of this Section 5, “409A Separation Pay Limit” means two times the lesser of (x) the Employee’s annual compensation during the calendar year preceding the year of the termination of employment; and (y) the adjusted compensation limit under Code Section 401(a)(17) in effect for the year of the termination.
6. Confidential Information, Non-solicitation, and Cooperation.
(a) Definitions.
(i) As used in this Agreement, “Affiliate” means, as to any Person, (i) any other Person which directly, or indirectly through one or more intermediaries, controls such Person or is consolidated with such Person in accordance with GAAP, (ii) any other Person which directly, or indirectly through one or more intermediaries, is controlled by or is under common control with such Person, or (iii) any other Person of which such Person owns, directly or indirectly, fifty percent (50%) or more of the common stock or equivalent equity interests. As used herein, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or otherwise.
(ii) As used in this Agreement, “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization.
(b) Confidential Information. As used in this Agreement, “Confidential Information” means information belonging to the Company or its Affiliates which is of value to the Company or any of its Affiliates in the course of conducting its business (whether having existed, now existing, or to be developed or created during Employee’s employment by Company) and the disclosure of which could result in a competitive or other disadvantage to the Company or its Affiliates. Confidential Information includes, without limitation, contract terms and rates; negotiating and contracting strategies; financial information, reports, and forecasts; inventions, improvements and other intellectual property; product plans or proposed product plans; trade secrets; designs, processes or formulae; software; market or sales information, plans or strategies; employee, customer, patient, provider and supplier information; information from patient medical records; financial data; insurance reimbursement methodologies, strategies and practices; product and service pricing methodologies, strategies and practices; contracts with physicians, providers, provider networks, payors, physician databases and contracts with hospitals; regulatory and clinical manuals; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) that have been discussed or considered by the Company or its Affiliates, including, without limitation, the management of the Company or its Affiliates. Confidential Information includes information developed by the Employee in the course of the Employee’s employment by the Company, as well as other information to which the Employee may have access in connection with the Employee’s employment. Confidential Information also includes the confidential information of others with which the Company or its Affiliates has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless due to breach of the Employee’s duties under Section 6(b), unless otherwise due to Employee’s breach of the obligations in this Agreement, or unless due to violation of another Person’s obligations to the Company or its Affiliates that Employee should have taken reasonable measures to prevent but that Employee did not take.
(c) Confidentiality. The Employee understands and agrees that the Employee’s employment creates a relationship of confidence and trust between the Company and the Employee with respect to all Confidential Information. At all times, both during the Employee’s employment with the Company and after the Employee’s termination from employment for any reason, the Employee shall keep in confidence and trust all such Confidential Information, and shall not use, disclose, or transfer any such Confidential Information without the written consent of the Company, except as may be necessary within the scope of Employee’s duties with Company and in the ordinary course of performing the Employee’s duties to the Company or as otherwise provided in Section 6(d) below. Employee understands and agrees not to sell, license or otherwise exploit any products or services which embody or otherwise exploit in whole or in part any Confidential Information or materials. Employee acknowledges and agrees that the sale, misappropriation, or unauthorized use or disclosure in writing, orally or by electronic means, at any time of Confidential Information obtained by Employee during or in connection with the course of Employee’s employment constitutes unfair competition. Employee agrees and promises not to engage in unfair competition with Company or its Affiliates, either during employment, or at any time thereafter.
(d) Protected Rights. Notwithstanding anything to the contrary in this Section 6, this Agreement is not intended to, and shall not, in any way prohibit, limit or otherwise interfere with the Employee’s protected rights under federal, state or local law to, without notice to the Company, (i) communicate or file a charge with a government regulator; (ii) participate in an investigation or proceeding conducted by a government regulator; or (iii) receive an award paid by a government regulator for providing information.
(e) Documents, Records, etc. All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, that are furnished to the Employee by the Company or its Affiliates or are produced by the Employee in connection with the Employee’s employment will be and remain the sole property of the Company and its Affiliates. The Employee shall return to the Company all such materials and property as and when requested by the Company. In any event, the Employee shall return all such materials and property immediately upon termination of the Employee’s employment for any reason. The Employee shall not retain any such material or property or any copies thereof after such termination. It is specifically agreed that any documents, card files, notebooks, programs, or similar items containing customer or patient information are the property of the Company and its Affiliates regardless of by whom they were compiled.
(f) Disclosure Prevention. The Employee will take all reasonable precautions to prevent the inadvertent or accidental exposure of Confidential Information.
(g) Removal of Material. The Employee will not remove any Confidential Information from the Company’s or its Affiliate’s premises except for use in the Company’s business, and only consistent with the Employee’s duties with the Company.
(h) Copying. The Employee agrees that copying or transferring Confidential Information (by any means) shall be done only as needed in furtherance of and for use in the Company’s and its Affiliate’s business, and consistent with the Employee’s duties with the Company. The Employee further agrees that copies of Confidential Information shall be treated with the same degree of confidentiality as the original information and shall be subject to all restrictions herein.
(i) Computer Security. During the Employee’s employment with the Company, the Employee agrees only to use Company’s and its Affiliate’s computer resources (both on and off the Company’s premises) for which the Employee has been authorized and granted access. The Employee agrees to comply with the Company’s policies and procedures concerning computer security.
(j) E-Mail. The Employee acknowledges that the Company retains the right to review any and all electronic mail communications made with employer provided email accounts, hardware, software, or networks, with or without notice, at any time.
(k) Assignment. The Employee acknowledges that any and all inventions, discoveries, designs, developments, methods, modifications, improvements, trade secrets, processes, software, formulae, data, “know-how,” databases, algorithms, techniques and works of authorship whether or not patentable or protectable by copyright or trade secret, made or conceived, first reduced to practice, or learned by the Employee, either alone or jointly with others, during the Term that (i) relate to or are useful in the business of the Company or its Affiliates, or (ii) are conceived, made or worked on at the expense of or during the Employee’s work time for the Company, or using any resources or materials of the Company or its Affiliates, or (iii) arise out of tasks assigned to the Employee by the Company (together “Proprietary Inventions”) will be the sole property of the Company or its Affiliates. The Employee acknowledges that all work performed by the Employee is on a “work for hire” basis and the Employee hereby assigns or agrees to assign to the Company the Employee’s entire right, title and interest in and to any and all Proprietary Inventions and related intellectual property rights. The Employee agrees to assist the Company to obtain, maintain and enforce intellectual property rights for Proprietary Inventions in any and all countries during the Term, and thereafter for as long as such intellectual property rights exist.
(l) Non-solicitation. Employee agrees and covenants that, at any time during Employee’s employment with the Company and for a period of twelve (12) months immediately following the termination of Employee’s relationship with the Company for any reason, whether with or without cause, Employee shall not, either on Employee’s own behalf or on behalf of any other Person: (i) solicit the services of or entice away, directly or indirectly, any Person employed or engaged by or otherwise providing services to the Company or its Affiliates (this provision does not prohibit the Employee’s post-termination acceptance of unsolicited applications for employment); or (ii) take any illegal action or engage in any unfair business practice, including, without limitation, any misappropriation of confidential, proprietary or trade secret information of the Company or its Affiliates, as a result of which relations between the Company or its Affiliates, and any of their customers, clients, suppliers, distributors or others, may be impaired or which might otherwise be detrimental to the business interests or reputation of the Company or its Affiliates.
(m) Third-Party Agreements and Rights. The Employee hereby confirms that the Employee is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Employee’s use or disclosure of information or the Employee’s engagement in any business except as Employee has previously provided written notice to Company and has attached to this Agreement. The Employee represents to the Company that the Employee’s execution of this Agreement, the Employee’s employment with the Company and the performance of the Employee’s proposed duties for the Company will not violate any obligations the Employee may have to any previous employer or other party. In the Employee’s work for the Company, the Employee will not disclose or use any information in violation of any agreements with or rights of any such previous employer or other party, and the Employee will not bring to (by any means) the premises of the Company any copies or other tangible embodiments of nonpublic information belonging to or obtained from any such previous employment or other party.
(n) Litigation and Regulatory Cooperation. During and after the Employee’s employment, the Employee shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company that relate to events or occurrences that transpired while the Employee was employed by the Company. The Employee’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Employee’s employment, the Employee also shall cooperate fully with the Company in connection with any investigation or review of any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Employee was employed by the Company. The Company shall reimburse the Employee for any reasonable out of pocket expenses incurred in connection with the Employee’s performance of obligations pursuant to this Section. “Full cooperation” shall not be construed to in any way require any violation of law or any testimony that is false or misleading.
(o) Enforcement; Injunction. The Employee acknowledges and agrees that the restrictions contained in this Agreement are reasonable and necessary to protect the business and interests of the Company and its Affiliates, do not create any undue hardship for the Employee, and that any violation of the restrictions in this Agreement would cause the Company and its Affiliates substantial irreparable injury. Accordingly, the Employee agrees that a remedy at law for any breach or threatened breach of the covenants or other obligations in Section 6 of this Agreement would be inadequate and that the Company, in addition to any other remedies available, shall be entitled to obtain preliminary and permanent injunctive relief to secure specific performance of such covenants and to prevent a breach or contemplated or threatened breach of this Agreement without the necessity of proving actual damage and without the necessity of posting bond or security, which the Employee expressly waives. Moreover, the Employee will provide the Company a full accounting of all proceeds and profits received by the Employee as a result of or in connection with a breach of Section 6 of this Agreement. Unless prohibited by law, the Company shall have the right to retain any amounts otherwise payable by the Company to the Employee to satisfy any of the Employee’s obligations as a result of any breach of Section 6 of this Agreement. The Employee hereby agrees to indemnify and hold harmless the Company and its Affiliates from and against any damages incurred by the Company or its Affiliates as assessed by a court of competent jurisdiction as a result of any breach of Section 6 of this Agreement by the Employee. The prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs if it prevails in any action to enforce Section 6 of this Agreement. It is the express intention of the parties that the obligations of Section 6 of this Agreement shall survive the termination of the Employee’s employment. The Employee agrees that each obligation specified in Section 6 of this Agreement is a separate and independent covenant that shall survive any termination of this Agreement and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in Section 6 of this Agreement. No change in the Employee’s duties or compensation shall be construed to affect, alter or otherwise release the Employee from the covenants herein.
7. Successors and Assigns. This Agreement shall be assignable to and shall be binding upon and inure to the benefit of, the Company’s successors and assigns, including, without limitation, successors through merger, name change, consolidation, or sale of a majority of the Company’s stock or assets, and shall be binding upon the Employee. The Empoyee shall not have the right to assign his rights or obligations under this Agreement.
8. Severability. The provisions of this Agreement are severable. If any provision of this Agreement is determined to be unenforceable, in whole or in part, then such provision shall be modified so as to be enforceable to the maximum extent permitted by law. If such provision cannot be modified to be enforceable, the provision shall be severed from this Agreement to the extent unenforceable. The remaining provisions and any partially enforceable provisions shall remain in full force and effect.
9. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
10. Notices. Whenever any notice is required hereunder, such notice shall be deemed to have been effectively delivered or given and received on the date personally delivered or on the date sent via email to the respective party to whom it is directed and confirmed by return email within three (3) business days, provided that if confirmation by email is not received within such time, a copy of such notice is also delivered to the person via overnight delivery at the known address of such person or, if not known, then to the corporate headquarters and to the attention of such person.
11. Publicity. The Employee hereby grants to the Company the right to use the Employee’s name and likeness, without additional consideration, on, in and in connection with technical, marketing and/or disclosure materials published by or for the Company for the duration of Employee’s employment with Company.
12. Conflicting Obligations and Rights. The Employee agrees to inform the Company of any apparent conflicts between the Employee’s work for the Company and (a) any obligations the Employee may have to preserve the confidentiality of another’s proprietary information or materials or (b) any rights the Employee claims to any inventions or ideas before using the same on the Company’s behalf. Otherwise, the Company may conclude that no such conflict exists and the Employee agrees thereafter to make no such claim against the Company. The Company shall receive such disclosures in confidence and consistent with the objectives of avoiding any conflict of obligations and rights or the appearance of any conflict of interest.
13. Notification of New Employer. In the event that the Employee leaves the employ of the Company, voluntarily or involuntarily, the Employee agrees to inform any subsequent employer of the Employee’s obligations under Section 6 of this Agreement. The Employee further hereby authorizes the Company to notify the Employee’s new employer about the Employee’s obligations under Section 6 of this Agreement.
14. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous oral or written communications, negotiations, representations, understandings, or agreements between them. Any modification of this Agreement shall be effective only if set forth in a written document signed by the Employee and a duly authorized officer of the Company.
15. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Employee and by a duly authorized representative of the Company.
16. Non-Interference. Notwithstanding anything to the contrary set forth in this Agreement or in any other agreement between the Employee and the Company, nothing in this Agreement or in any other agreement shall limit the Employee’s ability, or otherwise interfere with the Employee’s rights, to (a) file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state, or local governmental agency or commission (each a “Government Agency”), (b) communicate with any Government Agency or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company, (c) receive an award for information provided to any Government Agency, or (d) engage in activity specifically protected by Section 7 of the National Labor Relations Act, or any other federal or state statute or regulation.
17. Governing Law/Consent to Jurisdiction and Venue. The laws of the State of Florida shall govern this Agreement. If Florida’s conflict of law rules would apply another state’s laws, the Parties agree that Florida law shall still govern. Any and all claims arising out of or relating to this Agreement shall be brought in a state or federal court of competent jurisdiction in Florida. The Parties consent to the personal jurisdiction of the state and/or federal courts located in Miami Dade County, Florida. The Parties waive (i) any objection to jurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or improper venue, in any action brought in such courts.
18. Obligations of Successors. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
19. Limitation on Payments in Certain Events.
(a) Limitation on Payments. Notwithstanding anything to the contrary in Section 3 and Section 5 of this Agreement, if any payment or distribution that the Employee would receive pursuant to this Agreement or otherwise (“Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code), and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Payment are paid to the Employee, which of the following alternative forms of payment would maximize the Employee’s after-tax proceeds: (i) payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment so that the Employee receives that largest Payment possible without being subject to the Excise Tax (a “Reduced Payment”), whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax (all computed at the highest marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in the Employee’s receipt, on an after-tax basis, of the greater amount of the Payment, notwithstanding that all or some portion the Payment may be subject to the Excise Tax.
(b) The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the date the first Payment is due shall make all determinations required to be made under this Section 18. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, group or entity effecting the transaction, the Company shall appoint a nationally recognized independent registered public accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder.
(c) The independent registered public accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and the Employee at such time as requested by the Company or the Employee. If the independent registered public accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Payment, it shall furnish the Company and the Employee with an opinion reasonably acceptable to the Employee that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Parties.
20. Counterparts. This Agreement may be executed in any number of counterparts, including, but not limited to, electronically signed or scanned images, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.
[Signature Page Follows]
| 1 |
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company by its duly authorized officer, and by the Employee, as of the date first above written.
| COMPANY: | ||
| CLINIGENCE HOLDINGS, INC.: | ||
| By: /s/ Jacob Margolin | ||
| Printed Name: Jacob Margolin | ||
| Its: CEO | ||
| Date: April 01, 2019 | ||
| EMPLOYEE: | ||
| By: /s/ Lawrence Schimmel | ||
| Printed Name: Lawrence Schimmel | ||
| Date: April 01, 2019 | ||
| 2 |
EXHIBIT A
Release of Claims
I, _________________, in consideration of and subject to the performance by
CLINIGENCE HOLDINGS, INC., a Delaware corporation (the “Company”) of its obligations under the Employment Agreement, dated as of ___________ _, 20__ (as amended from time to time, the “Agreement”), do hereby release and forever discharge as of the date of my execution of this release (this “Release”) the Company, its affiliated and related entities, its and their respective predecessors, successors and assigns, its and their respective employee benefit plans and fiduciaries of such plans, and the current and former officers, directors, shareholders, employees, attorneys, accountants and agents of each of the foregoing in their official and personal capacities (collectively, the “Released Parties”) to the extent provided below.
| 1. | I understand that any payments or benefits paid or granted to me under Section 5(b) of the Agreement represent, in part, consideration for signing this Release and are not salary, wages or benefits to which I was already entitled. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates. |
| 2. | Releases. |
I knowingly and voluntarily (on behalf of myself, my spouse, my heirs, executors, administrators, agents and assigns, past and present) fully and forever release and discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross claims, counterclaims, demands, debts, liens, contracts, covenants, suits, rights, obligations, expenses, judgments, compensatory damages, liquid damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, orders and liabilities of whatever kind of nature, in law and in equity, in contract of in tort, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, vested or contingent, suspected, or claimed, against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or relate to my employment with, or my separation or termination from, the Company up to the date of my execution of this Release (including, but not limited to, any allegation, claim of violation arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act), the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local state or federal law, regulation or ordinance; or under any public policy, contract of tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of the Agreement, infliction of emotional distress or defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (collectively, the “Claims”). Employee agrees that this Agreement is intended to include all claims, if any, that Employee may have against the Company, and that this Agreement extinguishes those claims.
| 3. | I represent that I have made no assignment of transfer of any right, claim, demand, cause of action, or other matter covered by Section 2 above. |
| 4. | In signing this Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the claims, demands and causes of action herein above mentioned or implied. I expressly consent that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims up to the date of my execution of this Release, if any, as well as those relating to any other claims hereinabove mentioned. I acknowledge and agree that this waiver is an essential and material term of this Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a claim seeking damages against the Company, this Release shall serve as a complete defense to such claims as to my rights and entitlements. I further agree that I am not aware of any pending charge or complaint of the type described in Section 2 above as of the date of my execution of this Release. |
| 5. | I agree that neither this Release, nor the furnishing of the consideration for this Release, shall be deemed or constructed at any time to be an admission or acknowledgement by the Company, any Released Party or myself of any improper or unlawful conduct. |
| 6. | I agree and acknowledge that the provisions, conditions, and negotiations of this Release are confidential and agree not to disclose any information regarding the terms, conditions and negotiations of this Release, nor transfer any copy of this Release to any person or entity, other than my immediate family and any tax, legal or other counsel or advisor I have consulted regarding the meaning or effect hereof or as required by applicable law, and I will instruct each of the foregoing not to disclose the same to anyone. |
| 7. | Notwithstanding anything in the Release to the contrary, nothing in this Release shall be deemed to affect, impair, relinquish, diminish, or in any way affect any rights or claims in any respect to (i) any vested rights or other entitlements that I may have as of the date of my execution of this Release under the Company’s 401(k) plan; (ii) any other vested rights or other entitlements that I may have as of the date of my execution of this Release under any employee benefit plan or program, in which I participated in my capacity as an employee of the Company; (iii) my rights under the Agreement; or (iv) my rights under the Release. |
| 8. | I understand that I continue to be bound by Section 6 of the Agreement. |
| 9. | Whenever possible, each provision of this Release shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provisions of this Release are held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein. |
| 10. | This Release shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to the conflict of laws principles of the State of Florida. |
BY SIGNING THIS RELEASE, I REPRESENT AND AGREE THAT:
| (i) | I HAVE READ IT CAREFULLY; |
| (ii) | I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; |
| (iii) | I VOLUNTARILY CONSENT TO EVERYTHING IN IT; |
| (iv) | THE COMPANY IS HEREBY ADVISING ME TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT, I HAVE HAD THE OPPORTUNITY TO SO CONSULT, AND HAVE AVAILED MYSELF OF SUCH ADVICE TO THE EXTENT I HAVE DEEMED NECESSARY TO MAKE A VOLUNTARY AND INFORMED CHOICE TO EXECUTE THIS RELEASE; |
| (v) | I HAVE HAD AT LEAST TWENTY ONE (21) DAYS [45 DAYS IN |
CONNECTION WITH A GROUP TERMINATION OR EXIT INCENTIVE PLAN] FOLLOWING THE DATE OF TERMINATION OF MY EMPLOYMENT TO CONSIDER THIS RELEASE;
| (vi) | CHANGES TO THIS RELEASE, WHETHER MATERIAL OR IMMATERIAL, DO NOT RESTART THE RUNNING OF THE 21-DAY [OR 45 DAY] CONSIDERATION PERIOD; |
| (vii) | I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT, SUCH REVOCATION TO BE RECEIVED IN WRITING BY THE COMPANY BY THE END OF THE SEVENTH DAY AFTER THE DATE HEREOF, AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; |
| (viii) | I HAVE SIGNED THIS RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND |
| (ix) | I AGREE THAT THE PROVISIONS OF THIS RELEASE MAY NOT BE AMENDED, WAIVED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME. |
DATED AS OF ________, 20__
___________________________________________ [Name]
| 3 |
clinigence holdings provides strategic update
ATLANTA, GA − (BUSINESSWIRE) – July 15, 2020 – Clinigence Holdings, Inc. (“Clinigence” or the “Company”) (OTC: CLNH), a pioneer in clinical data integration, clinical quality reporting and population health analytics, today is providing an update to its shareholders.
As previously announced on June 3, 2020, Clinigence sold certain of its intellectual property assets and patents, as well as liabilities of approximately $3.2 million, to Accountable Healthcare America, Inc. (“AHA”) for an aggregate purchase price of $15 million of Preferred Stock of AHA. Please refer to our press release put out on June 3, 2020 for more information.
To further enhance shareholder value, the Board of Directors of Clinigence Holdings is announcing an operating restructuring plan and is also exploring strategic alternatives for our fully-reporting operating public entity, including the potential sale or merger of the Company.
As part of this restructuring plan, Jacob “Kobi” Margolin has announced his resignation as Chief Executive Officer of the Company. He will continue to serve as a director on the Board of the Company. Lawrence Schimmel, M.D., Co-Founder of the Company and current Chief Medical Officer, has been named Interim Chief Executive Officer of Clinigence Holdings.
There can be no assurance of a successful outcome from these efforts, or of the form or timing of such outcome.
“On behalf of the Board, we thank Kobi for his service during his tenure as CEO. We are fortunate that Dr. Schimmel has agreed to assume the Interim CEO role during this transition period,” stated Warren Hosseinion, M.D., Chairman of the Board of Clinigence.
“I am proud of what we have accomplished so far. It has been a privilege leading an incredible team of talented people dedicated to making healthcare better through innovative technology. I look forward to continuing to help the Company build shareholder value as a Board director,” stated Jacob “Kobi” Margolin, Co-Founder of Clinigence.
About Clinigence Holdings, Inc.
Clinigence Holdings, a fully reporting, publicly-held company, is a leading healthcare information technology company providing an advanced, cloud-based platform that enables healthcare organizations to provide value-based care and population health management. The Clinigence platform aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of each patient and provider and virtually unlimited insights into patient populations. For more information, please visit www.clinigencehealth.com. Information on our website does not comprise a part of this press release.
Safe Harbor:
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Act of 1995. When used in this press release, the words or phrases "will likely result," "expect to," "will continue," "anticipated," "estimate," "projected," "intend," “goal,” or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, including but not limited to, challenges involved in AHA reaching satisfactory business combination agreements with the SPAC and various roll-up target acquisitions, AHA being able to satisfy all of the anticipated conditions to closing with the SPAC including obtaining consolidated audited financial statements, if the SPAC transaction with AHA does not proceed being able to enter into and close the merger transaction with AHA, economic conditions, dependence on management, dilution to shareholders, lack of capital, changes in laws or regulations, the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth, demand for products and services of the Company, newly developing technologies, its ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition, the inability of the Company to obtain or maintain the listing of the post-acquisition company’s ordinary shares on Nasdaq following the Merger, and the ability of the Company and AHA to obtain additional financing which is expected to be needed prior to closing of any SPAC transaction. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release.
FOR ADDITIONAL INFORMATION:
Clinigence Holdings, Inc.
Warren Hosseinion, M.D.
Chairman of the Board
Via email at warren.hosseinion@clinigencehealth.com