Delaware
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0-24975 |
94-3236644 |
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(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. | Entry into a Material Definitive Agreement |
New Employment Agreement with Wayne Gattinella |
| Mr. Gattinella receives an annual base salary of $560,000 and will be eligible to earn a bonus of up to 100% of his base salary. Achievement of 50% of that bonus will be based upon the attainment of annual financial goals, and achievement of the remaining 50% will be based upon other annual performance goals. | |
| In the event an initial public offering of WebMD Health equity is consummated, WebMD Health would recommend to its Compensation Committee that, upon consummation, Mr. Gattinella be granted 100,000 shares of restricted WebMD Health common stock and options to purchase 400,000 shares of WebMD Health common stock, such numbers to be adjusted, up or down, to the extent the capitalization of WebMD Health is more or less than 100,000,000 shares. The per share exercise price of the options would be the fair market value of the common stock on the IPO date, as determined by the Compensation Committee. The WebMD Health restricted stock and options would vest in equal installments over four years upon each anniversary of the grant date. | |
| In the event of a change of control of WebMD Health (as defined in the employment agreement), the unvested portion of the WebMD Health options would continue to vest until the later of (i) two years from the date of grant and (ii) the next scheduled vesting date following the change of control. The continued vesting would apply only if Mr. Gattinella remains employed until six months following such change of control or is terminated by WebMD Healths successor without cause or he resigns for good reason during such six-month period. | |
| In the event of the termination of Mr. Gattinellas employment, prior to April 30, 2009, by WebMD, Inc. without cause or by Mr. Gattinella for good reason (as those terms are defined in the employment agreement) he would be entitled to continue to receive his base salary for one year from the date of termination and to receive healthcare coverage until the earlier of one year following his termination and the date upon which he receives comparable coverage under another plan. In addition, the unvested portion of the options to purchase 600,000 shares of WebMD Corporation common stock granted to Mr. Gattinella at the inception of his employment would remain outstanding and continue to vest as if he remained in the employ of WebMD, Inc. until the first anniversary of the date of termination. In the event that a termination of Mr. Gattinellas employment by WebMD, Inc. without cause or by Mr. Gattinella for good reason occurs before the fourth anniversary of the grant of the WebMD Health option described above, 25% of the WebMD Health options would continue to vest through the next vesting date following the date of termination. |
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Employment Agreement with David Gang |
| Mr. Gang will receive an annual base salary of $560,000 and will be eligible to earn a bonus of up to 100% of his base salary. Achievement of 50% of that bonus will be based upon the attainment of annual financial goals, and achievement of the remaining 50% will be based upon other annual performance goals. | |
| As an inducement to enter into the employ of WebMD, Mr. Gang will receive a one-time bonus payment of $500,000. In addition, he will be entitled to a reimbursement of relocation expenses. | |
| Mr. Gang will be granted, on the first day of his employment, options to purchase 400,000 shares of WebMD Corporation common stock. The exercise price will be the closing price of the common stock of WebMD Corporation on such date. The options will vest in equal annual installments over four years upon each anniversary of the grant date. In the event WebMD, Inc. is no longer a subsidiary of WebMD Corporation, the unvested portion of the options would terminate while the vested portion would remain outstanding in accordance with its terms. If such an event occurs within the first twelve months from the grant date, the unvested portion would continue to vest through the first scheduled vesting date. | |
| Mr. Gang will also receive 100,000 shares of restricted common stock of WebMD Corporation on the first day of his employment. The restricted stock will vest in equal annual installments over four years upon each anniversary of the grant date. In the event WebMD, Inc. is no longer a subsidiary of WebMD Corporation, the restricted stock not yet vested at that time would be forfeited. | |
| In the event an initial public offering of WebMD Health equity is consummated, WebMD Health would recommend to its Compensation Committee that, upon consummation, Mr. Gang be granted 100,000 shares of restricted WebMD Health common stock and options to purchase 400,000 shares of WebMD Health common stock, such numbers to be adjusted, up or down, to the extent the capitalization of WebMD Health is more or less than 100,000,000 shares. The per share exercise price of the options would be the fair market value of the common stock on the IPO date, as determined by the Compensation Committee. The WebMD Health restricted stock and options would vest in equal installments over four years upon each anniversary of the grant date. | |
| In the event of a change of control of WebMD Health (as defined in Mr. Gangs employment agreement), the unvested portion of the WebMD Health options would continue to vest until the later of (i) two years from the date of grant and (ii) the next scheduled vesting date following the change of control. The continued vesting would apply only if Mr. Gang remains employed until six months following such change of control or is terminated by WebMD Healths successor without cause or he resigns for good reason during such six-month period. | |
| In the event of the termination of Mr. Gangs employment, prior to the fourth anniversary of the start date, by WebMD, Inc. without cause or by Mr. Gang for good reason (as those terms are defined in Mr. Gangs employment agreement) he would be entitled to continue to receive his base salary for one year from the date of termination and to receive health coverage until the earlier of one year following his termination and the date upon which he receives comparable coverage under another plan. In the event that a termination of Mr. Gangs employment by WebMD, Inc. without cause or by Mr. Gang for good reason occurs before the fourth anniversary of the first date of Mr. Gangs employment, 25% of the options to purchase WebMD Corporation common stock described above and 25% of the options to purchase WebMD Health common stock described above would continue to vest through the next vesting date following the date of termination. |
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| Mr. Holstein will continue to receive his annual base salary of $660,000 until October 27, 2007, provided that the base salary for the first six months will be paid to Mr. Holstein in a lump sum at the end of such six-month period in accordance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, except to the extent any future guidance issued by the Internal Revenue Service under Section 409A does not subject such payments to Section 409A. | |
| Mr. Holstein will generally continue to participate in our welfare benefit plans until the earlier of October 27, 2007 and the date upon which he receives comparable coverage under another plan. | |
| The options to purchase WebMD Corporation common stock granted to Mr. Holstein will remain outstanding and continue to vest, and will otherwise be treated as if Mr. Holstein remained employed by WebMD, through April 27, 2007. |
Item 1.02. | Termination of a Material Definitive Agreement |
| the prior employment agreement itself, a copy of which was filed as Exhibit 10.46 to our Annual Report on Form 10-K for the year ended December 31, 2003; | |
| the description of the prior employment agreement under the heading Executive Compensation Compensation Arrangements with Executive Officers Arrangements with Wayne T. Gattinella in the Proxy Statement, dated as of August 13, 2004, for our 2004 Annual Meeting of Stockholders. |
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| the employment agreement itself, a copy of which was filed as Exhibit 10.14 to our Annual Report on Form 10-K for the year ended December 31, 2002; | |
| the descriptions of employment arrangements with Mr. Holstein (a) in the Proxy Statement, dated as of August 13, 2004, for our 2004 Annual Meeting of Stockholders under the heading Executive Compensation Compensation Arrangements with Executive Officers Arrangements with Roger C. Holstein and (b) in our Current Report on Form 8-K dated September 23, 2004 under the heading Appointment of Roger C. Holstein as Chief Executive Officer of WebMD Health, Our Portal Services Segment. |
Item 5.02. | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers |
Item 9.01. | Financial Statements and Exhibits |
99.1 Employment Agreement, dated as of April 28, 2005, between WebMD, Inc. and Wayne T. Gattinella | |
99.2 Employment Agreement, dated as of April 28, 2005, between WebMD, Inc. and David Gang | |
99.3 Letter Agreement, dated as of April 27, 2005, between WebMD Corporation and Roger C. Holstein |
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WEBMD CORPORATION |
By: | /s/ Lewis H. Leicher |
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Lewis H. Leicher | ||
Senior Vice President |
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Exhibit | ||||
Number | Description | |||
99.1 | Employment Agreement, dated as of April 28, 2005, between WebMD, Inc. and Wayne T. Gattinella | |||
99.2 | Employment Agreement, dated as of April 28, 2005, between WebMD, Inc. and David Gang | |||
99.3 | Letter Agreement, dated as of April 27, 2005, between WebMD Corporation and Roger C. Holstein |