which Mr. Enright participates at the time of the termination, payment of any unpaid prior years annual bonus and, in addition, all of Mr. Enrights outstanding unvested
equity awards will become vested. If any payments, whether under Mr. Enrights employment agreement or otherwise, would be subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code (the
Code), such payments will be reduced to the extent necessary to avoid the excise tax if doing so would result in a greater net after tax payment to Mr. Enright. Mr. Enright is required to execute and not revoke a release of
claims in order to be eligible to receive severance payments or benefits, other than the Accrued Benefits.
Under the agreement,
cause generally means Mr. Enrights (i) material breach of his fiduciary duties, (ii) material breach of his employment agreement, (iii) willful failure or refusal to follow written policies, (iv) conviction
of, or plea of guilty or nolo contendere to, a felony, or (v) continuing and willful refusal to act as directed by the Companys board of directors. Under the agreement, good reason generally means (i) a reduction in
Mr. Enrights base salary or target annual bonus opportunity, (ii) a material diminution in Mr. Enrights authorities, duties or responsibilities, or (iii) a relocation of Mr. Enrights principal place of
employment more than 50 miles from Gaithersburg, Maryland.
Mr. Enright will be subject to restrictive covenants during the term of
his employment and for a period of one year following the termination of his employment. In particular, Mr. Enright will be prohibited from soliciting the Companys customers, clients and employees and from engaging in sales, marketing or
related activities on behalf of himself or another entity that directly competes with the Company and does business in the same geographical areas in which the Company does business, except that the post-employment restriction on competition does
not apply if Mr. Enrights employment is terminated for cause.
Employment Agreements with Elizabeth A. Czerepak and Sybil Tasker, M.D., MPH
The Company entered into an employment agreement with Elizabeth A. Czerepak, the Chief Financial Officer and Executive Vice President,
Corporate Development and with Sybil Tasker, M.D., MPH, the Chief Medical Officer. Upon the closing of the Mergers, each of these agreements has become agreements of the Company. Each of these agreements provided for an initial term that expired on
December 31, 2017, and a renewal term that is set to expire on December 31, 2018. However, unless either party elects not to renew the agreement by providing at least 90 days prior notice to the other party, the agreement will
automatically renew for
successive one-year terms
effective January 1, 2019 and each January 1 thereafter. As previously disclosed, on May 8, 2018, Ms. Czerepak resigned from her
position with the Company.
The agreements provide Ms. Czerepak and Dr. Tasker with an initial base salary of $290,000. Upon the
closing of the Mergers, the base salary amounts for Ms. Czerepak and Dr. Tasker were increased to $325,000 and $350,000, respectively, and were increased to $360,000 and $380,000 in September 2017, respectively, and Dr. Tasker was
increased to $397,000 on January 1, 2018. In addition, Ms. Czerepak and Dr. Tasker are each eligible to receive an annual discretionary incentive bonus of up to 30% of their respective base salaries based on achievement of performance
goals previously established by the Compensation Committee. Ms. Czerepaks bonus target increased from 30% to 40% of base salary and Dr. Taskers bonus target increased from 30% to 35% of base salary on January 1, 2018.
Ms. Czerepak and Dr. Tasker will be eligible to participate in the Companys employee benefit plans made available to its similarly situated senior executives. Given Ms. Czerepaks resignation from the Company on May 8,
2018, she will not be entitled to an annual discretionary incentive bonus for 2018.
If, prior to a change in control, the Company
terminates the employment of Ms. Czerepak or Dr. Tasker without cause or if such executive resigns for good reason, in addition to the executives Accrued Benefits (to which the executive is entitled on any termination of employment),
the executive will be entitled to receive severance equal to six months of base salary continuation payments, six months of continued coverage under the health insurance plans in which the executive participated at the time of the termination and
payment of any unpaid prior years annual bonus. If such employment termination or resignation occurs within the
one-year
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