Exhibit 10.23

 

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October 26, 2016

 

Personal and Confidential

 

By Hand Delivery

 

Christopher E. Greiner

[ADDRESS]

[ADDRESS]

 

RE: Promotion to the joint position of Chief Financial Officer & Chief Operating
Officer

 

Dear Chris:

 

On behalf of Inovalon, Inc. (“Inovalon” or the “Company”), I am pleased to
provide to you this formal letter to confirm and memorialize your promotion from
the combined position of Chief Products and Operations Officer to the combined
position of Chief Operating Officer (COO) and Chief Financial Officer (CFO),
effective November 1, 2016.  In this capacity, your CFO responsibilities will
report directly to me as CEO of the Company, and your COO responsibilities will
continue to report directly to Inovalon’s President Bob Wychulis. For your
benefit and clarity, an outline of the Employee Services for your position is
provided on the attached Schedule A. Effective November 1, this amended Schedule
A replaces the Schedule A attached to your Employment Agreement with Inovalon.

 

This promotion is based upon your clear, consistent, and meaningful contribution
to the Company during your time as Chief Products and Operations Officer. In
that role, you demonstrated the ability to develop and maintain an expert level
of knowledge regarding Employer’s products, services, infrastructure, and
operations to achieve significant insight into its products, services,
capabilities, support, and functionality requirements, as well as providing
strong support to our clients and facilitating these relationships. Further, you
have contributed greatly to the Company’s expanded insight and transparency into
operating metrics and related revenue and financial performance forecasting.
Further still, you have brought a welcomed level of attention to goal setting
and alignment of product teams towards the Company’s operating and financial
goals. On top of these factors, you have demonstrated yourself to be both
near-term and long-term minded with an appreciation of day-to-day tactics as
well as the Company’s overall threats and opportunities. We look forward to you
bringing these skills, along with your product ownership and leadership skills,
to your new role.

 

Effective with this promotion, your annual compensation will be increased by
$65,000 to $465,000 per year.  You will also continue to be eligible for our
expanded benefits package as outlined in your Employment Agreement. A summary of
your compensation and benefits is set forth in the attached Schedule B.
Effective November 1, this amended Schedule B replaces the Schedule B attached
to your Employment Agreement.

 

In recognition of your past and expected future contributions to Inovalon’s
success, we will recommend to the Inovalon Board of Directors that you be
granted an equity award of restricted

 

www.inovalon.com

 

 

 

Tel: (800) 390-3180

4321 Collington Road

 

 

Fax: (301) 809-8060

Bowie, Maryland 20716    USA

 

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stock at the next quarterly Board meeting currently scheduled to occur on
November 10, 2016. Your promotion equity award will be recommended with a value
on the date of the grant of $1,500,000. The number of restricted shares you will
receive will be based on the closing price on the date of grant ($1,500,000 /
closing price on the grant date). This is in addition to and not in place of any
previous equity grants that you may have received from Inovalon. Please note
that restricted shares vest in 20% increments each year over five years and are
subject to forfeiture if you are not continuously employed with Inovalon through
the applicable vesting date.

 

Also, please note that the Compensation Committee of the Inovalon Board of
Directors considered and approved this promotion, along with your salary
increase. The Committee further determined that this promotion would be made
effective as of November 1, rather than during the Company’s annual merit
increases early next year.  However, this adjustment is reflective of any merit
increase to salary that otherwise would have occurred during the annual review
period. Your 2016 bonus will still be considered during the Company’s annual
review cycle.

 

As I hope you know, Chris, I and we believe that you and your work bring
important contributions to Inovalon. We are very pleased to provide you with
this promotion and are confident that you will continue to expand your abilities
and demonstrate yourself as a highly valuable part of the Inovalon team.

 

Please consider this letter to be confidential information protected from
disclosure in accordance with Inovalon’s confidentiality policies.

 

Sincerely,

 

 

 

/s/ Keith Dunleavy, M.D.

 

 

 

Keith Dunleavy, M.D.

 

Chief Executive Officer & Chairman of the Board

 

Inovalon, Inc.

 

 

Please indicate your acknowledgement and acceptance of this letter agreement and
the associated adjustments to your title and reporting alignment by signing
below and returning this to Shauna Vernal by October 31, 2016. By doing so, the
attached Schedule A and B will amend and replace the Schedule A and B applicable
to your previous position, with an effective date of November 1, 2016.

 

ACKNOWLEDGED AND ACCEPTED

 

 

 

 

 

 

 

 

 

 

 

 

Accepted:

/s/ Christopher E. Greiner

 

Dated:

11-11-16

 

Christopher E. Greiner

 

 

 

 

 

 

 

 

 

Enclosure/Attachment

cc:                                File (w/attachment)

 

CONFIDENTIAL

 

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SCHEDULE A

 

Employee Services / Job Description

 

This Schedule A outlines the Employee Services (certain responsibilities and
duties) in connection with your employment with Employer.  Defined terms used,
but not otherwise defined in this Schedule A, have the meanings assigned to
those terms in the Agreement.

 

Position: Chief Financial Officer & Chief Operating Officer

FLSA status: Exempt

 

Responsibilities: The responsibilities and duties of this position include:

 

1)             Develop and maintain an expert level of knowledge regarding
vision, industry, markets, products, services, infrastructure, regulatory
requirements, and operations of the Company to achieve optimal insight into the
Company’s projections, goals, opportunities, threats, product development,
operation, capabilities, support, and functionality requirements;

 

2)             Manage, maintain, and ultimately be responsible for all
activities, responsibilities, and reporting of Employer’s operations department
and function, to include (without limitation):

 

a)             Manage, maintain, and be ultimately responsible for all
operations pertaining to the Company’s delivery of products and services through
internal and/or third-party vendor relationships, fulfilling such in a manner as
to maximize the Company’s overall success, fulfillment of its contractual
obligations, adherence with regulatory requirements, achievement of its
corporate mission, and achievement of its fiscal goals;

 

b)             Maintain comprehensive communication with Inovalon management and
appropriate internal  personnel, vendors, and clients regarding timelines,
readiness, needs, risks, cost implications, resource requirements, and all other
material aspects related to the Company’s operations;

 

c)              Lead, appropriately scale, drive, and manage all personnel
teams, tools, processes, policies, compliance, procedures, quality assurance, 
and associated resources to achieve the Company’s goals as outlined above;
notably including the areas of operations;

 

3)             Manage, maintain, and ultimately be responsible for all
activities, responsibilities, and reporting of Employer’s finance department and
function, to include (without limitation):

 

a)             the development and execution of financial procedures, policies,
and controls, reporting, and maintenance of corporate accounting and financial
records to provide accurate, reliable and timely financial data, safeguard
assets and records, evaluate operational efficiency, and achieve adherence to
prescribed policies and procedures;

 

b)             financial and administrative oversight to ensure that accounting,
budgeting, and financial reporting systems meet the needs of Inovalon, senior
management, outside auditors, corporate counsel, and other appropriate
constituencies;

 

c)              the development, maintenance, presentation, and reporting of
timely and accurate periodic (monthly/quarterly/annual) corporate and
departmental projections, budgeting, and reconciliation of such;

 

d)             the provision of timely and accurate periodic
(monthly/quarterly/annual) closings and account reconciliations;

 

e)              timely and accurate payroll policies, procedures, and execution;

 

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f)               timely and accurate client invoicing and accounts receivable
collection policies, procedures, and execution;

 

g)              analyzing cash flow, cost controls, treasury, and expenses to
pinpoint potential weak areas;

 

h)             assisting and advising Employer’s senior management with respect
to financial and cash flow projections in support of achieving financial
performance targets;

 

i)                 providing important input and checks and balances for salary
and headcount strategies;

 

j)                facilitating the design, preparation, and delivery of
customized management reports for senior management;

 

k)             ensuring that effective internal controls are in place and
records are maintained in accordance with Generally Accepted Accounting
Principles (GAAP);

 

l)                 supporting the strategic financial vision and all related
analysis, preparation, and execution issues regarding the public listing,
capitalization, and various additional strategic alternatives including, as
applicable, the:

 

i)                 management of public company reporting, and provide oversight
of, financial contribution to, and review of SEC reporting and internal
controls, to ensure accurate and reliable reporting in compliance with all
applicable laws and regulations; and

 

ii)              development, management, maintenance, and ultimate
responsibility for all accounting policies, processes and practices, including
SOX financial and accounting controls, and reporting to regulatory entities,
shareholders, and other relevant parties, as appropriate.

 

m)         Coordinate and provide guidance to the Company and applicable senior
management regarding tax-planning strategies to minimize tax liabilities and
other corporate taxes issues, and ensure that Employer is in compliance with
Federal, state, and local tax requirements;

 

n)             Serve as a key member of Employer’s corporate and strategic
transaction team, responsible for all financial aspects of any such engagements,
transactions or considerations of such, as well financial aspects of any
post-transaction integrations;

 

o)             Serve as the primary liaison between Employer and its auditors
and independent valuation providers in the coordination and oversight of audit
and independent valuation processes to achieve a timely completion of audit and
independent valuation activities;

 

p)             Serve as the primary executive responsible for selection,
negotiation, and management of primary suppliers, vendors, real estate
management, facilities management, and other third-party relationships with
Employer;

 

q)             Assist senior management in liaising with Employer’s
shareholders, potential investors, and lenders;

 

r)                Assist in the development and maintenance of banking
relationships, and provide guidance and support with respect to appropriate
sources of financing and cash management;

 

s)               Manage and coordinate staff required for the achievement of
Employer’s financial initiatives, operations, and functionality, monitor
performance and evaluate departmental effectiveness;

 

t)                Interact with senior management to provide consultative
support to product and planning initiatives through financial and management
information analyses, reports, and recommendations;

 

4)             Participate as part of Company executive leadership in the
strategic development of initiatives to identify product, system, financial, and
operations enhancements which may improve client appeal, process flow, business
function, and valuation of the Company;

 

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5)             Fulfill those responsibilities and/or duties that may be
reasonably requested by the Company for the purpose of achieving operational and
financial success of the Company;

 

6)             Adhere to and support all confidentiality and HIPAA requirements
as outlined within the Company’s Operating Policies and Procedures in all ways
and at all times with respect to any aspect of the data handled or services
rendered in the scope of work; and

 

7)             Maintain a high level of integrity and accountability
commensurate with the title and position in the company.

 

General Expectations: The following constitute specific general expectations
regarding Employee’s provision of services with Employer:

 

1.              Travel.  The position will require material travel to locations
other than the primary office where Employee will be located, generally
consisting of one to two days per week (on a quarterly average basis), in the
provision of the Employee services.  Such travel is generally expected to be to
customer, potential customer, other Employer office locations, as well as other
general related (e.g. conferences, management related) travel.  Seasonality of
specific product lines may lead to concentrations of travel during specific
periods of the year.

 

2.              Location.  The primary office of Employee will be in Bowie,
Maryland.  Daily onsite business operation presence is expected during all days
during which Employer is open for business, except during business-related
travel and vacation/personal days off.

 

3.              Performance Reviews/Merit Increases.  Inovalon’s annual
performance review process is administered on a calendar year basis.  Associates
who are actively employed as of September 30 of each year will be scheduled to
receive a performance review, and they will be considered for participation in
the annual merit program.  This review is based on individual and/or team
performance, as appropriate, considering position and/or level of responsibility
in the organization.  Associates who begin employment on or after October 1 will
be eligible to participate in the next annual performance review process
following their initial 12 months of service.

 

4.              Leadership.  The position outlined is expected to require
significant energy, self-motivation, perseverance, and leadership to
successfully execute.

 

5.              Beliefs and Core Values.   Inovalon is aligned around the seven
core values of I.N.S.P.I.R.E.: Integrity, Nimbleness, Service,
Passion, Innovation, Respect and Excellence.  Employees are expected to perform
their regular duties in ways which adhere to and exemplify Employer’s Core
Values.

 

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SCHEDULE B

 

Compensation and Benefits

 

This Schedule B outlines your compensation and benefits in connection with your
employment with  Employer.  Defined terms used, but not otherwise defined in
this Schedule B, have the meanings assigned to those terms in the Agreement.

 

1.              Salary.  Employee will be paid a gross base salary by Employer
at the rate of $465,000 per year, less all tax and other withholdings and
deductions required to be made by applicable law (the “Salary”).  The Salary
will be paid by Employer to the Employee every two weeks, or in such other
periodic payments as are in accordance with Employer’s then applicable payroll
policies.

 

2.              Performance Incentive: Employee will be eligible annually,
subject to annual approval by the compensation committee of the board of
directors of Employer, for a performance incentive of cash and equity awards,
generally targeting 250% of Employee’s Salary during the year for which the
Performance Incentive is paid (the “Target Total”).  The Performance Incentive
is subject to certain criteria (as further described below).  If your Promotion
Date occurs after the first business day of the year, the Performance Incentive
for that year will be prorated accordingly.  Employee will not be eligible for
any Performance Incentive for any particular year unless continuously employed
by Employer through the date the Performance Incentive for that year becomes
payable.  The Performance Incentive consists of i) a cash bonus opportunity, ii)
a Traditional Equity Incentive opportunity, and iii) a Long-Term Equity
Incentive opportunity. The components of the Performance Incentive will
generally be split 50%, 125%, and 75%, respectively, totaling to the
aforementioned Target Total of 250%.  Payment of this Performance Incentive is
dependent (a) first upon Employer performance (success, profitability, and other
metrics) within the ranges approved by Employer’s board of directors;
(b) second, performance of the departments and personnel you are responsible for
supervising, in accordance with the budget, metrics and strategic objectives
that may be established by Employer and/or the board of directors from time to
time; and (c) third, upon your individual performance.  As with all executive
compensation, Performance Incentives are subject to modification by the
compensation committee of the board of directors as determined appropriate each
year in connection with their duties to review executive compensation.  For the
sake of clarity, Performance Incentives might not be paid in years where
Employer does not achieve its performance goals within the parameters
established by the board of directors.

 

3.              Equity Incentives.  In recognition of your expected future
contributions to Inovalon’s success, it is the desire of the board of directors
to align your interests with those of Employer’s shareholders.  Accordingly, you
will be granted a one-time award in association with your promotion to this
position (the “Promotion Award”) of $1,500,000 at the next quarterly board
meeting following your Promotion Date in the form of Restricted Stock. You will
also be eligible for annual grants of Equity Incentives, as described in
Section 2 of this Schedule B, as determined by and subject to the approval of
the board of directors.  At the discretion of the board of directors, equity
incentives/awards are granted to recognize contributions of Employer’s
executives to the growth and success of Employer and may be in any form
permitted by Employer’s 2015 Omnibus Incentive Plan (“Omnibus Plan”), as in
effect at the time of the award.  Currently, under the Omnibus Plan, these
awards may consist of Restricted Stock, Restricted Stock Units (“RSUs”), options
to purchase shares of the common stock of Employer (the “Options”), or certain
other forms providing similar incentive opportunities. The frequency, amount,
timing, and vesting of any Equity Incentive will be as determined by the board
of directors. Currently, Equity Incentives referred to as “Traditional Equity
Incentives” vest equally over five years, with 20% vesting on each anniversary
of the grant, and Equity Incentives referred to as “Long-Term Equity Incentives”
vest 100% upon the fifth anniversary of the grant with 50% of such vesting being
subject to the Company’s achievement of specific financial performance metrics.
The date of annual Equity Incentive grants will be as determined by the Board. 
The determination of the forms of Equity Incentives will be at the sole
discretion of Employer.

 

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4.              Health Care Coverage.  Beginning with the first of the month
following the Effective Date, you will continue to be eligible to participate in
Employer’s health care insurance coverage, subject to the policy, co-pay, and
specific benefits of Employer’s group plan or plan of materially similar
benefits.  Partial Employee contribution toward premium is required for
participation in health care coverage.

 

5.              Dental Care Coverage.  Beginning with the first of the month
following the Effective Date, you will continue to be eligible to participate in
Employer’s dental coverage, subject to the policy, co-pay, and specific benefits
of Employer’s group plan or plan of materially similar benefits.  Partial
Employee contribution toward premium is required for participation in dental
coverage.

 

6.              Vision Care Coverage.  Beginning with the first of the month
following the Effective Date, you will continue to be eligible to participate in
Employer’s vision coverage, subject to the policy, co-pay, and specific benefits
of Employer’s group plan or plan of materially similar benefits.

 

7.              Group Life Insurance.  Following the Effective Date, Employer
will continue to pay the cost of the premium on your behalf for a life insurance
policy carrying a benefit equal to your gross annual base Salary, up to a
maximum of $250,000.  You will also have the option to purchase supplemental
insurance coverage (for you, a spouse, a domestic partner, or children), subject
to certain maximums and other terms and conditions of the insurance underwriter.

 

8.              Disability Insurance. Following the Effective Date, Employer
will continue to pay the cost of the premium on your behalf for short-term &
long-term disability coverage payable for lost income due to illness or injury. 
You will also continue to be eligible to participate in an additional buy-up
long-term disability plan, which would be 100% paid for by the employee.

 

9.              401(k) Plan Benefits.  Following the Effective Date, you will
continue to be eligible to participate in Employer’s 401(k) Plan benefits.  Such
participation may be matched by Employer up to such percentage of your Salary as
may be determined from time to time, which is currently 4%, and subject to
applicable annual limitations on your contributions.  The exact parameters of
the 401(k) Retirement Savings Plan benefits may change from time to time as
dictated by ERISA compliance and Employer’s Summary Plan Description.

 

10.       Personal Time Off (“PTO”).  You will continue to receive PTO (paid
vacation / personal days / sick days) as provided for in Employer’s PTO policies
or as may be modified thereafter.  Employer acknowledges that you may not always
be able to predict with significant forewarning when you may need to take
vacation or sick days.  Nevertheless, Employer respectfully requests as much
forewarning (of at least four weeks if possible) as is reasonably possible prior
to requested vacation periods for which the desired vacation periods are of
duration of two or more consecutive business day (for example: a consecutive
Thursday and Friday, or a Friday and following Monday).

 

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