Exhibit 10.1
(HEALTH GRADES LOGO) [c83747c8374701.gif]
Mr. Wes Crews
March 31, 2009
Dear Wes,
On behalf of Health Grades, Inc., we are pleased to have you join our company as
Chief Operating Officer, effective April 20, 2009. Outlined below are the terms
of your employment:
At-Will Employment: At-will employment means that you are not employed by Health
Grades for any fixed term. Just as you have the right to terminate your
employment at Health Grades for any reason; Health Grades has the right to
terminate your employment relationship at any time, and for any reason, in the
sole discretion of Health Grades.
Base Compensation: $250,000 annual salary, payable bi-weekly as part of
HealthGrades’ normal payroll cycle.
2009 Cash Bonus: $30,000, payable in two equal installments of $15,000 on
September 30, 2009 and December 31, 2009, respectively.
2009 Incentive Compensation Potential: Paid out annually based on your
individual Incentive Compensation Plan (the “Plan”) as determined by the
Compensation Committee of the Board of Directors. In addition, please note that
this Plan is typically revised annually. Any modifications to the Plan are at
the sole discretion of HealthGrades and the Compensation Committee of the Board
of Directors. The total incentive compensation for 2009 will be up to 40% of
Base Compensation based upon achievement of the Company’s 2009 total revenue
budget.
Restricted Shares of Company Stock (Time Vesting Shares): You will receive
100,000 restricted shares. These shares will be awarded on May 1, 2009. Vesting
will begin on the date of the award as follows: 10% one year from date of award
(equal to 10,000 shares), 20% two years from date of award (equal to 20,000
shares with a resulting cumulative vested share balance of 30,000 shares), 30%
three years from date of award (equal to 30,000 shares with a resulting
cumulative vested share balance of 60,000 shares) and 40% four years from date
of award (equal to 40,000 shares with a resulting cumulative vested share
balance of 100,000 shares). Additional restricted share awards may be made in
the future at the discretion of the Compensation Committee of the Board of
Directors.
Restricted Shares of Company Stock (Performance Based Shares): You will receive
100,000 restricted shares. These shares will be awarded upon approval of the
Compensation Committee of the Board of Directors and vesting will begin at that
time. Vesting for Performance Based shares will occur as follows:
Vesting Schedule
Performance vesting in 25% increments upon achievement of:

  •   Annual revenues of $60 million;

  •   Annual revenues of $80 million;

  •   Operating income of $18 million and 30% operating margin; and

  •   Operating income of $25 million and 30% operating margin.

Upon a change in control, the Performance Based grants will vest from the grant
date:

  •   25% within six months of grant date;

  •   50% if more than six months, but less than one year of grant date;

  •   75% more than one year, but less than two years;

  •   100% more than two years from grant date; and

  •   100% if our stockholders receive $8.00 or more per share in connection
with the change in control transaction

 

 

--------------------------------------------------------------------------------

 

Paid Time Off (PTO): You will receive 26 days of accrued Paid Time Off per year.
Health Grades observes and compensates full-time employees for seven
(7) national holidays per year.
Severance: In the event you are terminated by HealthGrades for other than
“cause”, you will be paid three months base salary. In addition, you will be
paid an additional month’s base salary for each month that you have not accepted
an offer of employment up to a maximum of three additional month’s base salary.
“Cause” shall mean a finding by the Board of Directors that you (i) have engaged
in disloyalty to Health Grades, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty, (ii) have
disclosed trade secrets or confidential information of Health Grades to persons
not entitled to receive such information, (iii) have breached any written
non-competition or non-solicitation agreement between the Grantee and the
Employer or (v) has engaged in such other behavior detrimental to the interests
of Health Grades as the Board of Directors determines.
Note: Severance payout will be in accordance with HealthGrades’ regularly
scheduled payroll cycle for the period of time the severance will run.
Other Employee Benefits: As a full-time employee, you will be eligible to
participate in all other employee benefits, including 401(k) program, as
described in the Employee Handbook.
We look forward to working with you. If you should have any questions, please
call me at (303) 716-6535.
John J. Quattrone
Chairman, Compensation Committee of the Health Grades, Inc. Board of Directors
(SIGNATURE GRAPHIC) [c83747p8374701.gif]

         
Offer expires on April 2, 2009