EX-10.1 LETTER AGREEMENT



 






EXHIBIT 10.1




[Letterhead of Emdeon Corporation]




October 25, 2005




Revised November 9, 2005




Mr. Kirk Layman

[Address]



Dear Kirk:




     This letter agreement (“Agreement”) confirms our mutual understanding with respect to your
separation from the employ of Emdeon Corporation (formerly WebMD Corporation) (the “Company”).



     1. Separation Date.



     (a) The effective date of your separation from the employ of the Company will occur on
November 30, 2005 (the “Separation Date”). You will continue to receive your current base salary
and benefits during the period through and including the Separation Date and you will be paid for
any accrued, but not taken, vacation days in accordance with the Company’s prevailing payroll
practices. Information regarding your ability to continue your health insurance coverage under
the Company’s group health plan pursuant to the federal “COBRA” law and the Company’s 401(k) plan
and Performance Incentive Plan (PIP) will be sent to you separately by the applicable plan
administrators.



     (b) From now through the Separation Date, you shall not be required to report to the office
unless otherwise requested by the Company. However, you shall, during this time, remain available
to answer questions and otherwise cooperate in order to assist in a smooth transition, including
providing a transition memo that details all projects and their current status. In addition,
during this time, you shall not act as an officer of the Company or act on its behalf or bind the
Company or otherwise give any person the appearance that you have such authority.



     2. Severance Benefits.



     (a) In return for your execution and delivery of this Agreement, and effective upon the
expiration of the Revocation Period (as defined in Section 10), and subject to Section 2(b):




	 	(i)	 	the Company will pay you $550,000 (“Severance Amount”) for a
period commencing on the Separation Date and ending on the first anniversary of
the Separation Date (the “Severance Period”). Such Severance Amount will be
paid during the Severance Period in equal installments, pursuant to the




 










 






	 	 	 	Company’s prevailing payroll practices and subject to applicable tax
withholdings, provided that the Severance Amount for the first six
months of the Severance Period will be paid to you 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 (“Section 409A”) (except to
the extent any future guidance issued by the Internal Revenue Service under
Section 409A does not subject such Base Salary payments to Section 409A).
	 
	 	(ii)	 	if you elect to continue your health insurance coverage under the
Company’s group health plan pursuant to COBRA, the Company will continue to pay,
for the duration of the Severance Period (or, if earlier, until you are eligible
for comparable coverage with a subsequent employer), that portion of the COBRA
premium that the Company pays for active employees with similar coverage. The
remaining balance of any premium costs, and all premium costs after such date,
will be paid by you on a monthly basis for as long as, and to the extent that
you remain eligible for COBRA continuation. You agree to promptly notify the
Company if you obtain employment that provides health insurance coverage or you
otherwise become eligible for employer-sponsored health insurance.
	 
	 	(iii)	 	the Company will pay you a payment equal to $9,500 (less
applicable withholdings) in lieu of the provision of outplacement counseling and
services, payable within 10 days of the expiration of the Revocation Period.
	 
	 	(iv)	 	the option to purchase shares of Emdeon common stock granted to
you on March 17, 2004 shall remain outstanding and continue to vest as if you
remained in the employ of the Company through the last vesting date on September
17, 2007 (“Vesting Date”), and the option shall remain outstanding and
exercisable for 1 year from the Vesting Date.
	 
	 	(v)	 	the option to purchase shares of Emdeon common stock granted to
you on June 5, 2000 shall remain outstanding and exercisable for 3 years from
the Separation Date.
	 
	 	(vi)	 	the Company will pay to your attorney, Stephen Skonieczny, Esq.
of Dechert LLP, a payment not to exceed $5,000 for costs incurred in connection
with negotiating this Agreement, payable upon presentment of an appropriate
invoice, for which the Company shall issue the appropriate IRS Form 1099.





     (b) Any obligations or commitments of the Company pursuant to this Agreement shall immediately
cease in the event that you breach this Agreement or any restrictive covenants to which you are
bound (including, without limitation, the Key Employee Agreement signed by you, and those contained
in any option or restricted stock agreements that you have signed (collectively the “Restrictive
Covenants”)). In the event of such a breach following payment of its obligations hereunder, the
Company may (in addition to any remedy otherwise available to it) seek to recover the



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amounts paid under this Agreement, and any attorneys’ fees and costs incurred in such action,
to the extent permitted by law.



     3. Release.



     (a) In return for the commitments made by the Company pursuant to Section 2, and in lieu of
other benefits, you hereby fully, forever, irrevocably and unconditionally release and discharge
the Company, its divisions, subsidiaries and affiliates and their respective current and former
directors, officers, shareholders, insurers, plan administrators, agents and employees (in both
their official and personal capacities), and each of its predecessors, successors, and assigns (all
of which are hereafter collectively referred to as “Releasees”), from any and all claims arising or
related to your employment or the conclusion of such employment, including without limitation,
claims for salary, overtime compensation, bonuses, equity arrangements, severance pay, vacation
pay, commissions or any benefits under the Employee Retirement Income Security Act (ERISA); claims
for sexual or other harassment or discrimination under federal, state or local law based on
pregnancy, sex, race, color, national origin, ancestry, religion, marital status, sexual
orientation, citizenship status, medical condition or disability (as defined by the Americans with
Disabilities Act, or any other state or local law), age, or any other unlawful discrimination
(including, without limitation, claims under the Age Discrimination in Employment Act (ADEA) as
amended by the Older Workers Benefit Protection Act of 1990, Title VII of the Civil Rights Act of
1964 as amended, the Americans with Disabilities Act, the Equal Pay Act, the federal Family and
Medical Leave Act, Fair Labor Standards Act, Worker Adjustment and Retraining Notification Act, the
New Jersey Law Against Discrimination, New Jersey Family Leave Act, or any other federal, state, or
local laws or regulations); any claims for retaliation; any claims for breach of implied or express
contract, breach of promise, misrepresentation, negligence, fraud, estoppel, defamation, infliction
of emotional distress, violation of public policy or wrongful or constructive discharge, violation
of federal or state whistleblower or retaliatory personnel laws, specifically New Jersey’s
Conscientious Employee Protection Act (CEPA); or any other causes of action, whether statutory or
common law and/or for attorneys’ fees, which you, your heirs, executors, administrators,
successors, and assigns now have, ever had or may hereafter have, whether known or unknown, up to
and including the date of your execution of this Agreement. You represent that you have no
lawsuits, claims or actions pending in your name or on behalf of any other person or entity,
against Releasees. You agree that in the event you bring a claim covered by this release in which
you seek damages against Releasees or in the event you seek to recover against Releasees in any
claim brought by a governmental agency on your behalf, this Agreement shall serve as a complete
defense to such claims.



     (b) Section 2(b) and the last sentence of Section 3(a) are not intended to and shall not
affect your right to file a lawsuit, complaint or charge that challenges the validity of this
Agreement under the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), with respect to
claims under the ADEA, and such Sections shall not apply in any respect to such claims. This
Section is not intended to and shall not limit the right of a court to determine, in its
discretion, that the Company is entitled to restitution, recoupment or setoff of any monies paid
should the release of ADEA claims in this Agreement be found to be invalid. Neither does this
Section affect the Company’s right to recover attorney fees or costs to the extent authorized under
federal law. Section 2(b) and the last sentence of Section 3(a) shall apply with full force and
effect with respect to any other legal proceeding.



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     (c) Excepted from, and not covered by the release set forth in Section 3(a), are only claims
(1) to enforce the obligations of the Company contained in this Agreement and in any vested stock
option (as amended herein) or restricted stock agreements, (2) for vested ERISA rights, and (3) for
legally-protected rights to file charges or participate in proceedings with the Equal Employment
Opportunity Commission (“EEOC”) or similar state or local fair employment practice (FEP) agency.



     (d) In addition, the release set forth in Section 3(a) shall not apply to any obligations of
the Company to continue to provide director and officer indemnification to you in accordance with
the Company’s Bylaws and Charter, and the Indemnity Agreement between you and the Company dated as
of August 12, 2002, and applicable law.



     4. Equity. All shares of restricted stock of Emdeon that have not vested as of the
Separation Date shall be deemed forfeited on the Separation Date. Except as set forth in Section
2(a)(iv) and (v), all options to purchase Emdeon common stock that have vested as of the Separation
Date shall be exercisable for the post-termination exercise period set forth in the applicable
stock option agreement and Plan, except that any option to purchase shares of Emdeon common
stock that was granted before June 4, 2000 shall be exercisable for a period of one year from the
Separation Date. Attached as Annex A is a chart describing the expiration date applicable to the
options.



     5. Return of Company Property. You agree to return all Company property and equipment
in your possession or control, including, but not limited to, the Company’s computer, files and
documents. You also agree to leave intact all electronic Company documents, including those that
you developed or helped develop. You are required to return such property regardless of whether
you sign this Agreement.



     6. Waiver of Rights. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A waiver or consent
given by the Company on any one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.



     7. Cooperation. In consideration for the Company’s obligations hereunder, you hereby
agree that upon reasonable notice and without unreasonably interfering with obligations you may
have to a subsequent employer (a) you will promptly respond to, and cooperate with, any requests
from the Company for information concerning the Company and/or its affiliates, and (b) you will
fully cooperate with the Company with respect to any pending or future proceedings, lawsuits, or
investigations concerning the Company and/or its affiliates, including by making yourself available
to meet with and provide information to counsel for the Company or, if requested, to any government
agency. The Company will, as a condition to your obligations under this Section, reimburse you for
any reasonable out of pocket expenses incurred as a result of such cooperation, provided
that such expenses have been approved in writing in advance by an executive officer of the Company.



     8. Applicable Law. This Agreement shall be interpreted and construed by the laws of
the State of New Jersey, without regard to conflict of laws provisions. You hereby irrevocably
submit to



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and acknowledge and recognize the jurisdiction of the courts of the State of New Jersey or, if
appropriate, a federal court within New Jersey (which courts, together with all applicable
appellate courts, for purposes of this agreement, are the only courts of competent jurisdiction),
over any suit, action or other proceeding arising out of, under or in connection with this
Agreement or the subject matter hereof.



     9. Entire Agreement/Severability. You understand and agree that this Agreement, the
Restrictive Covenants, and the option agreements (as amended herein) and restricted stock agreement
referred to herein, contain and constitute all understandings and agreements between the parties
hereto and cancel any and all other oral and written negotiations, agreements, commitments, and
writings between the parties. The parties agree that this Agreement may not be modified, altered
or changed except by a written agreement signed by the parties, hereto. If any provision of this
Agreement is held by a Court to be invalid, the remaining provisions will remain in full force and
effect. In addition, the Indemnity Agreement between you and the Company dated as of August 12,
2002, and the Undertaking signed by you and the Company dated October 16, 2003, shall remain in
full force and effect.



     10. Acceptance. You shall have at least twenty-one (21) days from the date set forth
above to consider the terms of this Agreement. In order to receive the benefits and payments
provided for by Section 2 of this Agreement, you must execute this Agreement and return it to the
Company addressed to Anne Smith, Esq., Employment Counsel, at 669 River Drive, Center 2, Elmwood
Park, New Jersey 07407 so that it is received on or before the 21st day after your
receipt of the Agreement. After executing the Agreement, you shall have seven (7) days (the
“Revocation Period”) to revoke it by indicating your desire to do so in writing addressed to and
received by Anne Smith, Esq., at the address set forth above no later than the seventh
(7th) day following the date you executed the Agreement. In the event you do not accept
this Agreement, or in the event you revoke this Agreement during the Revocation Period, the
obligations of the Company to make the payments and provide the benefits set forth in Section 2
shall automatically be deemed null and void. No payments or benefits will be paid or provided
under Section 2 of this Agreement until expiration of the Revocation Period.



     11. Voluntary Assent. You affirm that you have read this Agreement, and understand
all of its terms, including the full and final release of claims set forth in Section 3. You
further acknowledge that you have voluntarily entered into this Agreement; that you have not relied
upon any representation or statement, written or oral, not set forth in this Agreement; that the
only consideration for signing this Agreement is as set forth herein; that the consideration
received for executing this Agreement is greater than that to which you may otherwise be entitled;
and that this document gives you the opportunity and encourages you to have this Agreement reviewed
by your attorney and/or tax advisor. You also acknowledge that you have been given at least
twenty-one (21) days to consider this Agreement and that you understand that you have seven (7)
days after executing it to revoke it in writing, and that, to be effective, such written revocation
must be received by the Company within the seven (7) day Revocation Period.



     12. Counterparts. The Agreement may be executed in two (2) signature counterparts,
each of which shall constitute an original, but all of which taken together shall constitute but
one and the same instrument.



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     13. Taxes. All payments hereunder shall be subject to all applicable federal, state
and local tax withholding obligations.



     14. Successors. This Agreement shall be binding upon, and inure to the benefit of,
successors to the Company, and your heirs and/or estate.



	 	 	 	 	 
	 

	 	Emdeon Corporation	 	 
	 
	 	 	 	 
	 

	 	          /s/ Charles A. Mele	 	 
	 

	 	 

Charles A. Mele
	 	 
	 

	 	Executive Vice President	 	 






	 	 	 
	ACCEPTED AND AGREED:
	 	 
	 
	 	 
	     /s/ Kirk Layman
	 	 
	 

Kirk Layman

	 	 
	 
	 	 
	Dated: 11/16/05
	 	 






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ANNEX A




	 	 	 	 	 	 	 
	Option Grant Date	 	Shares	 	Expiration Date
	 
	June 23, 1997

	 	 	375,000	 	 	November 30, 2006 (1 year post-termination exercise
period from November 30, 2005)
	 
	 	 	 	 	 	 
	June 15, 1999

	 	 	97,500	 	 	November 30, 2006 (1 year post-termination exercise
period from November 30, 2005)
	 
	 	 	 	 	 	 
	October 4, 1999

	 	 	125,000	 	 	November 30, 2006 (1 year post-termination exercise
period from November 30, 2005)
	 
	 	 	 	 	 	 
	June 5, 2000

	 	 	500,000	 	 	November 30, 2008 (3 year post-termination exercise
period from November 30, 2005)
	 
	 	 	 	 	 	 
	August 21, 2000

	 	 	100,000	 	 	August 21, 2010 (remains exercisable through expiration
date of grant)
	 
	 	 	 	 	 	 
	September 20, 2001

	 	 	500,000	 	 	February 28, 2006 (100,000 shares remain exercisable
through 90 day post-termination exercisable period from
November 30, 2005; remaining 400,000 shares
previously exercised)
	 
	 	 	 	 	 	 
	March 17, 2004

	 	 	250,000	 	 	September 17, 2008 (1 year post-termination exercise
period from last vesting date of September 17, 2007)