Document:

Exhibit 10.1

 

GENOMIC HEALTH, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

 

Table of Contents

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 1
    	
 
    	
Purpose Of The Plan
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2
    	
 
    	
Definitions
    	
1
    
	
(a)
    	
“Board”
    	
1
    
	
(b)
    	
“Code”
    	
1
    
	
(c)
    	
“Committee”
    	
1
    
	
(d)
    	
“Company”
    	
1
    
	
(e)
    	
“Compensation”
    	
1
    
	
(f)
    	
“Corporate Reorganization”
    	
1
    
	
(g)
    	
“Eligible Employee”
    	
1
    
	
(h)
    	
“Exchange Act”
    	
2
    
	
(i)
    	
“Fair Market Value”
    	
2
    
	
(j)
    	
“Offering”
    	
2
    
	
(k)
    	
“Offering Date”
    	
2
    
	
(l)
    	
“Offering Period”
    	
2
    
	
(m)
    	
“Participant”
    	
2
    
	
(n)
    	
“Participating Company”
    	
2
    
	
(o)
    	
“Plan”
    	
2
    
	
(p)
    	
“Plan Account”
    	
2
    
	
(q)
    	
“Purchase Date”
    	
3
    
	
(r)
    	
“Purchase Period”
    	
3
    
	
(s)
    	
“Purchase Price”
    	
3
    
	
(t)
    	
“Stock”
    	
3
    
	
(u)
    	
“Subsidiary”
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3
    	
 
    	
Administration Of The Plan
    	
3
    
	
(a)
    	
Committee Composition
    	
3
    
	
(b)
    	
Committee Responsibilities
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4
    	
 
    	
Enrollment And Participation
    	
4
    
	
(a)
    	
Offering Periods
    	
4
    
	
(b)
    	
Enrollment
    	
4
    
	
(c)
    	
Duration of Participation
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5
    	
 
    	
Employee Contributions
    	
5
    
	
(a)
    	
Frequency of Payroll Deductions
    	
5
    
	
(b)
    	
Amount of Payroll Deductions
    	
5
    
	
(c)
    	
Changing Withholding Rate
    	
5
    
	
(d)
    	
Discontinuing Payroll Deductions
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6
    	
 
    	
Withdrawal From The Plan
    	
5
    
	
(a)
    	
Withdrawal
    	
5
    
	
(b)
    	
Re-enrollment After Withdrawal
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 7
    	
 
    	
Change In Employment Status
    	
6
    
	
(a)
    	
Termination of Employment
    	
6
    

 

 

	
(b)
    	
Leave of Absence
    	
6
    
	
(c)
    	
Death
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8
    	
 
    	
Plan Accounts And Purchase Of Shares
    	
6
    
	
(a)
    	
Plan Accounts
    	
6
    
	
(b)
    	
Purchase Price
    	
6
    
	
(c)
    	
Number of Shares Purchased
    	
6
    
	
(d)
    	
Available Shares Insufficient
    	
7
    
	
(e)
    	
Issuance of Stock
    	
7
    
	
(f)
    	
Unused Cash Balances
    	
7
    
	
(g)
    	
Stockholder Approval
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9
    	
 
    	
Limitations On Stock Ownership
    	
7
    
	
(a)
    	
Five Percent Limit
    	
7
    
	
(b)
    	
Dollar Limit
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10
    	
 
    	
Rights Not Transferable
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 11
    	
 
    	
No Rights As An Employee
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 12
    	
 
    	
No Rights As A Stockholder
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 13
    	
 
    	
Securities Law Requirements
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 14
    	
 
    	
Stock Offered Under The Plan
    	
9
    
	
(a)
    	
Authorized Shares
    	
9
    
	
(b)
    	
Antidilution Adjustments
    	
9
    
	
(c)
    	
Reorganizations
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 15
    	
 
    	
Amendment Or Discontinuance
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 16
    	
 
    	
Execution
    	
10
    

 

 

GENOMIC HEALTH, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

SECTION 1                                   Purpose Of The Plan.

 

The Plan was adopted by the Board on January 27, 2011 and shall be effective on July 1, 2011, subject to stockholder approval (the “Effective Date”).  The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Stock from the Company on favorable terms and to pay for such purchases through payroll deductions.  The Plan is intended to qualify under section 423 of the Code.

 

SECTION 2                                   Definitions.

 

(a)                                  “Board” means the Board of Directors of the Company, as constituted from time to time.

 

(b)                                 “Code” means the Internal Revenue Code of 1986, as amended.

 

(c)                                  “Committee” means a committee designated by the Board, as described in Section 3.

 

(d)                                 “Company” means Genomic Health, Inc., a Delaware corporation.

 

(e)                                  “Compensation” means the basic compensation and commissions paid in cash to a Participant by a Participating Company, without reduction for any pre-tax contributions made by the Participant under sections 401(k) or 125 of the Code.  “Compensation” shall exclude bonuses, incentive compensation, overtime pay, shift premiums and other extraordinary compensation, all non-cash items, moving or relocation allowances, cost-of-living equalization payments, car allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to the exercise of stock options, and similar items. The Committee shall determine whether a particular item is included in Compensation.

 

(f)                                    “Corporate Reorganization” means:

 

(i)                                     The consummation of a merger or consolidation of the Company with or into another entity, or any other corporate reorganization; or

 

(ii)                                  The sale, transfer or other disposition of all or substantially all of the Company’s assets or the complete liquidation or dissolution of the Company.

 

(g)                                 “Eligible Employee” means any employee of a Participating Company. The foregoing notwithstanding, an individual shall not be considered an Eligible Employee if his or her participation in the Plan is prohibited by the law of any country which has jurisdiction over him or her.

 

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(h)                                 “Exchange Act” means the Securities Exchange Act of 1934.

 

(i)                                     “Fair Market Value” means the fair market value of a share of Stock, determined by the Committee as follows:

 

(i)                                     If the Stock was traded on The NASDAQ Stock Market on the date in questions, then the Fair Market Value shall be equal to the last reported sale price quoted for such date by The NASDAQ Stock Market;

 

(ii)                                  If Stock was traded on any other United States securities exchange, including the New York Stock Exchange, on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable composite transactions report; or

 

(iii)                               If the Stock was not listed for trading on a United States securities exchange but traded over-the-counter on the date in question, then the Fair Market Value shall be equal to the closing price for such date or, if no closing price is reported, shall be equal to the mean between the last reported representative bid and ask prices for such date, as reported by OTC Markets Group Inc. or similar organization;

 

(iv)                              If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate.

 

For any date that is not a Trading Day, the Fair Market Value of a share of Stock for such date shall be determined by using the last reported, closing or bid and asked prices, as applicable, for the immediately preceding Trading Day.  In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons.

 

(j)                                     “Offering” means the grant of options to purchase shares of Stock under the Plan to Eligible Employees.

 

(k)                                  “Offering Date” means the first day of an Offering.

 

(l)                                     “Offering Period” means a period with respect to which the right to purchase Stock may be granted under the Plan, as determined pursuant to Section 4(a).

 

(m)                               “Participant” means an Eligible Employee who elects to participate in the Plan, as provided in Section 4(b).

 

(n)                                 “Participating Company” means (i) the Company and (ii) each present or future Subsidiary designated by the Committee as a Participating Company.

 

(o)                                 “Plan” means this Genomic Health, Inc. Employee Stock Purchase Plan, as it may be amended from time to time.

 

(p)                                 “Plan Account” means the account established for each Participant pursuant to Section 8(a).

 

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(q)                                 “Purchase Date” means one or more dates during an Offering on which shares of Stock may be purchased pursuant to the terms of the Offering.

 

(r)                                    “Purchase Period” means one or more successive periods during an Offering, beginning on the Offering Date or on the day after a Purchase Date, and ending on the next succeeding Purchase Date.

 

(s)                                  “Purchase Price” means the price at which Participants may purchase shares of Stock under the Plan, as determined pursuant to Section 8(b).

 

(t)                                    “Stock” means the Common Stock of the Company.

 

(u)                                 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

(r)                                    “Trading Day” means a day on which the primary securities exchange on which the Stock is traded is open for trading or, if the Stock is not traded on a national securities exchange a day on which The NASDAQ Stock Market is open for trading.

 

SECTION 3                                   Administration Of The Plan.

 

(a)                                  Committee Composition.  The Plan shall be administered by the Committee.  The Committee shall consist exclusively of one or more directors of the Company, who shall be appointed by the Board.

 

(b)                                 Committee Responsibilities.  The Committee shall have full power and authority, subject to the provisions of the Plan, to promulgate such rules and regulations as it deems necessary for the proper administration of the Plan, to interpret the provisions and supervise the administration of the Plan, and to take all action in connection therewith or in relation thereto as it deems necessary or advisable.  Any decision reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made at a meeting duly held.  The Committee’s determinations under the Plan, unless otherwise determined by the Board, shall be final and binding on all persons.  The Company shall pay all expenses incurred in the administration of the Plan.  No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully indemnified by the Company with respect to any such action, determination or interpretation.  The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan, including sub plans which the Committee may establish (which need not qualify under Section 423 of the Code) for the purpose of (i) facilitating participation in the Plan by non-U.S. employees in compliance with foreign laws and regulations without affecting the qualification of the remainder of the Plan under Section 423 of the Code, or (ii) qualifying the Plan for preferred tax treatment under foreign tax laws (which sub plans, at the Committee’s discretion, may provide for allocations of the authorized Shares reserved for issue under the Plan as set forth in Section 14(a)).  The rules of such sub plans may take precedence over other provisions of the Plan, with the exception of Section 14(a), but unless otherwise superseded by the terms of such sub plan, the provisions of the Plan shall govern the

 

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operation of such sub plan. Alternatively and in order to comply with the laws of a foreign jurisdiction, the Committee shall have the power, in its discretion, to grant options in an Offering to citizens or residents of a non-U.S. jurisdiction (without regard to whether they are also citizens of the United States or resident aliens) that provide terms which are less favorable than the terms of options granted under the same Offering to employees resident in the United States, subject to compliance with Section 423 of the Code.  Notwithstanding anything to the contrary in the Plan, the Board may, in its sole discretion, at any time and from time to time, resolve to administer the Plan.  In such event, the Board shall have all of the authority and responsibility granted to the Committee herein.

 

SECTION 4                                   Enrollment And Participation.

 

(a)                                  Offering Periods.  While the Plan is in effect, the Committee may from time to time grant options to purchase shares of Stock pursuant to the Plan to Eligible Employees during a specified Offering Period.  Each such Offering shall be in such form and shall contain such terms and conditions as the Committee shall determine, subject to compliance with the terms and conditions of the Plan (which may be incorporated by reference) and the requirements of Section 423 of the Code, including the requirement that all Eligible Employees have the same rights and privileges.   The Committee shall specify prior to the commencement of each Offering (i) the period during which the Offering shall be effective, which may not exceed 27 months from the Offering Date and may include one or more successive Purchase Periods within the Offering, (ii) the Purchase Dates and Purchase Price for shares of Stock which may be purchased pursuant to the Offering, and (iii) if applicable, any limits on the number of shares purchasable by a Participant, or by all Participants in the aggregate, during any Offering Period or, if applicable, Purchase Period, in each case consistent with the limitations of the Plan.  The Committee shall have the discretion to provide for the automatic termination of an Offering following any Purchase Date on which the Fair Market Value of a share of Stock is equal to or less than the Fair Market Value of a share of Stock on the Offering Date, and for the Participants in the terminated Offering to be automatically re-enrolled in a new Offering that commences immediately after such Purchase Date.  The terms and conditions of each Offering need not be identical, and shall be deemed incorporated by reference and made a part of the Plan.

 

(b)                                 Enrollment.  Any individual who, on the day preceding the first day of an Offering Period, qualifies as an Eligible Employee may elect to become a Participant in the Plan for such Offering Period by executing the enrollment form prescribed for this purpose by the Company.  The enrollment form shall be filed with the Company in accordance with such procedures as may be established by the Company.

 

(c)                                  Duration of Participation.  Once enrolled in the Plan, a Participant shall continue to participate in the Plan until he or she ceases to be an Eligible Employee or withdraws from the Plan under Section 6(a).  A Participant who withdrew from the Plan under Section 6(a) may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in Subsection (b) above.  A Participant whose employee contributions were discontinued automatically under Section 9(b) shall automatically resume participation at the beginning of the earliest Offering Period ending in the next calendar year, if he or she then is an Eligible Employee.  When a Participant reaches the end of an Offering Period but his or her

 

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participation is to continue, then such Participant shall automatically be re-enrolled for the Offering Period that commences immediately after the end of the prior Offering Period.

 

SECTION 5                                   Employee Contributions.

 

(a)                                  Frequency of Payroll Deductions.  A Participant may purchase shares of Stock under the Plan solely by means of payroll deductions; provided, however, that to the extent provided in the terms and conditions of an Offering, a Participant may also make contributions through payment by cash or check prior to one or more Purchase Dates during the Offering.  Payroll deductions, subject to the provisions of Subsection (b) below or as otherwise provided by the Committee, shall occur on each payday during participation in the Plan.

 

(b)                                 Amount of Payroll Deductions.  An Eligible Employee shall designate on the enrollment form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Stock.  Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 15%, or such lesser percentage provided in the terms or conditions of an Offering.  However, no payroll deduction will be made unless a Participant timely files the proper form with the Company after a registration statement covering the Stock is filed and effective under the Securities Act of 1933.

 

(c)                                  Changing Withholding Rate.  A Participant may not increase the rate of payroll withholding during the Offering Period, but unless otherwise provided under the terms and conditions of an Offering, may decrease the rate of payroll withholding to a whole percentage of his or her Compensation that is not less than 1% in accordance with such procedures and subject to such limitations as the Company may establish for all Participants.  A Participant may also increase or decrease the rate of payroll withholding effective for a new Offering Period by filing a new enrollment form with the Company at the prescribed location and time.  The new withholding rate shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 15%, or such lesser percentage provided in the terms or conditions of an Offering.

 

(d)                                 Discontinuing Payroll Deductions.  If a Participant wishes to discontinue employee contributions entirely, he or she may do so by withdrawing from the Plan pursuant to Section 6(a).  In addition, employee contributions may be discontinued automatically pursuant to Section 9(b).

 

SECTION 6                                   Withdrawal From The Plan.

 

(a)                                  Withdrawal.  A Participant may elect to withdraw from the Plan by filing the prescribed form with the Company at the prescribed location.  Such withdrawal may be elected at any time before the last day of an Offering Period, except as otherwise provided in the Offering.  In addition, if payment by cash or check is permitted under the terms and conditions of an Offering, Participants may be deemed to withdraw from the Plan by declining or failing to remit timely payment to the Company for the shares of Stock.  As soon as reasonably practicable thereafter, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account shall be refunded to him or her in cash, without interest.  No partial withdrawals shall be permitted.

 

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(b)                                 Re-enrollment After Withdrawal.  A former Participant who has withdrawn from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 4(b).  Re-enrollment may be effective only at the commencement of an Offering Period.

 

SECTION 7                                   Change In Employment Status.

 

(a)                                  Termination of Employment.  Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under Section 6(a).  A transfer from one Participating Company to another shall not be treated as a termination of employment.

 

(b)                                 Leave of Absence.  For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing.  Employment, however, shall be deemed to terminate three months after the Participant goes on a leave, unless a contract or statute guarantees his or her right to return to work.  Employment shall be deemed to terminate in any event when the approved leave ends, unless the Participant immediately returns to work.

 

(c)                                  Death.  In the event of the Participant’s death, the amount credited to his or her Plan Account shall be paid to the Participant’s estate.

 

SECTION 8                                   Plan Accounts And Purchase Of Shares.

 

(a)                                  Plan Accounts.  The Company shall maintain a Plan Account on its books in the name of each Participant.  Whenever an amount is deducted from the Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account.  Amounts credited to Plan Accounts shall not be trust funds and may be commingled with the Company’s general assets and applied to general corporate purposes.  No interest shall be credited to Plan Accounts.

 

(b)                                 Purchase Price.  The Purchase Price for each share of Stock purchased during an Offering Period shall not be less than the lesser of:

 

(i)                                     85% of the Fair Market Value of such share on the Purchase Date; or

 

(ii)                                  85% of the Fair Market Value of such share on the last Trading Day preceding the Offering Date.

 

(c)                                  Number of Shares Purchased.  As of each Purchase Date, each Participant shall be deemed to have elected to purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Plan in accordance with Section 6(a).  The amount then in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The foregoing notwithstanding, no Participant shall purchase more than such number of shares of Stock as may be determined by the Committee with respect to the Offering Period, or Purchase Period, if applicable, nor more than the amounts of Stock set forth in Sections 9(b) and 14(a).  For each Offering Period and, if

 

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applicable, Purchase Period, the Committee shall have the authority to establish additional limits on the number of shares purchasable by all Participants in the aggregate.

 

(d)                                 Available Shares Insufficient.  In the event that the aggregate number of shares that all Participants elect to purchase during an Offering Period exceeds the maximum number of shares remaining available for issuance under Section 14(a), or which may be purchased pursuant to any additional aggregate limits imposed by the Committee, then the number of shares to which each Participant is entitled shall be determined by multiplying the number of shares available for issuance by a fraction, the numerator of which is the number of shares that such Participant has elected to purchase and the denominator of which is the number of shares that all Participants have elected to purchase.

 

(e)                                  Issuance of Stock.  Certificates representing the shares of Stock purchased by a Participant under the Plan shall be issued to him or her as soon as reasonably practicable after the applicable Purchase Date, except that the Committee may determine that such shares shall be held for each Participant’s benefit by a broker designated by the Committee.  Shares may be registered in the name of the Participant or jointly in the name of the Participant and his or her spouse as joint tenants with right of survivorship or as community property.

 

(f)                                    Unused Cash Balances.  An amount remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional share shall be carried over in the Participant’s Plan Account to the next Offering Period or refunded to the Participant in cash, without interest, if his or her participation is not continued.  Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsection (c) or (d) above, Section 9(b) or Section 14(a) shall be refunded to the Participant in cash, without interest.

 

(g)                                 Stockholder Approval.  The Plan shall be submitted to the stockholders of the Company for their approval within twelve (12) months after the date the Plan is adopted by the Board. Any other provision of the Plan notwithstanding, no shares of Stock shall be purchased under the Plan unless and until the Company’s stockholders have approved the adoption of the Plan.

 

SECTION 9                                   Limitations On Stock Ownership.

 

(a)                                  Five Percent Limit.  Any other provision of the Plan notwithstanding, no Participant shall be granted a right to purchase Stock under the Plan if such Participant, immediately after his or her election to purchase such Stock, would own stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any parent or Subsidiary of the Company.  For purposes of this Subsection (a), the following rules shall apply:

 

(i)                                     Ownership of stock shall be determined after applying the attribution rules of section 424(d) of the Code;

 

(ii)                                  Each Participant shall be deemed to own any stock that he or she has a right or option to purchase under this or any other plan; and

 

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(iii)                               Each Participant shall be deemed to have the right to purchase up to the maximum number of shares of Stock that may be purchased by a Participant under this Plan under the individual limit specified pursuant to Section 8(c) with respect to each Offering Period.

 

(b)                                 Dollar Limit.  Any other provision of the Plan notwithstanding, no Participant shall accrue the right to purchase Stock at a rate which exceeds $25,000 of Fair Market Value of such Stock per calendar year (under this Plan and all other employee stock purchase plans of the Company or any parent or Subsidiary of the Company), determined in accordance with the provisions of section 423(b)(8) of the Code and applicable Treasury Regulations promulgated thereunder.

 

For purposes of this Subsection (b), the Fair Market Value of Stock shall be determined as of the beginning of the Offering Period in which such Stock is purchased.  Employee stock purchase plans not described in section 423 of the Code shall be disregarded.  If a Participant is precluded by this Subsection (b) from purchasing additional Stock under the Plan, then his or her employee contributions shall automatically be discontinued and shall resume at the beginning of the earliest Offering Period ending in the next calendar year (if he or she then is an Eligible Employee).

 

SECTION 10                             Rights Not Transferable.

 

The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to which he or she may be entitled under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of law, or in any other manner other than by the laws of descent and distribution.  If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interest under the Plan, other than by the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 6(a).

 

SECTION 11                             No Rights As An Employee

 

Nothing in the Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her employment at any time and for any reason, with or without cause.

 

SECTION 12                             No Rights As A Stockholder.

 

A Participant shall have no rights as a stockholder with respect to any shares of Stock that he or she may have a right to purchase under the Plan until such shares have been purchased on the applicable Purchase Date.

 

SECTION 13                             Securities Law Requirements.

 

Shares of Stock shall not be issued under the Plan unless the issuance and delivery of such shares comply with (or are exempt from) all applicable requirements of law, including

 

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(without limitation) the Securities Act of 1933, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded.

 

SECTION 14                             Stock Offered Under The Plan.

 

(a)                                  Authorized Shares.  The maximum aggregate number of shares of Stock available for purchase under the Plan is 1,250,000 shares.   The aggregate number of shares available for purchase under the Plan shall at all times be subject to adjustment pursuant to Section 14.

 

(b)                                 Antidilution Adjustments.  The aggregate number of shares of Stock offered under the Plan, the individual and aggregate Participant share limitations described in Section 8(c) and the price of shares that any Participant has elected to purchase shall be adjusted proportionately by the Committee in the event of any change in the number of issued shares of Stock (or issuance of shares other than Common Stock) by reason of any forward or reverse share split, subdivision or consolidation, or share dividend or bonus issue, recapitalization, reclassification, merger, amalgamation, consolidation, split-up, spin-off, reorganization, combination, exchange of shares of Stock, the issuance of warrants or other rights to purchase shares of Stock or other securities, or any other change in corporate structure or in the event of any extraordinary distribution (whether in the form of cash, shares of Stock, other securities or other property).

 

(c)                                  Reorganizations.  Any other provision of the Plan notwithstanding, immediately prior to the effective time of a Corporate Reorganization, the Offering Period then in progress shall terminate and shares shall be purchased pursuant to Section 8, unless the Plan is assumed by the surviving corporation or its parent corporation pursuant to the plan of merger or consolidation.  The Plan shall in no event be construed to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or other reorganization.

 

SECTION 15                             Amendment Or Discontinuance.

 

The Board (or any committee thereof to which it delegates such authority) shall have the right to amend, suspend or terminate the Plan at any time and without notice. Upon any such amendment, suspension or termination of the Plan during an Offering Period, the Board (or any committee thereof to which it delegates such authority) may in its discretion determine that the applicable Offering shall immediately terminate and that all amounts in the Participant Accounts shall be carried forward into a payroll deduction account for each Participant under a successor plan, if any, or promptly refunded to each Participant.  Except as provided in Section 14, any increase in the aggregate number of shares of Stock to be issued under the Plan shall be subject to approval by a vote of the stockholders of the Company.  In addition, any other amendment of the Plan shall be subject to approval by a vote of the stockholders of the Company to the extent required by an applicable law or regulation. This Plan shall continue until the earlier to occur of (a) termination of this Plan pursuant to this Section 15 or (b) issuance of all of the shares of Stock reserved for issuance under this Plan.

 

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SECTION 16                             Execution.

 

To record the adoption of the Plan by the Board, the Company has caused its authorized officer to execute the same.

 

	
 
    	
GENOMIC HEALTH, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

10Exhibit 10.1

 

AMENDED MASTER TEAMING AND NON-COMPETE AGREEMENT

 

This AMENDED MASTER TEAMING AND NON-COMPETE AGREEMENT (the “Agreement”) is made and entered into as of this 25th day of July, 2011 (the “Effective Date”), by and between PUBLIC CONSULTING GROUP, INC., a Massachusetts corporation (“PCG”), and HEALTH MANAGEMENT SYSTEMS, INC, (“HMS”), a New York corporation.  Each of PCG and HMS are sometimes referred to herein individually as a “Party” and together as the “Parties.”  Terms used herein that are not otherwise defined herein shall have the respective meanings assigned to them in the Asset Purchase Agreement between PCG and HMS Holdings, Corp. dated June 22, 2006, where such terms are therein defined.

 

WHEREAS, the Parties previously executed a Master Teaming Agreement and a Non-Compete Agreement effective  September 13, 2006, and mutually desire to amend and extend certain provisions of those Agreements; and

 

WHEREAS, the Parties have determined that they would each benefit from continued cooperation between their respective organizations, in order to provide a complimentary approach on potential new business opportunities in response to requests for proposals and procurements or other requests issued by the federal government, various states, counties, other political subdivisions, and/or other entities (each an “RFP”); and

 

WHEREAS, the Parties have determined that in certain situations each would benefit from the joint preparation and submission of proposals and responses (“Responses”) to RFPs which offer the best combination of resources and skills of the respective Parties, and which would be in the best interests of the prospective client.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, and for such other consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

1.             Exclusivity and Cooperative Cross-selling of Services.

 

1.1           PCG agrees to utilize HMS as its exclusive subcontractor with respect to the provision of services described in Exhibit A hereto (the ‘‘HMS Services”), the entirety of which Exhibit is hereby incorporated herein by reference.  PCG shall not, during the term of this Agreement, develop, market (including by developing partnerships with other entities), offer, or sell services of the kind identified as HMS Services in any market, except as specifically provided or permitted by this Agreement. PCG further agrees to use its commercially reasonable efforts to identify cross-selling opportunities consistent with Section 6 hereof, including, but not limited to, introducing HMS employees, agents, or consultants (“HMS Representatives”) to PCG clients existing as of the date hereof or at any time during the term of this Agreement (collectively, the “PCG Clients”) in order to provide an opportunity for such HMS Representatives to market and sell the HMS Services to the PCG Clients.  PCG will promptly notify HMS of all RFPs of which PCG becomes aware that call for, or provide an opportunity to include, any HMS Services

 

 

1.2           HMS agrees to utilize PCG as its exclusive subcontractor with respect to the provision of services described in Exhibit B hereto (the “PCG Services”), “), the entirety of which Exhibit is hereby incorporated herein by reference.  HMS shall not, during the term of this Agreement, develop, market (including by developing partnerships with other entities), offer, or sell services of the kind identified as the PCG Services, except as specifically provided or permitted by this Agreement.  HMS further agrees to use its commercially reasonable efforts to identify cross-selling opportunities consistent with Section 5 hereof, including, but not limited to, introducing PCG employees, agents, or consultants (“PCG Representatives”) to HMS clients existing as of the date hereof or at any time during the term of this Agreement (collectively, the “HMS Clients”) in order to provide an opportunity for such PCG Representatives to market and sell the PCG Services to the HMS Clients.  HMS will promptly notify PCG of all RFPs of which HMS becomes aware that call for, or provide an opportunity to include, any PCG Services.

 

1.3           In the event that the Party with a Client Contract (the “Originating Party”) subcontracts with the other Party (the “Secondary Party”) to deliver Services under such Client Contract, the Parties shall enter into a Subcontracting Agreement (as defined below) pursuant to which the Originating Party will serve as the Prime Contractor (as defined below) and the Secondary Party shall serve as the Subcontractor (as defined below).  The Prime Contractor will provide client contract management functions, such as invoicing and reporting, as more fully articulated in the applicable Subcontracting Agreement.   Notwithstanding the foregoing,  to the extent the crossselling efforts of either of the Parties results in a Client of either Party issuing an RFP related to Services described in either Exhibit A or Exhibit B to this Agreement, Section 2 shall apply, and the Parties shall determine whether to bid jointly on such RFP.

 

1.4           Each Party represents and certifies that it is eligible to perform Services under government contracts and that it shall not take any action or fail to take appropriate action that would jeopardize such eligibility.  If either Party becomes ineligible to bid on or perform a government contract, such Party shall promptly notify the other Party, in writing, of such ineligibility.

 

1.5           Each Party and any of its affiliates shall fully disclose to the other Party any known conflict or potential conflict to the business interest of the other Party resulting from this Agreement or under a particular Sub-Teaming Agreement (as defined below) or Subcontracting Agreement.

 

1.6           Notwithstanding any other provision of this Agreement, the provisions of the Supplementary RAC Contract Teaming and Confidentiality Agreement, attached hereto as Attachment I and incorporated by reference herein, shall govern the relationship between and the rights and obligations of the Parties with respect to Medicaid Recovery Audit Contractor (“Medicaid RAC”) contracts and services.

 

1.7           In the event that, during the term of this Agreement, either Party acquires, is acquired by, or merges with another corporate entity that is engaged in the business of

 

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furnishing  services of the type that is associated with the other Party in the documents attached hereto as Exhibit A or B, the Parties shall, within no less than 10 days prior to the effective date of such acquisition or merger, confer to determine whether and to what degree the terms of this Agreement should, or may need to, be modified in light of the acquisition or merger, and whether such merger or acquisition affects the desires or intentions of the Parties with respect to continued performance of their obligations under the Agreement.  The Parties further agree that neither Party shall assert or claim a breach of this Agreement by reason of continuation after merger or acquisition of pre-existing business operations and/or service product offerings of an entity that has acquired, been acquired by, or merged with the other Party subsequent to execution of this Agreement; but that, at the option of the Party that has not been involved in such acquisition or merger, the Agreement may be terminated pursuant to Section 12.1 (d) herein.

 

2.             Sub-Teaming.

 

2.1           The Parties will determine within a reasonable time period following identification of a joint bidding opportunity consistent  with preparing and filing a timely Response (but in no event less than fifteen (15) calendar days from written communication by a Party of identification  of such joint bidding opportunity) whether to bid jointly on any particular RFP.  In the event that the Parties agree to bid jointly on any such RFPs, the Parties will enter into separate teaming agreements  related thereto, which teaming agreements shall incorporate the terms and conditions  set forth in this Section  2 and Sections 3, 4 and 7 hereof (each a “Sub Teaming Agreement”).  Notwithstanding anything to the contrary herein, neither Party shall be obligated to bid jointly with the other in connection with any particular RFP (except as may be required under the Supplementary Teaming Agreement for RAC Services attached hereto as Attachment A, and incorporated by reference herein); and, except as otherwise set forth herein, each Party shall have the right to bid jointly or enter into separate teaming agreements with third-parties.

 

2.2           Each Sub-Teaming Agreement shall set forth the scope and range of Services to be covered by such Sub-Teaming Agreement, the dates and sites for performance of the Services and such other information the Parties deem necessary and appropriate.  The Sub-Teaming Agreement shall also specify the specific milestones to be met by the Parties in responding to the RFP related to such Sub-Teaming Agreement, and the form and amount of consideration to be paid to the Subcontractor thereunder, if any.

 

2.3           With respect to each Sub-Teaming Agreement, the Parties shall specify one of the Parties to act as the prime contractor (the “Prime Contractor”) and the other to act as the subcontractor (the “Subcontractor”).  The Party designated as the Prime Contractor pursuant to a particular Sub-Teaming Agreement shall bear the primary responsibility for preparing and submitting any and all Responses.  The Prime Contractor shall fully disclose in any Response the role to be played, and the Services to be provided, by the Party designated to act as the subcontractor pursuant to a particular Sub-Teaming Agreement.  The Prime Contractor shall provide the Subcontractor with the opportunity to provide input with respect to the preparation and submission of any and all Responses, and the Subcontractor shall have the opportunity to review and revise any portions of such Responses that relate to such Subcontractor or the

 

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Services to be provided by such Subcontractor. The Prime Contractor shall keep the Subcontractor advised of changes in the requirements and the status of the Response.

 

2.4           Communication with Potential Clients.

 

(a)           The Prime Contractor shall be responsible for all communications with any potential client concerning the RFP, but shall consult with and keep the other Party reasonably well informed of such communications and negotiations.  The Subcontractor shall not initiate contact with any potential client concerning the RFP without the prior written consent of the Prime Contractor; provided, however, any communications initiated by such potential client or other party directly with the Subcontractor shall not be deemed to be a breach of this Agreement so long as the Subcontractor notifies the Prime Contractor of such communication.

 

(b)           In the event it becomes desirable for either Party to contact the potential client or any other party concerning the RFP prior to specification by the Parties of a Prime Contractor and Subcontractor with respect to thereto, the Parties shall designate a primary point of contact, and neither Party or its representatives shall contact such potential client or other party without the approval of the primary contact; provided, however, any communications initiated by such potential  client or other party directly  with PCG or HMS shall not be deemed to be a breach of this Agreement so long as such Party notifies the primary contact of such communication.

 

3.             Preparation of Responses.

 

3.1           The Parties shall use commercially reasonable efforts to prepare and submit a Response in connection with each RFP for which the Parties have entered into a Sub-Teaming Agreement.   The Parties agree to consult prior to submission of any Response concerning the portions of the Services to be performed by each Party.  In connection with the drafting and preparation of Responses, each Party shall provide all material and data pertinent to the Services to be provided by such Party and shall furnish qualified employees, agents, or consultants (“Personnel”) to assist therewith.  The Prime Contractor shall be responsible for preparing Responses, integrating the information provided by the Parties in connection therewith, and submitting such Responses to potential clients.  PCG and HMS shall assure availability of such Personnel including, but not limited to, management and technical personnel, to assist in any discussions and negotiations with potential clients concerning such Response.  If after receipt of the pricing information from PCG or HMS an adjustment is deemed necessary by the other Party to achieve price objectives conducive to award of the Prime Contract, the Parties shall cooperate in good faith to revise such pricing.

 

3.2           The Parties recognize that a potential client may amend an RFP and that revision of a Response may be necessary as a result thereof.  In such case, the Parties shall enter into good faith negotiations to revise the Response.  The Parties acknowledge that material modification(s) or change(s) to an RFP may result in a Party’s decision not to bid on the RFP under such circumstances. A Party may terminate its participation in a Response by providing five (5) calendar days’ notice thereof to the other Party.  Further, if the potential client, for any

 

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reason, directs the Prime Contractor to place the work contemplated as the Subcontractor’s responsibility  with another  provider, and such direction  is authorized  by applicable  laws and regulations,  the Prime Contractor shall comply  with such direction, and shall have no further obligations  to the Subcontractor under the particular Sub-Teaming Agreement, except as set forth in Section 7 (Proprietary Information), Section  8 (Indemnification), Section 9 (Insurance) and Section 10 (Non-solicitation of Employees).

 

4.             Award of Prime Contract; Subcontracting.

 

4.1           Except as otherwise set forth herein or in any particular Sub-Teaming Agreement or Subcontracting Agreement, each Party will bear all costs, risks and liabilities incurred by it arising out of its obligations and efforts under this Agreement or such Sub-Teaming Agreement or Subcontracting Agreement.  Neither Party shall have any right to any reimbursement, payment or compensation of any kind from the other.  Nothing herein shall be construed as providing for the sharing of profits or losses arising out of the efforts of either or both of the Parties, except specifically set forth in the applicable Sub-Teaming Agreement or Subcontracting Agreement.

 

4.2           Unless otherwise specified in a particular Subcontracting Agreement, the consideration payable to the Parties in connection  with any Subcontracting Agreement (“Teaming Fees”) related to a contract that provides for payment on a (i) contingency basis, the Prime Contractor will receive 20% and the Subcontractor will receive 80% of the fees paid by the client in connection  with the performance  of Services thereunder and (ii) fixed price basis, the Prime Contractor will receive 10% and the Subcontractor will receive 90% of the fees paid by the client in connection with the performance of Services thereunder.

 

5.             Additional Obligations of HMS

 

5.1           Assistance in marketing PCG enrollment services:

 

5.1.1        In the course of marketing cost containment services to entities in the employer market, including retiree health plans, HMS will make a concerted effort to encourage and develop interest on the part of such retiree health plans in Medicare, Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) enrollment services offered by PCG.  HMS will incorporate information about PCG enrollment services into HMS sales and marketing efforts, will introduce PCG to the target Client or Prospective Client once interest has been expressed or established, and will work with PCG to seek to include PCG enrollment services in any service contract with a retiree health plan that HMS may negotiate. HMS will work closely with PCG regarding PCG’s fee and price offerings to potential clients.

 

5.1.2        HMS will establish a marketing plan to implement the foregoing provision of this Agreement by no later than September 30, 2011.

 

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5.2           Use of HMS contract relationships to introduce PCG services:

 

5.2.1        HMS will designate five States (to be agreed upon between appropriate officials or representatives of the Parties) that currently have contracts with HMS (“the Opportunity States”), to which HMS agrees to introduce PCG and its service offerings as described in this subsection.

 

5.2.2        Introduction of PCG services to or in the Opportunity States shall consist of the following processes or steps:

 

(a)           HMS and PCG will confer and develop an agreed-upon strategy for introducing PCG services to the target State agency, including by identifying key selling points, the critical State decision-maker[s] who need to be reached, and other tasks or goals that are integral to HMS’s fulfillment of its obligations to facilitate and implement the introduction process.

 

(b)           HMS representatives will speak directly to the target Client to seek agreement that the existing HMS contract can be used as a vehicle, through appropriate amendment or otherwise, for procurement and delivery of services to include the designated PCG services.

 

(c)           Upon determination that the contracting agency of the Opportunity State desires and approves inclusion of the designated PCG services in the HMS contract, and that the anticipated arrangement complies with applicable State procurement laws, HMS will include PCG as a subcontractor under the HMS contract with such State agency.

 

(d)           HMS will create and maintain appropriate documentation of its efforts in compliance with this subsection, in the form of emails, memoranda, or other writings, in paper or electronic form.

 

6.             Additional Responsibilities and Obligations of PCG

 

6.1           PCG agrees that, notwithstanding the obligations of HMS described in the foregoing section, PCG is ultimately responsible for finding a willing State purchaser of its services among the Opportunity States and persuading the relevant State agency to agree to procure those services, including by persuading the relevant decision-maker to procure the PCG services through the HMS contract.

 

6.2           Where HMS seeks to have its services introduced to and procured by an entity with which PCG has a contract, PCG shall have the same obligations with respect to facilitating that opportunity for HMS as are described above in section 5.2 as obligations of HMS to promote procurement and purchase of PCG services.

 

7.             Proprietary Information.

 

7.1           Unless otherwise subject to a separate nondisclosure agreement  which shall remain in effect during the term of this Agreement, in the course of performance  under this

 

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Agreement, the Parties may disclose to each other Proprietary  Information.  For purposes hereof, “Proprietary Information” of a Party is defined as all information, data, material and documentation of such Party, whether disclosed  to or accessed  by the other Party in connection with this Agreement, including, without limitation, (a) all information of such Party or its respective clients, suppliers, contractors and other third parties doing business  with it, (b) the terms of this Agreement  and (c) any information  developed  by reference to or use of such Party’s Proprietary Information.  All such Proprietary Information disclosed under this Agreement shall remain the property of, and be deemed proprietary to, the disclosing Party.  Oral information shall not be subject to any nondisclosure obligation under this Agreement unless that oral information (or a reasonable description or summary of the contents of the oral information) is reduced to writing within five (5) business days after disclosure.  Each Party agrees to keep all Proprietary Information of the other in strict confidence, and to use the same, but no less than a reasonable, degree of care to protect such information as it uses to protect its own Proprietary Information.  Disclosure of Proprietary Information shall be restricted to those persons who are directly participating in the preparation of Responses and/or the provision of Services identified in the Sub-Teaming Agreement or Subcontracting Agreement, each of whom shall be under the nondisclosure requirements of this Section 7.1 (with each party responsible for the compliance of such persons), and such Proprietary Information shall be used solely and exclusively in support thereof.

 

7.2           The obligation of a receiving Party to protect and or refrain from use of Proprietary  Information of the other Party shall not apply to any of the following:  (a) information  that has been or is made available to the public by the disclosing Party or by a third Party not under a similar obligation of confidentiality; (b) information  which becomes lawfully known or available to the receiving  Party from a source other than the disclosing Party; (c) information  which is known to the receiving Party independently of the disclosing  Party; (d) information  that was independently developed  by the receiving  Party; nor shall a receiving Party’s obligation to protect the other Party’s Proprietary Information from disclosure apply where that  information is  required to be disclosed  by  legal mandate, legal process, a legal action, or other legal requirement  under government regulations or an investigatory subpoena,  provided, however, that the receiving  Party shall give the disclosing  Party notice of the legal request and take reasonable and lawful action to avoid or minimize the degree of such disclosure.

 

7.3           The receiving Party shall return or destroy the disclosing Party’s Proprietary Information, including all copies thereof, as directed by the disclosing Party. The disclosing Party may request written certification of destruction.

 

7.4           Each Party acknowledges that the other Party may suffer irreparable injury as a result of any misuse, disclosure or duplication of its Proprietary Information by the other Party in violation of this clause. Accordingly, the injured Party shall be entitled in such event to seek injunctive relief in addition to any other applicable remedies, including the recovery of damages.

 

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7.5           Neither Party shall use Proprietary Information received from the other Party pursuant to this Agreement, or in the course of activities to which this Agreement or its Attachment I pertains, for any purpose other than those specifically described or contemplated by this Agreement and/or its Attachment I; nor shall any Party use the Proprietary Information of the other Party for any product development or other commercial purpose that is not mutually beneficial to both Parties and known to and expressly approved by the disclosing Party.

 

7.6            Nothing in this Agreement shall be deemed to grant or confer any right, title, or interest in a Party’s Proprietary Information or other intellectual property to the other Party.  The rights to intellectual property under this Agreement or any Sub-Teaming Agreement or Subcontracting Agreement shall be determined according to United States Law, and the ownership of such intellectual property shall follow the inventor status of the originator of said property.  Each Party shall cooperate with the other to enable it to perfect its patent rights.

 

7.7            The foregoing rights, obligations and restrictions as to Proprietary Information shall survive the expiration or termination of this Agreement for a period of five (5) years.

 

8.             Indemnification.

 

8.1           HMS hereby agrees to indemnify, defend and hold PCG and its affiliates and their respective employees, shareholders, officers, directors, agents and consultants, and the successors, heirs, and assigns of each of them harmless from and against any loss, damages, action, suit, claim, demand, liability, expense, or damage (each a “Loss”) that may be brought, instituted  or arise against or be incurred by such persons in connection  with any claims, suits, actions, demands or judgments arising out of any act or omission,  or failure by HMS in performing or failing to perform any of its obligations under this Agreement, a particular Subcontracting Agreement or Sub-Teaming Agreement or under any terms or conditions  of a Prime Contract applicable to HMS.

 

8.2           PCG hereby agrees to indemnify, defend and hold HMS and its affiliates and their respective employees, shareholders, officers, directors, agents and consultants, and the successors, heirs, and assigns of each of them harmless from and against  any Loss that may be brought, instituted or arise against or be incurred  by such persons in connection with any claims, suits, actions, demands or judgments arising out of any act or omission, or failure by PCG in performing or failing to perform any of its obligations under this Agreement, a particular Subcontracting Agreement  or Sub-Teaming Agreement  or under any terms or conditions of a Prime Contract applicable to PCG.

 

8.3           The foregoing rights, obligations and restrictions shall survive the expiration or termination of this Agreement for a period of five (5) years.

 

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9.             Insurance.  During the term of this Agreement and for a period of two (2) years after its expiration or termination for any reason, each of the Parties shall secure and maintain an insurance policy or insurance policies with appropriate limits in place, necessary to meet the requirements of such Party under any new contract, RFP or other procurement opportunity.

 

10.           Nonsolicitation of Employees.  The Parties agree not to knowingly solicit, recruit, hire or otherwise employ or retain the employees of the other Party during the Term of this Agreement and for a period of five (5) years following the termination or expiration of this Agreement without the prior written consent of the other Party.  Notwithstanding anything above to the contrary, this Section 10 shall not restrict the right of each Party to solicit or recruit generally in the media, and shall not prohibit each Party from hiring, without prior written consent, another Party’s employee who answers any advertisement or who otherwise voluntarily applies for hire without having been personally solicited or recruited by the hiring Party.

 

11.           Term.  This Agreement shall begin as of the Effective Date and shall continue in full force and effect for a period through September 30, 2012, unless extended by mutual agreement of the Parties or earlier terminated in accordance with Section 10 below.

 

12.           Termination.

 

12.1         Either Party may terminate this Agreement by providing sixty (60) calendar days prior written notice to the other Party if:

 

(a)           the other Party materially breaches  this Agreement, which material breach remains uncured for such sixty (60) day period;

 

(b)           the other Party experiences substantial  financial difficulties including, but not limited to, its inability to pay salaries and benefits to its employees, which, in the sole opinion of the terminating  Party, makes another Party’s ability to perform a Prime Contract, Subcontracting Agreement or Subcontracting Agreement highly unlikely  under the terms of this Agreement; or

 

(c)           the other Party becomes insolvent, makes a general assignment  for the benefit of creditors, suffers or permits the appointment  of a receiver for its business or assets, becomes subject to any proceeding  under any bankruptcy  or insolvency law, or has liquidated its business (voluntarily or otherwise).

 

(d)           the other Party acquires, is acquired by, or merges with another corporate entity whose business operations or service product offerings prior to such acquisition or merger include services identified as exclusive to the terminating Party on Exhibit A or B hereto, the non-terminating Party represents that those operations or service offerings will continue post-acquisition or post-merger (or is unwilling or unable to give assurances that such operations or service offerings will be discontinued), and the Parties have been unable to reach agreement regarding an appropriate modification of the Agreement pursuant to Section 1.7 herein.

 

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12.2         Either Party may terminate its participation in a particular Sub-Teaming Agreement by delivering prior written notice to the other Party:

 

(a)           as provided in the particular Sub-Teaming Agreement;

 

(b)           as contemplated by Section 3.2 hereof; or

 

(c)           if the Parties, after negotiating  in good faith, are unable to reach agreement on the terms and conditions of a Subcontracting Agreement pursuant to such Sub-Teaming Agreement within sixty (60) days from award of the contract to the Prime Contractor,  unless a further extension is mutually agreed to by the Parties.

 

13.           Limitation of Liability.  Neither party shall be liable to the other for any indirect, incidental, special, punitive or consequential damages  arising  out of the performance or failure to perform in accordance with the terms hereof,  including, without limitation, lost profits, lost revenues, loss of the use of equipment or facilities, or for substitute equipment or facilities, regardless of whether the claim or claims therefore found in contract or tort (including negligence), strict liability or otherwise and regardless of whether  the party to be charged has been notified of the possibility or should have foreseen the possibility of such damages.

 

14.           Assignment.  This Agreement shall be binding upon, and inure to the benefit of, and be enforceable by, the respective successors and assigns of the Parties; provided, however, that no Party shall assign or otherwise transfer this Agreement or any rights, duties or obligations under this Agreement without the prior written consent of the other Party.  The obligations of each Party shall not terminate upon any assignment attempted without such prior written consent.

 

Notwithstanding the foregoing, each Party may assign its rights and obligations under this Agreement to a parent, affiliate or subsidiary.

 

15.           Independent Party Status.  Neither this Agreement  nor any particular Sub-Teaming Agreement or Subcontracting Agreement shall constitute, create, give effect to or otherwise imply a joint venture, partnership, relationship of agency or formal business organization of any kind, other than a contractor  team arrangement, and the rights and obligations of the Parties shall be only those expressly set forth herein.  The Parties shall be deemed to be independent contractors, and the employees of one Party shall not be deemed to be the employees of the other Party.  Each Party shall be solely responsible for payment of all compensation owed to its employees and other personnel, including payment of any taxes related to employment and workers compensation insurance.  Neither Party shall have authority to bind the other except to the extent authorized herein or in a particular Sub-Teaming Agreement or Subcontracting Agreement.

 

16.           Notices.  All notices which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient in all respects if given in writing and (a) delivered  personally, (b) mailed by certified or registered mail, return receipt requested and postage prepaid, (c) sent via a nationally  recognized overnight courier, or (d) sent via facsimile confirmed in writing to the recipient, in each case as follows:

 

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If to PCG, to:

 

Public Consulting Group, Inc. 

148 State Street, 10th floor 

Boston, Massachusetts 02109

Attention:  William S. Mosakowski

Telecopy No.: (617) 426-4632

 

If to HMS, to:

 

Health Management Systems, Inc.

401 Park Avenue South

New York, New York 10016

Attention: William Lucia

Telecopy No.: (212) 857-5004

 

or such other address or addresses as the Parties shall have designated  by notice in writing.

 

17.           Publicity.  Each Party may issue a news release, public announcement, advertisement or any other form of publicity concerning its efforts or performance under this Agreement, unless specifically precluded by the terms of any new client contract or Prime Contract or otherwise, and provided that such publicity shall give full credit and recognition to the role and contribution of both Parties.

 

18.           Waiver.  This Agreement shall not be amended or modified, nor shall any waiver or any right hereunder be effective, unless set forth in a document executed by duly authorized representatives of each Party.  The waiver of any breach of any term, covenant, or condition, herein contained, shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same.

 

19.           Severability.  If any part, term or provision of this Agreement shall be held void, illegal, unenforceable,  or in conflict with any law of any federal, state, or local government having jurisdiction over this Agreement,  the validity of the remaining  portions or provisions shall not be affected  thereby.

 

20.           Compliance with all Laws.  In the course of performance hereunder, the Parties shall agree to comply with all applicable local, state, and federal laws and regulations.

 

21.           Governing Law.  This agreement shall be governed  in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to conflict of law principles

 

22.           Force Majeure.  If and to the extent that a Party’s performance of any of its obligations pursuant to this Agreement is prevented, hindered or delayed by fire, flood, earthquake, elements of nature or acts of God, acts of war, terrorism,  riots, strikes, unavailability or shortages of labor, civil disorders,  rebellions  or revolutions, or any other similar cause beyond the reasonable control of such Party (each, a “Force  Majeure Event”), then the non-performing, hindered or

 

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delayed Party shall be excused  for such non-performance, hindrance or delay, as applicable, of those obligations  affected  by the Force Majeure Event for as long as such Force Majeure Event continues  and such Party continues  to use its best efforts to recommence performance  whenever and to whatever extent  possible without delay, including  through the use of alternate sources, workaround  plans or other means.  The Party whose performance is prevented, hindered or delayed by a Force Majeure Event shall promptly notify the other Party of the occurrence of the Force Majeure Event and describe in reasonable detail the nature of the Force Majeure Event.

 

23.           Entire Agreement; Modifications.  This Agreement, including  each Attachment or Exhibit hereto and thereto constitute the entire understanding  and agreement  between the Parties and shall supersede any prior agreements, written or oral, not incorporated herein relating to the same subject matter. The terms and conditions of this Agreement shall not be amended except by written agreement signed by both Parties.

 

IN WITNESS WHEREOF, this Master Teaming Agreement has been duly executed and delivered by the duly authorized officers of the Parties hereto as of the Effective Date.

 

 

	
 
    	
HEALTH MANAGEMENT SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:   July 26, 2011
    	
By:
    	
/s/   William C. Lucia
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   William C. Lucia
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PUBLIC CONSULTING GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:   July 25, 2011
    	
By:
    	
/s/   Stephen Skinner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Stephen Skinner
    
	
 
    	
Title:   Director of Public Consulting Group
    

 

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EXHIBIT A

 

HMS SERVICES

 

HMS shall have the exclusive right, as between itself and PCG, to (a) market the services listed below in the following markets in the United States: State Medicaid agencies, managed care plans, Medicaid financed State pharmacy assistance programs, the U.S. Department of Veterans Affairs, TriCare, CHIP, the Assistance Program administered under Title IV-D of the Social Security Act, MSE programs, commercial insurance plans, and Medicare Advantage plans; and (b) market dependent eligibility verification audit services to markets that include state employee benefit programs:

 

1.           Coordination of benefits- including the identification of health insurance coverage or third party liability related to specific individuals for cost avoidance and/or recovery purposes, and recovery from providers and liable health insurance payers via billing, recoupment and/or settlement.

 

2.           Credit balance audits (defined to include any audit of overpayments related to Coordination of benefits, duplicates, provider posting errors, or allowances) of health care providers, without limitation as to types of providers.

 

3.           Accident-related trauma/workers’ compensation/estates recovery

 

4.           Medical support enforcement.

 

5.           HIPP

 

6.           Medicare Buy-in

 

7.           Dependent Eligibility Audits.

 

The Parties agree that HMS’s market exclusivity for COB services to managed care organizations (MCOs) does not preclude PCG from contracting with MCOs to plan, develop, design, implement and/or execute projects related to Health Information Exchange and/or Health Information Technology Development and Implementation, and further does not preclude PCG from contracting with MCOs to help plan for, develop, implement and/or execute projects related to Federal health care reform initiatives under way or to be promulgated.

 

 

EXHIBIT B

 

PCG SERVICES

 

PCG shall have the exclusive right, as between itself and HMS, to market and offer the following services to all markets:

 

1.     Pre/post payment provider audits for long term care provider types and services including:

 

·      Nursing facilities, except that HMS’s cost of care and credit balance initiatives are excluded from PCG’s nursing facility audit responsibilities, as provided in Exhibit C

·      Intermediate care facilities for the mentally retarded (ICFMRs)

·      Non-acute or inpatient chronic and rehab hospitals

·      Inpatient psychiatric hospital

·      Outpatient psychiatric hospital/treatment facility

·      Community mental health centers

·      Community health centers

·      Psychologist services

·      Home based mental health services

·      Substance abuse services

·      Home health services

·      Personal care support services

·      Partial hospitalization

·      Adult day health services

·      Adult foster care services

·      Day habilitation services

·      Psychiatric day treatment services

·      Respite services

·      Chronic and LTC services

·      Private duty nursing services

 

The above-described audit services designated as exclusive to PCG do not include credit balance audit services (as defined above) or specialty pharmacy service audits relating to claims billed via NCPDP, and are limited to the audits of the following types:

 

·      Cost Reports/Financial Statements

·      Free/Charity Care Payment Compliance Audits

·      Payer/Provider Performance Audits

·      Cost Allocation Plans

·      Specialty Pharmacy Performance Review relating to claims billed via UB or 1500

 

 

2.     Eligibility/Member Services including

 

i.              SSI/SSDI/Medicare enrollment

ii.             Low Income Subsidy (LIS) Determination

 

3.     Public provider billing services (ASO)

 

4.     Public Provider Cost report preparation and audit support, on behalf of the provider

 

 

EXHIBIT C

 

Exceptions to Market Exclusivity

 

The following services may be marketed, offered, and furnished by HMS and PCG respectively, without being deemed a violation of the market exclusivity provisions of the Amended Master Teaming and Non-compete Agreement:

 

By HMS

 

1.     Specific existing projects otherwise in a category designated as exclusive to PCG:

a.     Services under the VA Behavioral Health Project

b.     Services under the DC Medicare enrollment project (with DECO)

c.     Connecticut Home Health (opportunity in development with client)

d.     New Jersey Behavioral Health & Home Health related predictive modeling project with Digital Harbor

e.     HMS may also continue to offer any audit services to an existing client that are required to be provided to that client under a contract existing as of July 1, 2011.

 

2.     Services which may involve PCG-exclusive provider settings, but are intended by the Parties to be in an “open market” category, with respect to which either Party may develop, market, offer, and/or sell its services:

 

a.     Fixed Fee Utilization Review Services for Current Clients, being performed and/or marketed by HMS as of the date of execution of the Agreement.  (Scope of such work may include, when applicable, PCG Exclusive Provider types such as Inpatient and Outpatient Psychiatric facilities and treatment providers.)

 

b.     Services of a kind performed for and marketed to federal agencies by a subsidiary of HMS’s parent company, including but not limited to fraud, waste and abuse detection and program integrity services, which involve or may involve auditing of Long Term Care facilities.  The Parties agree that these services may be marketed, offered, and furnished by HMS’s parent company or its subsidiary without violating this agreement.

 

3.     The Parties further agree that ancillary services provided in PCG designated provider settings (e.g., PBM audits for behavioral health) shall not be regarded as included in the PCG Services, but represent open market opportunities that may be accessed by HMS consistent with this Agreement.

 

 

By PCG:

 

1.     Specific existing projects otherwise in a category designated as exclusive to HMS:

 

a.     Services under Dependent Eligibility Audit Projects (DEVA) existing at the time of execution of the Agreement.

b.     Services under any DEVA project resulting from procurements that are either active or had been offered and/or bid but not awarded as of July 1, 2011 (to include services under contracts with the City of Charlotte and Clark County, NV)

c.     Services to the State of Wisconsin in connection with a DEVA project in that State (if this opportunity emerges), whether pursuant to an existing contract or through a new procurement subsequent to execution of this Agreement.

d.     [New procurement through a PCG Partner — not able to be named at document execution due to confidentiality provisions with the referenced Partner; to be named/identified later]

 

In addition, the Parties, recognizing that both HMS and PCG have exclusive service rights within the Long Term Care space, HMS and PCG agree to the following provisions with regard to the Long Term Care Space:

 

I.              Each Company markets its exclusive audit types.

II.            Audit types that fall outside the exclusive audit types defined herein can be offered by either Company, i.e., are considered ‘open market’ (Example: PBM audits).

III.           If either Company, in marketing independently its exclusive or open market services, identifies the need for a partner to market a particular solution, the other Company is to be considered as a potential partner and has the right of first refusal for a partnership arrangement.  In being offered first refusal rights, each Company will exercise reason in the response; i.e., if the service is not a genuine capability of the Company, the Company will pass.

IV.           Audits relating to Client policy/reimbursement changes or MMIS adjudication errors are exceptions to HMS market exclusivity.

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