Document:

exv10w19

 

EXHIBIT 10.19

Agreement Number#______

SXC Health Solutions Corp.

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT dated the ____ day of                     , _____

BETWEEN:

SXC Health Solutions Corp., 

a corporation incorporated under the laws of Canada,

(hereinafter called the “Corporation”)

— and —

Name of

(hereinafter called the “Optionee”),

as follows:

	1)	 	Pursuant to the Stock Option Plan of the Corporation, as amended from time to time (the
“Plan”), the Corporation hereby grants to the Optionee on the date hereof (the “Grant Date”)
the option (the “Option”) to purchase up to
_________ common shares (the “Common Shares”) of
the authorized and unissued capital stock of the Corporation, as presently constituted, for
cash, at a price of US$_________ per Common Share, upon the terms and conditions set out
herein. The Option is not intended to qualify as an incentive stock option within the meaning
of Section 422(b) of the United States Internal Revenue Code of 1986, as amended (the “Code”),
and the provisions hereof shall be construed consistent with that intent.

	 	a)	 	Date of Exercise. On the first, second, third and fourth anniversary of the Grant
Date, the Option shall become exercisable with respect to twenty-five percent (25%) of the
total number of Common Shares subject to the Option (computed in each case to the nearest
full share) (the “Exercisable Portion”), and all or any part of the Common Shares as to
which the Option shall have become exercisable may be purchased at any time, or from time
to time, thereafter, until expiration or termination of the Option.
	 
	 	b)	 	Expiry of Option. The Option shall expire with respect to each Exercisable Portion,
and all rights to purchase Common Shares comprising such
Exercisable Portion hereunder shall cease and become null and void, at 5:00 o’clock p.m.
(Toronto time) on the date which is five years after the Grant Date (the “Expiry Date”) or
upon the happening of certain events as hereinafter provided.
	 
	 	c)	 	Method of Exercise. The Option may only be exercised by the Optionee, or by the
person or persons entitled to exercise the same pursuant to the provisions of subparagraph
(f) below, on or prior to the Expiry Date, by: (i) the delivery to the Corporation at its
head office of written notice of election to exercise the same, 

 

 

	 	 	 	specifying the number of Common Shares with respect to which the Option is being exercised, and accompanied by
payment in full of the purchase price of the Common Shares then purchased by way of cash
or certified cheque in favour of the Corporation, or (ii) under the terms of the Company’s
cashless exercise program, which is subject to change, specifying the number of Common
Shares with respect to which the Option is being exercised and accompanied by payment in
full of any taxes required to be paid in connection with such cashless exercise.
Concurrently with its receipt of any such notice and payment, the Corporation shall issue
the Common Shares purchased by the Optionee. The Corporation may at its election require
that this Agreement be presented for appropriate endorsement upon any such exercise.

	 	d)	 	Compliance with Applicable Law. THE GRANTING OF THE OPTION AND THE ISSUANCE OF
COMMON SHARES UPON EXERCISE OF THE OPTION SHALL BE CARRIED OUT IN COMPLIANCE WITH
APPLICABLE STATUTES AND WITH REGULATIONS OF GOVERNMENTAL AUTHORITIES AND APPLICABLE STOCK
EXCHANGES AND SHALL BE CONDITIONAL UPON ALL NECESSARY APPROVALS, INCLUDING SHAREHOLDER
APPROVAL, BEING OBTAINED. IF THE FOREGOING CONDITION IS NOT SATISFIED, THIS AGREEMENT
SHALL BE VOID AND OF NO FORCE OR EFFECT AS OF THE DATE OF EXECUTION AND THE CORPORATION
AND THE OPTIONEE SHALL BE RELEASED FROM ANY AND ALL RIGHTS, BENEFITS, OBLIGATIONS AND
LIABILITIES HEREUNDER OR ARISING HEREFROM. The Optionee hereby acknowledges and
undertakes to comply, to the satisfaction of the Corporation and its counsel, with all
applicable requirements of any stock exchange or exchanges upon which any securities of
the Corporation may from time to time be listed and of any applicable securities
regulatory authorities. Such requirements may include the placing of legends on share
certificates restricting transfer of such Common Shares, the making of representations by
the Optionee that he or she is acquiring such Common Shares for investment and not with a
view to distribution, the filing of any required information or statements with the
aforesaid authorities and the making of arrangements with the Optionee’s
employer to withhold income taxes which may become payable under the Optionee’s exercise of
the Option under this Agreement.

	 	e)	 	Options Not Assignable. The Option shall not be transferable or assignable other
than by will or by the laws of descent and distribution.
	 
	 	f)	 	Exercise in the Event of Death or Termination of Employment. Subject to the
following provisions of this subparagraph 1(f) and to any express resolution passed by the
board of directors of the Corporation with respect to the Option, the Option and all
rights to purchase Common Shares pursuant hereto shall expire and terminate immediately
upon the Optionee ceasing to be an employee, officer or director of, or ceasing to
provide services to, the Corporation or an affiliate or subsidiary of the Corporation:

	 	i)	 	Exercise Upon Death: If the Optionee shall die (A) while an employee, officer
or director of or providing services to the Corporation, or of an affiliate or
subsidiary of the Corporation, or (B) within thirty (30) days after termination of the
Optionee’s employment, office or directorship with or service to the Corporation, or
an affiliate or subsidiary of the Corporation, in accordance with clause (ii) or (iii)
below, the Option may be exercised, to the extent that the Optionee shall have been
entitled to do so at the date of death, by the person or persons to whom the
Optionee’s rights under the 

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	 	 	 	Option pass by will or applicable law, or if no such
person has such right, by the Optionee’s executors or administrators at any time, or
from time to time, within twelve (12) months from the date when the Secretary of the
Corporation shall have given notice of this clause to the executors or administrators
of the Optionee following the Optionee’s death, but in no event later than the Expiry
Date.

	 	ii)	 	Exercise Upon Permanent Disability: If an Optionee’s (or, if the Optionee is
a personal holding company controlled by, or a registered retirement savings plan
established by, an officer, director, employee or service provider, then if such
person’s) employment, office or directorship with or services to the Corporation, or
an affiliate or subsidiary of the Corporation, shall terminate because of the
Optionee’s permanent disability, the Optionee may exercise the Option, to the extent
the Optionee may be entitled to at the date of the termination of the Optionee’s
employment, office, directorship or services, at any time, or from time to time,
within six (6) months of the date of the termination of the Optionee’s employment,
office, directorship or services, but in no event later than the Expiry Date.
	 
	 	iii)	 	Exercise Upon Resignation: If the Optionee’s (or, if the Optionee is a
personal holding company controlled by, or a registered retirement savings plan
established by, an officer, director, employee or service provider, then if such
person’s) employment, office or directorship with or services to the Corporation, or
an affiliate or subsidiary of the Corporation, shall terminate for any reason other
than the Optionee’s death or permanent disability or dismissal for cause, the Optionee
may exercise the Option, to the extent that the Optionee may be entitled to do so at
the date of the termination of the Optionee’s employment, office, directorship or
services, at any time or from time to time, within ninety (90) days of the date of
termination of the Optionee’s employment, office, directorship or services; but in no
event later than the Expiry Date.
	 
	 	iv)	 	Exercise Upon Termination for Cause: If the Optionee’s (or, if the Optionee
is a personal holding company controlled by, or a registered retirement savings plan
established by, an officer, director, employee or service provider, then if such
person’s) employment, office, directorship with or services to the Corporation, or an
affiliate or subsidiary of the Corporation, shall be terminated for cause, the
Optionee may exercise the Option, to the extent that the Optionee would be entitled to
do so at the date of the termination of his or her employment, office, directorship or
services, at any time or from time to time, within thirty (30) days of the date of
termination of the Optionee’s employment, office, directorship or services, but in no
event later than the Expiry Date.

	 	g)	 	Required Approvals. If at any time, the board of directors of the Corporation shall
determine, in its discretion, that the registration, qualification or other approval of or
in connection with the Plan or the Common Shares covered thereby is necessary or desirable
under any provincial, state, or federal law, then the Option may not be exercised, in
whole or in part, unless and until such registration, qualification or approval shall have
been obtained, free of any condition not acceptable to the board of directors of the
Corporation. The Optionee shall, to the extent applicable, cooperate with the Corporation
in relation thereto and shall have no claim or cause of action against the Corporation or
any of its officers, directors or 

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	 	 	 	shareholders as the result of any failure by the Corporation to take any steps to obtain
any such registration, qualification or approval.

	 	h)	 	Adjustment to Number of Shares. Subject to any rules under Section 409A of the Code
required to be applied to an Option in order for the Option to not constitute nonqualified
deferred compensation under such Section, and subject to any required approvals of
applicable regulatory authorities and stock exchanges, in the event of any change in the
Common Shares by reason of any stock dividend, recapitalization, merger, consolidation,
split-up, combination or exchange of shares, or rights offering to purchase
Common Shares at a price substantially below fair market value, or of any similar change
affecting the Common Shares, the number and kind of shares subject to the Option and the
purchase price per share thereof shall be appropriately adjusted consistent with such
change in such manner as the board of directors of the Corporation may deem equitable to
prevent substantial dilution or enlargement of the rights granted to, or available for, the
Optionee.

	 	i)	 	Liquidation. In the event the board of directors of the Corporation shall adopt a
plan of complete liquidation, the Option shall become immediately exercisable in full,
notwithstanding that it may have been initially granted on an installment basis.
	 
	 	j)	 	No Rights as Shareholder. The Optionee shall not have any rights as a shareholder
with respect to any Common Shares subject to the Option prior to the date of issuance to
the Optionee of a certificate or certificates for such Common Shares.
	 
	 	k)	 	Exercise of Option. No part of the Option may be exercised until the Optionee shall
have remained in the employ or as an officer or director of or provided services to the
Corporation, or of an affiliate or subsidiary of the Corporation, for a period of no less
than three (3) months after the date hereof.

	2)	 	Option and Employment. Nothing in this Agreement shall confer upon the Optionee any right
with respect to continuance of employment or as an officer or director with or service
provider to the Corporation, or any affiliate or subsidiary of the Corporation, nor shall it
interfere in any way with the right of the Corporation, or any affiliate or subsidiary of the
Corporation, by which the Optionee is employed or of which the Optionee is a director or
service provider to terminate the Optionee’s employment or directorship or services at any
time in accordance with applicable law.

	3)	 	Effect of Change of Control Transaction.

	 	a)	 	If a bona fide offer for common shares of the Corporation (whether by way of
take-over bid, plan of arrangement, amalgamation or similar transaction) is made to the
Optionee or to shareholders of the Corporation generally or to a class of shareholders of
the Corporation which includes the Optionee, and the offer, if accepted in whole or in
part by any person or persons, would result in the offeror (the “Offeror”), beneficially
owning a sufficient number of shares to control the Corporation within the meaning of
subsection 1(3) of the Securities Act (Ontario) (as amended from time to time) (a “Change
of Control Transaction”), then the Corporation shall immediately notify the Optionee with
full particulars thereof. In such circumstances, notwithstanding the provisions of
subsection 1(a) of this Agreement, the Option granted pursuant to this Agreement shall be exercisable immediately on a conditional
basis as hereinafter provided with respect to all of the Common Shares under the Option,
subject to completion of the Change of 

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	 	 	 	Control Transaction. If the Offeror completes the
Change of Control Transaction, the Corporation shall immediately notify the Optionee, and
any exercise of the Option by the Optionee pursuant to this subparagraph 3(a) will be
deemed to have been completed immediately prior to the completion of the Change of Control
Transaction. If the Change of Control Transaction is not completed for any reason, then
the Corporation will immediately notify the Optionee, and any exercise of the Option by the
Optionee pursuant to this subparagraph 3(a) will be deemed to be cancelled and void, the
Corporation will immediately return to the Optionee the payment which accompanied the
Optionee’s exercise of the Option pursuant to this subparagraph 3(a), and the Option will
again be exercisable only to the extent otherwise provided by this agreement.

	 	b)	 	If the Offeror will complete the purchase contemplated by the Change of Control
Transaction only if the Offeror acquires all of the issued and outstanding Common Shares
of the Corporation subject to the Change of Control Transaction, the Corporation shall be
entitled to deliver written notice (a “Compulsory Sale Notice”) to the Optionee within 10
days following the making of the Change of Control Transaction, stating that the Optionee
shall be required to sell to the Offeror at the time of completion of, and upon the same
terms and conditions as those contained in, the Change of Control Transaction the
particular number of Common Shares acquired by the Optionee pursuant to subparagraph 3(a)
hereof as a result of the Option having become immediately exercisable.
	 
	 	c)	 	If the Corporation gives a Compulsory Sale Notice to the Optionee, then the Optionee
shall be obligated to sell all of the Common Shares of the Corporation held by him or her
upon the terms specified in the Change of Control Transaction to the Offeror, conditional
upon the completion of the Change of Control Transaction.
	 
	 	d)	 	The Optionee acknowledges that in the event he or she receives a Compulsory Sale
Notice which the Corporation is entitled to deliver hereunder and he or she fails to
execute or cause to be executed all such agreements and documents as may be necessary to
enable the common shares of the Corporation held by him or her to be sold to the Offeror
as provided herein, the Corporation may, as the true and lawful attorney for such
shareholder with full power of substitution in the name of and on behalf of such
shareholder in accordance with the Substitute Decisions Act, 1992 (Ontario), with no
restriction or limitation in that regard, and declaring that such power of attorney may be
exercised during any subsequent legal incapacity on such shareholder’s part, execute and
deliver all such agreements and documents as may be necessary to permit the sale of such common shares of
the Corporation to the Offeror to be completed as herein provided and reflected on the
books of the Corporation. This power of attorney shall not be revoked or terminated by any
act or thing unless this Agreement is terminated or unless the Optionee ceases to be bound
by the provisions hereof.

	4)	 	Plan Incorporated into Agreement. The Optionee acknowledges receipt of a copy of the Plan,
the terms of which are incorporated into this Agreement by reference. In the event of any
conflict between the terms of the Plan and this Agreement, the terms of the Plan shall
prevail.

	5)	 	General. Time shall be of the essence hereof. This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns, as the case may be. This Agreement shall be

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	 	 	governed by and construed in accordance with the laws of the Province of Ontario.

DATED as of the date first above written.

	 	 	 	 	 
	 	SXC Health Solutions Corp.

 	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Officer

	 

Witness

	 	 	)

)	 	 	Signature of Optionee	 

	 

	 	 	)

)	 	 	
type or print name of Optionee

	 	  

Plan Coordinator

[Contact information]

Chief Financial Officer

[Contact information]

6exv10w20

 

EXHIBIT 10.20

EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) is effective as of the 1st day of January, 2008, by
and between Gordon S. Glenn (“Executive”) and SXC Health Solutions Corporation and its subsidiary,
SXC Health Solutions, Inc. (collectively, the “Company”).

RECITALS

     A. The Company wishes to continue to employ Executive, and Executive wishes to continue to be
employed by the Company as its Chairman of its Board of Directors (the “Board”) and Chief Executive
Officer and Executive desires to continue his employment with the Company under the terms and
conditions set forth in this Agreement.

     B. Executive and the Company previously entered into an Employment Agreement (“Original
Agreement”). The Original Agreement contained substantially identical post-employment
confidentiality and noncompetition obligations as this Agreement. Executive acknowledged in the
Original Agreement that his covenants to the Company, including his post-employment obligations,
were made in partial consideration of the Company’s grant of stock options to purchase shares of
the common stock of the Company. The parties have entered into this Agreement because of their
mutual desire to alter certain terms of the Original Agreement.

     C. Executive acknowledges that as a member of the Company’s senior management team (“Senior
Executive Team”), he is one of the persons charged with responsibility for the implementation of
the Company’s business plans, and that Executive is one of only a few employees who will have
regular and complete access to various confidential and/or proprietary information relating to the
Company. Further, Executive acknowledges that his covenants to the Company hereinafter set forth,
specifically including but not limited to his covenant not to engage in competition with the
Company, are being made in partial consideration of the Company’s willingness to continue to employ
Executive under the terms and conditions set forth in this Agreement. As a condition of that
employment, the Company requires that this Agreement be entered into pursuant to which Executive
furnishes the Company with, among other things, certain covenants of Executive, including
Executive’s covenant not to compete with the businesses of the Company for a reasonable period of
time.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals, and the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the parties hereby agree as follows:

ARTICLE I

EMPLOYMENT RELATIONSHIP

     1.1 Employment. Subject to the terms and conditions of this Agreement, the Company
hereby agrees to continue to employ Executive to serve as the Company’s Chairman of the Board and
Chief Executive Officer, and Executive hereby accepts such continued employment, and agrees to
perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner.

     1.2 Duties. The Executive shall be the Company’s Chairman of the Board and Chief
Executive Officer, and shall participate as a member of the Company’s Senior Executive Team. In
addition, Executive shall be responsible for, among other things, the overall performance of the
company

 

 

with an emphasis on mergers and acquisition and investor relations, and such other duties as may
be reasonably requested by the Company. Executive shall report to the Board.

     1.3 Resignation as Officer and Board Position. Executive shall resign his position as
an officer of the Company if Executive’s employment with the Company terminates for any reason,
with Executive’s resignation being effective no later than the effective date of Executive’s
termination of employment. Executive shall resign his position as a member of the Company’s Board
of Directors if Executive’s employment with the Company terminates through a Termination by the
Company for Cause, with Executive’s resignation being effective no later than the effective date of
Executive’s termination of employment.

     1.4 Exclusive Employment. While employed by the Company hereunder, Executive
covenants to the Company that he will devote his entire business time, energy, attention and skill
to the Company (except for permitted vacation periods and reasonable periods of illness or other
incapacity), and use his good faith best efforts to promote the interests of the Company. The
foregoing shall not be construed as prohibiting Executive from spending such time as may be
reasonably necessary to attend to his personal affairs and investments so long as such activities
do not conflict or interfere with Executive’s obligations and/or timely performance of his duties
to the Company.

     1.5 Executive Representations and Warranties as to Employability. Executive hereby
represents and warrants to the Company that:

     (a) The execution, delivery and performance by Executive of this Agreement and any
other agreements contemplated hereby to which Executive is a party do not and shall not
conflict with, breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound;

     (b) Executive is not a party to or bound by
any employment agreement, non-competition agreement or confidentiality agreement with any other person or entity (or if a party to
such an agreement, Executive has disclosed the material terms thereof to the Board prior to
the execution hereof and promptly after the date hereof shall deliver a copy of such
agreement to the Board);

     (c) Upon the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of Executive, enforceable in accordance with its
terms; and

     (d) Executive hereby acknowledges and represents that he has been given the opportunity
to consult with independent legal counsel regarding Executive’s rights and obligations
under this Agreement and that he fully understands the terms and conditions contained
herein.

ARTICLE II

PERIOD OF EMPLOYMENT

     2.1 Employment Period. Executive’s employment hereunder shall commence on January 1,
2008, and shall continue hereunder until the date fixed by the provisions of Section 2.2 hereof,
subject to the early termination provisions of Article V hereof (the “Employment Period”).

     2.2 Initial Term of Employment Period and Extension Terms. The Employment Period shall
initially continue for a term commencing on the date set forth in Section 2.1, above, and ending on

2

 

December 31, 2009 (the “Initial Term”). The Employment Period shall be automatically extended for
successive one (1) calendar year periods following the expiration of the Initial Term (each period
being hereinafter referred to as an “Extension Term”) upon the same terms and conditions provided
for herein unless either party provides the other party with advance written notice of its or
Executive’s intention not to extend the Employment Period; provided, however, that such notice
must be delivered by the non-extending party to the other party not later than sixty (60) days
prior to the expiration of the Initial Term or any Extension Term, as the case may be. If the
Employment Period is not extended as a result of notice to Executive by the Company, and
Executive’s employment with the Company terminates as a result thereof, then Executive’s
termination shall be a treated as a Termination by the Company Without Cause.

ARTICLE III

COMPENSATION

     3.1 Annual Base Compensation. During the Employment Period the Company shall pay to
Executive an annual base salary (the “Annual Base Compensation”) in the amount of Three Hundred Ten
Thousand and 00/100 Dollars ($310,000.00). The Annual Base Compensation shall be paid in regular
installments in accordance with the Company’s regular payroll practices, and shall be subject to
all required federal, state and local withholding taxes. Executive’s Annual Base Compensation shall
be reviewed annually by the Compensation Committee of the Company’s Board of Directors who shall
make a recommendation for approval by the Company’s Board of Directors.

     3.2 Executive Performance Bonus. In respect of each calendar year falling within the
Employment Period, Executive shall be eligible to earn an incentive compensation bonus, depending
upon the achievement of the Company’s and Executive’s performance objectives (the “Incentive
Compensation Bonus”). The amount of the Incentive Compensation Bonus shall be targeted at eighty
percent (80%) of the Executive’s Annual Base Compensation, with the specific percentage determined
by the Company’s Board of Directors after the close of the Company’s fiscal year (December 31). The
Incentive Compensation Bonus, if any, shall be paid to Executive at the same time other members of
the Senior Executive Team are paid their respective incentive compensation bonuses. If Executive is
terminated for Cause, then no Incentive Compensation Bonus shall be paid to Executive for the
calendar year in which the termination occurred. If Executive’s employment terminates during the
calendar year for reasons other than Cause, then Executive shall receive a pro rata amount of the
Incentive Compensation Bonus that Executive would have received if Executive remained employed
throughout the calendar year. To the extent practicable, the Company will notify Executive of
Executive’s performance objectives for the year in January of that year.

     3.3 Expenses. During the Employment Period, Executive shall be entitled to
reimbursement of all business expenses reasonably incurred in the performance of Executive’s duties
for the Company, including reasonable travel-related expenses, upon submission of all receipts and
accounts with respect thereto, and approval by the Company thereof, in accordance with the then
current business expense reimbursement policies of the Company.

     3.4 Vacation. Executive shall be entitled to accrue over the course of the calendar
year paid vacation time in accordance with the Company’s then current vacation policy.

     3.5 Insurance. The Company shall provide Executive with the following company funded
insurance benefits during the Employment Period:

3

 

     a. Dental, vision and supplemental health insurance commencing on your date of
employment with the Company in accordance with the terms and conditions of the applicable
plans and Company policies then in effect.

     b. A term life insurance policy with a death benefit in the amount of 2.5 times
Executive’s Annual Base Compensation in accordance with the applicable plans and Company
policies then in effect, subject to a maximum death benefit of $500,000.00.

     c. Additional Executive Group Life Insurance in the amount of $500,000.00 (contingent
upon insurance company approval) beginning on the first of the month following one month of
employment.

     d. Accidental death and dismemberment insurance commencing upon the date of your
employment with the Company in accordance with the applicable plans and Company policies
then in effect.

     e. Short and long-term disability insurance commencing upon the date of your employment
with the Company in accordance with the applicable plans and Company policies then in
effect.

     3.6 Retirement Plan. Executive shall continue to be eligible to participate in the
Company’s deferred compensation plans, including its 401(k) plan.

     3.7 Grant of Stock Options.

     a. All existing options for shares of the Company stock held by Executive at the time
Executive’s signs this Agreement shall vest on the earlier of January 1, 2009, or upon any
termination of the Employment Period by the Company regardless of the triggering event.

     b. During the Employment Period, for the period covering Fiscal Year 2009 and
thereafter, Executive shall be entitled to participate in the Company’s stock option plan
and receive options to purchase shares of common stock of the Company in the same manner as
other members of the Company’s Board.

     3.8 Other Fringe Benefits. During the Employment Period, Executive shall be
entitled to receive such of the Company’s other fringe benefits as are being provided to other
Executives of the Company on the Senior Executive Team.

     3.9 Vehicle Allowance. Executive shall receive a monthly payment of Five Hundred and
00/100 Dollars ($500.00) for Executive’s use of a personal automobile for business use (“Vehicle
Allowance”). The Vehicle Allowance shall be subject to all required federal, state and local
withholding.

ARTICLE IV

COVENANTS OF EXECUTIVE

     4.1 Covenants Regarding Developments. Executive agrees as follows with regard
to any developments that relate to the Company’s business or Confidential and Proprietary
Information (defined below), or that Executive conceives, makes, develops or acquires, including,
but not limited to, any trade secrets, discoveries, inventions, improvements, ideas, programs,
formulas, diagrams, designs, plans and drawings, whether or not reduced to writing, patented,
copyrighted or trademarked (“Developments”):

4

 

     (a) Executive shall promptly and fully disclose all Developments to the Company, and
shall prepare, maintain, and make available to the Company adequate and current written
records of such Developments and all modifications, research, and studies made or undertaken
by Executive with respect thereto.

     (b) All Developments and related records shall become and remain the exclusive property
of the Company and, to the extent Executive has any rights thereto, Executive hereby assigns
all such rights, title, and interest to the Company.

     (c) Upon request by the Company, Executive, at any time, whether during or after
Executive’s employment by the Company, shall execute, acknowledge and deliver to the Company
all assignments and other documents which the Company deems necessary or desirable to: (i)
vest the Company with full and exclusive right, title, and interest to such Developments,
and (ii) enable the Company to file and prosecute an application for, or acquire, maintain
or enforce, all letters of patent, trademark registrations, and copyrights covering such
Developments.

     (d) The foregoing provisions regarding assignments do not apply to any Developments for
which no equipment, supplies, facility or trade secret information of the Company was used,
and which were developed entirely on Executive’s own time, unless the Developments: (i)
relate to the Company’s business or to its actual or demonstrably anticipated research or
development, or (ii) result from any work performed by Executive for the Company.

     4.2 Ownership and Covenant to Return Documents, etc. Executive agrees that all Company
work product and all documents or other tangible materials (whether originals, copies or
abstracts), including without limitation, price lists, quotation guides, outstanding quotations,
books, records, manuals, files, sales literature, training materials, customer records,
correspondence, computer disks or print-out documents, contracts, orders, messages, phone and
address lists, invoices and receipts, and all objects associated therewith, which in any way relate
to the business or affairs of the Company either furnished to Executive by the Company or are
prepared, compiled or otherwise acquired by Executive during the Employment Period, shall be the
sole and exclusive property of the Company. Executive shall not, except for the use of the Company,
use, copy or duplicate any of the aforementioned documents or objects, nor remove them from the
facilities of the Company, nor use any information concerning them except for the benefit of the
Company, either during the Employment Period or thereafter. Executive agrees that he will deliver
all of the aforementioned documents and objects that may be in his possession to the Company on the
termination of his employment with the Company, or at any other time upon the Company’s request.

     4.3 Nondisclosure Covenant. Executive recognizes that by virtue of Executive’s
employment with the Company, Executive will be granted otherwise prohibited access to trade secrets
and other confidential and proprietary information that is not known to its competitors or within
the industry generally, that was developed by the Company over a long period of time and/or at
substantial expense, and which is confidential in nature or otherwise of great competitive value to
the Company. This information (“Confidential and Proprietary Information”) includes, but is not
limited to, the Company’s trade secrets; information relating to the Company’s production practices
and methods of doing business; sales, marketing, and service strategies, programs, and procedures;
contract expiration dates, customers and prospective customers, including, but not limited to,
their particularized requirements and preferences, and the identity, authority, and
responsibilities of their key contact persons; payment methods; service and product costs; pricing
structures and incentive plans; vendors; financial position and business plans; computer programs
and databases; research projects; new product and service developments; and any other information
of the Company or any of its vendors or customers that the Company informs Executive, or which
Executive should know by virtue of his position or the

5

 

circumstances in which he learned it, is to be kept confidential. Confidential and Proprietary
Information does not include information that is (i) in the public domain (except as a result of a
breach of this Agreement or Executive’s obligations under a statutory or common law obligation) or
(ii) obtained by Executive from a third party subsequent to the termination of Executive’s
employment with the Company (except where the third party obtains the information in violation of a
contractual obligation, a statutory or common law obligation). Executive agrees that during the
Employment Period and at all times thereafter (a) Executive will not disclose, use or permit others
to use any Confidential and Proprietary Information, or otherwise make use of any of it for his own
purposes or the purposes of another, except as required in the course of his employment for the
benefit of the Company or as required by law, and (b) Executive will take all reasonable measures,
in accordance with the Company’s policies, procedures, and instructions, to protect the
Confidential and Proprietary Information from any accidental or unauthorized disclosure or use.

     4.4 Noninterference Covenant. Executive agrees that during the Employment Period and
for the twelve (12) month period thereafter, he will not, for any reason, directly or indirectly
solicit, hire, or otherwise do any act or thing which may induce any other employee of the Company
(who is employed by the Company at the end of the Executive’s employment with the Company) to leave
the employ of the Company.

     4.5 Covenant of Nonsolicitation of Customers. Executive acknowledges the Company’s
legitimate interest in protecting its customers for a reasonable period of time following the
termination of Executive’s employment. Accordingly, Executive agrees that during the Restricted
Period, Executive will not: (a) directly or indirectly, solicit or accept business from, or provide
products or services to, any Customer, where such business, products or services would be
competitive with the Company’s business, products or services, or (b) do any act or thing which may
interfere with or adversely affect the relationship (contractual or otherwise) of the Company with
any Customer or vendor of the Company or induce any such Customer or vendor to cease doing business
with the Company. For purposes of this paragraph, the term “Customer” means (i) a customer of the
Company to which Executive sold or provided the Company’s products or services at any time during
the two (2) year period immediately preceding the termination of Executive’s employment, (ii) any
entity for which Executive orchestrated, developed, supervised, coordinated or participated in
marketing strategy, marketing plans and marketing campaigns on behalf of the Company at any time
during the two (2) year period immediately preceding the termination of Executive’s employment, or
(iii) any entity as to which Executive acquired Confidential and Proprietary Information at any
time during Executive’s employment with the Company. “Restricted Period” means (i) the Employment
Period and the two (2) year period thereafter of the termination of Executive’s employment.

     4.6 Covenant Not to Compete. Executive expressly acknowledges that (i) the Company is
and will be engaged in the business of providing healthcare transaction processing services and
information technology solutions to the pharmaceutical industry, including without limitation: (x)
pharmacy benefits services and analytics software and related ASP services, including claims
processing, pharmacy networks, data warehousing and information analysis, rebate contracting and
formulary management, clinical initiatives, and consumer web services; and (y) pharmacy practice
management and point of sale (POS) systems for retail pharmacy (independents and chains),
institutional/nursing home pharmacy, and high-volume mail order pharmacy; (ii) Executive is one of
a limited number of persons who has extensive knowledge and expertise relevant to the businesses of
the Company; (iii) Executive’s performance of his services for the Company hereunder will afford
Executive full and complete access to and cause Executive to become highly knowledgeable about the
Company’s Confidential and Proprietary Information; (iv) the agreements and covenants contained in
this Section 4.6 are essential to protect the business and goodwill of the Company, because, if
Executive enters into any activities competitive with
the businesses of the Company, Executive will cause substantial harm to the Company; (v) Executive
will

6

 

be exposed to the Company’s largest customers; (vi) the business territory of the Company at the
time this Agreement was entered into constitutes the United States and Canada (“Business
Territory”); and (vii) Executive’s covenants to the Company set forth in this Section 4.6 are being
made in consideration of the Company’s willingness to employ him. Accordingly, Executive hereby
agrees that during the Restricted Period, Executive shall not, within the Business Territory,
directly or indirectly own any interest in, invest in, lend to, borrow from, manage, control,
participate in, consult with, become employed by, render services to, or in any other manner
whatsoever engage in, any business which is competitive with any business actively being engaged in
by the Company or actively (and demonstrably) being considered by the Company for entry into on the
date of the termination of Executive’s employment with the Company. The preceding to the contrary
notwithstanding, Executive shall be free to make investments in the publicly traded securities of
any corporation, provided that such investments do not amount to more than 1% of the outstanding
securities of any class of such corporation.

     4.7 Remedies for Breach. Executive recognizes that the rights and privileges granted
to Executive by this Agreement, and Executive’s corresponding covenants to the Company, are of a
special, unique, and extraordinary character, the loss of which cannot reasonably or adequately be
compensated for in damages in any action at law or through the offset or withholding of any monies
to which Executive might be entitled from the Company. Accordingly, Executive understands and
agrees that the Company shall be entitled to equitable relief, including a temporary restraining
order and preliminary and permanent injunctive relief, to prevent or enjoin a breach of this
Agreement. Executive also understands and agrees that any such equitable relief shall be in
addition to, and not in substitution for, any other relief to which the Company may be entitled.

ARTICLE V

TERMINATION

     5.1 Termination and Triggering Events. Notwithstanding anything to the contrary
elsewhere contained in this Agreement, the Employment Period shall terminate at the expiration of
the Initial Term or any Extension Term upon notice as provided in Section 2.2, or prior to the
expiration of the Initial Term or any Extension Term upon the occurrence of any of the following
events (hereinafter referred to as “Triggering Events”): (a) Executive’s death; (b) Executive’s
Total Disability; (c) Executive’s Resignation; (d) Termination by the Company for Cause; (e)
Termination by the Company Without Cause; (f) Termination arising out of a Change of Control; or
(g) Resignation for Good Reason.

     5.2 Rights Upon Occurrence of a Triggering Event. Subject to the provisions of Section
5.3 hereof, the rights of the parties upon the occurrence of a Triggering Event prior to the
expiration of the Initial Term or any Extension Term shall be as follows:

     (a)
Death or Total Disability. If the Triggering Event was Executive’s Death or Total
Disability, then Executive shall be entitled to receive (i) Executive’s Annual Base
Compensation and accrued but unpaid vacation through the date thereof; and (ii) payment of
a Executive’s Incentive Compensation Bonus for the year in which the termination occurred,
if any, pro rated to Executive’s date of termination.

     (b) Resignation or Termination by the Company for Cause. If the Triggering
Event was Executive’s Resignation (other than a Resignation for Good Reason) or a
Termination by the Company for Cause, then Executive shall be entitled to receive
Executive’s Annual Base Compensation and accrued but unused vacation time through the date
of the Triggering Event, and to continue to participate in the Company’s Executive welfare
plans and programs (including, without limitations, health insurance plans) through the
date of the Triggering Event and,
thereafter, only to the extent permitted under the terms of such plans and programs.

7

 

     (c) Termination by Company Without Cause. If the Triggering Event was a
Termination by the Company Without Cause that is not a Termination Arising Out of a Change
of Control, then Executive shall be entitled to receive (i) Executive’s Annual Base
Compensation and accrued but unpaid vacation through the date thereof; (ii) payment of a
Executive’s Incentive Compensation Bonus for the year in which the termination occurred, if
any, pro rated to Executive’s date of termination; and (iii) the Severance Benefit (defined
below). Executive’s entitlement to the benefits provided in subsections 5.2(c)(ii) and (iii)
are contingent on Executive signing a Separation Agreement and General Release similar to
that attached hereto as Exhibit A.

     (d) Termination Arising Out of a Change of Control. If the Triggering Event was
a Termination Arising Out of a Change of Control, then Executive shall be entitled to
receive (i) Executive’s Annual Base Compensation and accrued but unpaid vacation through the
date thereof; (ii) payment of a Executive’s Incentive Compensation Bonus for the year in
which the termination occurred, if any, pro rated to Executive’s date of termination; and
(iii) the Change of Control Severance Benefit (defined below). Executive’s entitlement to
the benefits provided in subsections 5.2(d)(ii) and (iii) are contingent on Executive
signing a Separation Agreement and General Release similar to that attached hereto as
Exhibit A.

     (e) Resignation for Good Reason. If the Triggering Event was a Resignation for
Good Reason that is not a Termination Arising Out of a Change of Control, then Executive
shall be entitled to receive (i) Executive’s Annual Base Compensation and accrued but unpaid
vacation through the date thereof; (ii) payment of a Executive’s Incentive Compensation
Bonus for the year in which the resignation occurred, if any, pro rated to Executive’s date
of termination; and (iii) the Severance Benefit (defined below). Executive’s entitlement to
the benefits provided in subsections 5.2(e)(ii) and (iii) are contingent on Executive
signing a Separation Agreement and General Release similar to that attached hereto as
Exhibit A.

     (f) Cessation of Entitlements and Company Right of Offset. Except as otherwise
expressly provided herein, all of Executive’s rights to salary, Executive benefits, fringe
benefits and bonuses hereunder (if any) which would otherwise accrue after the termination
of the Employment Period shall cease upon the date of such termination. The Company may
offset any loans, cash advances or fixed amounts which Executive owes the Company against
any amounts it owes Executive under this Agreement.

     (g) Treatment of Options. Executive shall be required to exercise any vested
options within ninety (90) days from date of the termination of his employment.

     (h) No Duplication of Benefits. For clarification, if Executive receives
benefits under subsection 5.2(c) or 5.2(d), then Executive shall not be entitled to benefits
under any other subsection in Section 5 of this Agreement.

     For further clarity, the payments provided for in subsections 5.2(b), 5.2(c), 5.2(d) and
5.2(e) will not be subject to any reduction or elimination, except as provided by subsection
5.2(f), or if Executive breaches any Executive’s obligations under Article IV, but will not be
reduced should Executive obtain alternative employment.

     5.3 Survival of Certain Obligations. The provisions of Articles IV, and VI shall
survive any termination of the Employment Period, whether by reason of the occurrence of a
Triggering Event or the expiration of the Initial Term or any Extension Term.

8

 

     5.4 Definitions. For purposes of Article V, the following definitions apply:

     (a) “Resignation” means a voluntary termination of Executive’s employment with the Company
that is not a Resignation for Good Reason.

     (b) “Resignation for Good Reason” means a voluntary termination of Executive’s employment
hereunder on account of, and within sixty (60) days after, the occurrence of one or more of the
following events:

     (i) The assignment to Executive of any duties inconsistent in any material
respect with Executive’s position (including status, offices and titles), authority, duties
or responsibilities as contemplated by Section 1.2 hereof which results in a diminution of
Executive’s position, excluding for this purpose an isolated, insubstantial or inadvertent
action not taken in bad faith and which is remedied by the Company within thirty (30) days
after receipt of written notice thereof given by Executive;

     (ii) The failure of the Company to comply with any of the material provisions of
this Agreement, other than an isolated, insubstantial or inadvertent action not taken in
bad faith and which is remedied by the Company within thirty (30) days after receipt of
written notice thereof given by Executive;

     (iii) Executive is required to relocate his principal business office or his
principal residence outside of the Chicago metropolitan area, or the Company assigns
Executive duties that could reasonably require such a relocation unless, within thirty (30)
days of receipt of written notice by the Executive, the Company removes the assignment of
the duties that necessitated or could necessitate the relocation; or

     (c) “Severance Benefit” means

     (i) A lump-sum payment, less required tax withholding, equal to two (2) times
Executive’s Annual Base Compensation at the time of the termination of Executive’s
employment; plus one (1) times the average incentive compensation payments over the
previous two years; and

     (ii) Payment of health insurance premiums for a health insurance policy for the
benefit of Executive, his spouse and his dependents, with substantially the same benefits
as for full-time employees, until Executive is eligible for Medicare benefits.

Except as provided by Section 6,10 of this Agreement, the Severance Benefit shall be paid
within thirty (30) days of Executive’s signing of the Separation Agreement and General
Release similar to that attached hereto as Exhibit A.

     (d) “Change of Control Severance Benefit” means

     (i) A lump-sum payment, less required tax withholding, equal to (x) two times
Executive’s Annual Base Compensation at the time of the termination of Executive’s
employment plus (y) two times the greater of either (i) the average of Executive’s last two
Incentive Compensation Bonuses or (ii) 80% of the average of the Executive’s Annual Base
Compensation measured over the twenty-four month period preceding the termination of
Executive’s employment; and

9

 

     (ii) Payment of health insurance premiums for a health insurance policy for the
benefit of Executive, his spouse and his dependents, with substantially the same benefits
as for full-time employees, until Executive is eligible for Medicare benefits.

Except as provided by Section 6.10 of this Agreement, the Change of Control Severance
Benefit shall be paid within thirty (30) days of Executive’s signing of the Separation
Agreement and General Release similar to that attached hereto as Exhibit A.

     (e) “Termination by the Company for Cause” means termination by the Company of Executive’s
employment for:

     (i) The failure of Executive to comply with any of the material provisions of
this Agreement, other than an isolated, insubstantial or inadvertent action not taken in
bad faith and which is remedied by Executive within thirty (30) days after receipt of
written notice thereof given by the Company;

     (ii) A conviction of Executive by a court of competent jurisdiction of a
felony;

     (iii) The refusal, failure or neglect of Executive to perform his duties under
his employment agreement in a manner that is materially detrimental to the business or
reputation of the Company unless remedied by Executive within thirty (30) days after
receipt of written notice thereof given by the Company;

     (iv) The engagement by the Executive in illegal, unethical or other wrongful
conduct that is materially detrimental to the business or reputation of the Company; or

     (v) The pursuit by Executive of interests that are materially adverse to the
Company unless remedied by Executive within thirty (30) days after receipt of written
notice thereof given by the Company.

     (f) “Termination by the Company Without Cause” means a termination of Executive’s employment
by the Company which is not a Termination by the Company for Cause, provided that the termination
of the Employment Period on account of the failure of the Company to extend the Employment Period
in accordance with the provisions of Section 2.2 hereof shall constitute a Termination by the
Company Without Cause.

     (g) A “Termination Arising Out of a Change of Control” occurs when Executive resigns or if
Executive is subject to a Termination by the Company with Cause or a Termination by the Company
without Cause within twelve (12) months of a “Change of Control,” which shall be defined under this
Agreement to mean any of the following occurrences:

     (i) Any person, other than SXC Health Solutions Corporation or an employee
benefit plan of SXC Health Solutions Corporation, acquires directly or indirectly the
Beneficial Ownership (as defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended) of any voting security of SXC Health Solutions Corporation and becomes,
immediately after and as a result of such acquisition, directly or indirectly, the
Beneficial Owner of voting securities representing 50% or more of the total voting power of
all of the then-outstanding voting securities of SXC Health Solutions Corporation;

10

 

     (ii) The shareholders of SXC Health Solutions Corporation approve a
merger, consolidation, recapitalization, or reorganization of SXC Health Solutions
Corporation, a reverse stock split of outstanding voting securities, or consummation
of any such transaction if shareholder approval is not sought or obtained, other than
any such transaction that would result in at least 75% of the total voting power
represented by the voting securities of the surviving entity outstanding immediately
after, and as a result of such transaction, being Beneficially Owned by at least 75%
of the holders of outstanding voting securities of SXC Health Solutions Corporation
immediately prior to the transaction, with the voting power of each such continuing
holder relative to other such continuing holders not substantially altered in the
transaction; or

     (iii) The shareholders of SXC Health Solutions Corporation approve a plan
of complete liquidation of SXC Health Solutions Corporation or SXC Health Solutions,
Inc. or an agreement for the sale or disposition by SXC Health Solutions Corporation
of all or a substantial portion of assets (i.e., 50% or more) of the total assets of
SXC Health Solutions Corporation or SXC Health Solutions, Inc.

     (h) “Total Disability” means Executive’s inability, because of illness, injury
or other physical or mental incapacity, to perform Executive’s duties hereunder (as
determined by the Board in good faith) for a continuous period of one hundred eighty (180)
consecutive days, or for a total of one hundred eighty (180) days within any three hundred
sixty (360) consecutive day period, in which case such Total Disability shall be deemed to
have occurred on the last day of such one hundred eighty (180) day or three hundred sixty
(360) day period, as applicable.

     5.5 Payment of Insurance Continuation Benefits. The insurance premium payments
provided pursuant to sections 5.4(c)(ii) and 5.2(d)(ii) shall be initially satisfied through the
payment of the COBRA insurance continuation benefits available to Executive, his spouse and his
dependents, and those payments are contingent upon Executive, his spouse and his dependents making
a timely COBRA election; provided, however, that any obligations of the Company to make insurance
premium payment beyond the COBRA insurance continuation period shall be satisfied, at the
Company’s sole discretion, through paying the premiums on either (1) the conversion of the
applicable health insurance policies into individual policies; or (2) the securing of individual
policies providing comparable coverage to the Company’s group health insurance policies.

ARTICLE VI

GENERAL

     6.1 Governing Law. This Agreement shall be subject to and governed by the laws of the
State of Illinois without regard to any choice of law or conflicts of law rules or provisions
(whether of the State of Illinois or any other jurisdiction), irrespective of the fact that
Executive may become a resident of a different state.

     6.2 Binding Effect. The Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and Executive and Executive’s executors, administrators,
personal representatives and heirs.

     6.3 Assignment. Executive expressly agrees for Executive and on behalf of Executive’s
executors, administrators and heirs, that this Agreement and Executive’s obligations, rights,
interests and benefits hereunder shall not be assigned, transferred, pledged or hypothecated in any
way by Executive, Executive’s executors, administrators or heirs, and shall not be subject to
execution, attachment or similar process. Any attempt to assign, transfer, pledge, hypothecate or
otherwise dispose of this Agreement or

11

 

any such rights, interests and benefits thereunder contrary to the foregoing provisions, or the
levy of any attachment or similar process thereupon shall be null and void and without effect and
shall relieve the Company of any and all liability hereunder. This Agreement shall be assignable
and transferable by the Company (but the Company shall not be required to assign or transfer this
Agreement) to any successor in interest without the consent of Executive.

     6.4 Complete Understanding. This Agreement constitutes the complete understanding
among the parties hereto with regard to the subject matter hereof, and supersedes any and all prior
agreements and understandings relating to the employment of Executive by the Company, including
without limitation any prior compensation plans or compensation agreements entered into between
Executive and the Company.

     6.5 Amendments. No change, modification or amendment of any provision of this
Agreement shall be valid unless made in writing and signed by all of the parties hereto.

     6.6 Waiver. The waiver by the Company of a breach of any provision of this Agreement
by Executive shall not operate or be construed as a waiver of any subsequent breach by Executive.
The waiver by Executive of a breach of any provision of this Agreement by the Company shall not
operate as a waiver of any subsequent breach by the Company.

     6.7 Venue, Jurisdiction, Etc. Executive hereby agrees that any suit, action or
proceeding relating in any way to this Agreement shall be brought and enforced in the Eighteenth
Judicial Circuit, DuPage County, State of Illinois or in the District Court of the United States of
America for the Northern District of Illinois, Eastern Division, and in either case Executive
hereby submits to the jurisdiction of each such court. Executive hereby waives and agrees not to
assert, by way of motion or otherwise, in any such suit, action or proceeding, any right of
removal, any claim that Executive is not personally subject to the jurisdiction of the above-named
courts, that the suit, action or proceeding is brought in an inconvenient forum or that the venue
of the suit, action or proceeding is improper. Executive consents and agrees to service of process
or other legal summons for purpose of any such suit, action or proceeding by registered mail
addressed to Executive at Executive’s address listed in the business records of the Company.
Executive and the Company do each hereby waive any right to trial by jury, Executive or it may have
concerning any matter relating to this Agreement.

     6.8 Indemnification of Executive.

     (a) Executive is hereby entitled to indemnification for Executive’s acts or omissions
in Executive’s capacity as an Executive or officer of the Company to the same extent as the
Company’s other senior vice presidents and in the manner provided by the Company’s bylaws.
In addition the Company shall indemnify Executive for any damages suffered or incurred by
Executive as a result of serving as an Officer of the Company provided that Executive has
acted honestly and in good faith with a view to the best interest of the Company. Within
ten (10) days after receipt of a claim for indemnification accompanied by evidence of the
liability or expense subject to indemnification, the Company shall pay or cause to be paid
the indemnification claim. Executive shall give notice to the Company no later than ten
(10) days after such Executive shall have been served with written notice of any claim that
may give rise to a claim for indemnification.

     (b) Subject to any rights of or duties to any insurer, reinsurer or other third party
having liability for any claim made or brought against Executive, the Company shall have
the right, at its option, to assume, at its own expense, the control of the defense
thereof, including the employment of legal counsel reasonably satisfactory to Executive. If
the Company exercises the

12

 

foregoing right, Executive shall cooperate with the Company and make available to it all
information under the control of Executive, which is relevant to the claim. If the Company
does not exercise the foregoing right, Executive shall keep the Company reasonably apprised
of the progress of the defense of the claim. Nothing herein shall preclude Executive, at
Executive’s expense, from employing legal counsel of Executive’s choosing to participate in
the defense of any claim made or brought against Executive in addition to legal counsel
employed by the Company.

     (c) If the Company elects to assume control of the defense of any claim, the Company
shall not settle or compromise the claim for and on behalf of Executive without the written
consent of Executive; provided, however, that if the Company receives an offer of settlement
or compromise from the other party or parties to the claim in a particular amount or obtains
a commitment from such party or parties to accept a compromise or settlement in such amount
if offered, and if such settlement or compromise requires only the payment of such amount,
the granting of an appropriate release or similar accommodation, and no other relief, and
Executive refuses to consent thereto and elects to continue to defend the claim, then the
extent of the indemnity to which Executive shall be entitled hereunder shall be limited to
such amount and the legal fees and expenses that Executive would have been entitled to
receive from the Company if such compromise or settlement had been accepted.

     (d) This indemnification obligation shall continue notwithstanding that Executive has
ceased to be an officer or employee of the Company.

     6.9 Directors & Officers Liability Insurance. The Company shall maintain adequate
Directors and Officers liability insurance coverage, which shall include Executive in Executive’s
capacity as an Officer. The adequacy of the Directors and Officers liability insurance coverage
shall be determined annually by the Board in its reasonable discretion.

     6.10 Tax Provisions.

     (a) Compliance With Section 409A of the Internal Revenue Code. To the extent
applicable, it is intended that this Agreement comply with the provisions of section 409A of
Internal Revenue Code of 1986, as amended (the “Code”), so as to prevent the inclusion in
gross income of any amounts payable or benefits provided hereunder in a taxable year that is
prior to the taxable year or years in which such amounts or benefits would otherwise
actually be distributed, provided or otherwise made available to Executive. This Agreement
shall be construed, administered, and governed in a manner consistent with this intent. Any
provision that would cause any amount payable or benefit provided under this Agreement to be
includable in the gross income of Executive under Code section 409A(a)(l) shall have no
force and effect unless and until amended to cause such amount or benefit to not be so
includable (which amendment shall be mutually agreed upon by the parties in good faith and
may be retroactive to the extent permitted by Code section 409A). In particular, to the
extent Executive becomes entitled to receive a payment or a benefit upon an event that does
not constitute a permitted distribution event under Code section 409A(a)(2), then
notwithstanding anything to the contrary in this Agreement, such payment or benefit will be
made or provided to Executive on the earlier of (i) the effective date of Executive’s
“separation from service” with Company (determined in accordance with Code section 409A);
provided however, that if Executive is a “specified employee” (within the meaning of Code
section 409A), this date will be the date which is 6 months after the effective date of
Executive’s separation from service with Company, or (ii) the date of Executive’s death. Any
reference in this Agreement to Code section 409A shall also

13

 

include any proposed, temporary or final regulations, or any other guidance, promulgated
with respect to such section by the U.S. Department of the Treasury or the Internal Revenue
Service.

     (b) Compliance With Section 162(m) of the Code. Notwithstanding anything herein
to the contrary, if the Company reasonably anticipates that the deduction of any payment to
Executive hereunder will be limited or eliminated by the application of Code section 162(m),
which generally limits the deduction of compensation paid by public corporations in excess
of $1 million annually to certain executives, the payment of such amount shall be delayed
until the earliest date at which the Company reasonably anticipates that the deduction of
the payment would not be limited or eliminated by the application of Code section 162(m).

     (c) Excise Taxes Under Sections 280G and 4999 of the Code. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined that the
Executive shall become entitled to payments and/or benefits provided by this Agreement or
any other amounts in the “nature of compensation” (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company or any affiliate, any
person whose actions result in a change of ownership or effective control of the Company
covered by Section 280G(b)(2) of the Code or any person affiliated with the Company or such
person) as a result of such change in ownership or effective control of the Company, (a
“Payment”) would be subject to the excise tax imposed by section 4999 or any interest or
penalties are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively referred to as
the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

     6.11 Severability. If any portion of this Agreement shall be for any reason, invalid
or unenforceable, the remaining portion or portions shall nevertheless be valid, enforceable and
carried into effect.

     6.12 Headings. The headings of this Agreement are inserted for convenience only and
are not to be considered in the construction of the provisions hereof.

     6.13 Notices. All notices under this Agreement shall be in writing and shall be deemed
properly sent, (i) when delivered, if by personal service or reputable overnight courier service,
or (ii) when received, if sent by certified or registered mail, postage prepaid, return receipt
requested to the recipient at the address indicated below or otherwise subsequently provided by one
party to the other party:

Notices to Executive:

To the last known address of

Executive as reflected on the books

and records of the Company.

14

 

Notices to Company:

SXC Health Solutions, Inc.

Attn: Chairman of the Compensation Committee of the Board of Directors

2441 Warrenville Road, Suite 610
Lisle, Illinois 60532-3642

With Copies to:

Larry Zanger, Esq.

Holland & Knight LLP

131 South Dearborn, 30th Floor

Chicago, Illinois 60603

     6.14 Counterparts. This Agreement may be executed in one or more
counterparts, all of which, taken together, shall constitute one and the same agreement.

	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 
	SXC HEALTH SOLUTIONS CORPORATION	 	 	 	 	 	 
	and SXC HEALTH SOLUTIONS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jeff Park	 	 	 	/s/ Gordon S. Glenn	 	 
	 

	 	 

Jeff Park, Senior Vice President and
	 	 	 	 

   Gordon S. Glenn	 	 
	 

	 	Chief Financial Officer	 	 	 	 	 	 

15

 

EXHIBIT A

To Employment Agreement

Between Gordon S. Glenn and

SXC Health Solutions Corporation and SXC Health Solutions, Inc.

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

     This Confidential Separation Agreement and General Release (“Agreement”) is entered into by
and between Gordon S. Glenn, an individual (“Executive”), and SXC Health Solutions Corporation, and
its subsidiary, SXC Health Solutions, Inc. (collectively, the “Company”): 1. Termination of Employment. Executive acknowledges that Executive’s employment with
the Company terminated effective                     
                     ,
200          .

     2. Compensation owed. Executive acknowledges receipt of all compensation (including,
but not limited to, any and all overtime, commission, bonus payments and all other benefits except
accrued but unused vacation time) due from the Company through the payroll period immediately
prior to                                          ,
200          . Executive and the Company acknowledge
that Executive will receive a lump-sum payment equal to any final compensation (including Executive’s accrued but
unused vacation time
of                    
(___) days) accrued but not yet paid to Executive on the Company’s next regular payday.

     3. Separation Benefit: Subject to
the provisions of this Agreement, the Company will
pay Executive the benefits set forth in Article V, Subsection 5.2(c) [or (d)] [or(e)](ii) and (iii)
of Executive’s Employment Agreement with the Company (“Separation Benefit”), commencing on the
first regular payday following the twenty-first day after Executive’s signing of this Agreement.
The Separation Benefit does not constitute nor is it intended to be any form of compensation to
Executive for any services to the Company.

     4. Consideration. Executive acknowledges that Executive would not be entitled to the
Separation Benefit provided for in paragraph 3 above in the absence of Executive’s signing of this
Agreement, that the Separation Benefit constitutes a substantial economic benefit to Executive, and
that it constitutes good and valuable consideration for the various commitments undertaken by
Executive in this Agreement.

     5. Parties Released. For purposes of this Agreement, the term “Releasees” means the
Company, its past and present parents, subsidiaries, divisions, and affiliated companies; their
respective predecessors, successors, assigns, benefit plans, and plan administrators; and their
respective past and present shareholders, directors, trustees, officers, employees, agents,
attorneys and insurers.

     6. General Release. Executive, for and on behalf of Executive and each of Executive’s
personal and legal representatives, heirs, devisees, executors, successors and assigns, hereby
acknowledges full and complete satisfaction of, and fully and forever waives, releases, acquits,
and discharges Releasees from any and all claims, causes of action, demands, liabilities, damages,
obligations, and debts (collectively referred to as “Claims”), of every kind and nature, whether
known or unknown, suspected or unsuspected, or fixed or contingent, which Executive holds as of the
date Executive signs this Agreement, or at any time previously held against Releasees, or any of
them, arising out of any matter whatsoever (with the exception of breaches of this Agreement). This
General Release specifically includes, but is not limited to, any and all Claims:

 

 

     (a) Arising out of or in any way related to Executive’s employment with the
Company, the termination of his employment;

     (b) Arising out of or in any way related to any contract or agreement between Executive
and the Company;

     (c) Arising under or based on the Equal Pay Act of 1963; Title VII of the Civil Rights
Act of 1964, as amended; Section 1981 of the Civil Rights Act of 1866; the Americans With
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Fair Labor Standards
Act of 1938; the National Labor Relations Act; the Worker Adjustment and Retraining
Notification Act of 1988; Employee Retirement Income Security Act of 1974 (ERISA) (excepting
claims for vested benefits, if any, to which Executive is legally entitled thereunder); the
Illinois Constitution; the Illinois Wage Payment and Collection Act; the Illinois Minimum
Wage Law, the Illinois Human Rights Act; and the Illinois Whistleblower Act;

     (d) Arising under or based on the Age Discrimination in Employment Act of 1967 (ADEA),
as amended by the Older Workers Benefit Protection Act (OWBPA), and alleging a violation
thereof based on any action or failure to act by Releasees, or any of them, at any time
prior to the effective date of this Agreement; and

     (e) Arising out of or in any way related to any federal, state, county or local
constitutional provision, law, statute, ordinance, decision, order, policy or regulation
prohibiting employment discrimination, providing for the payment of wages or benefits,
providing for a paid or unpaid leave of absence; otherwise creating rights or claims for
employees , including, but not limited to, any and all claims alleging breach of public
policy, whistleblowing, retaliation, the implied obligation of good faith and fair dealing;
any express or implied oral or written contract, handbook, manual, policy statement or
employment practice; or alleging misrepresentation, defamation, libel, slander, interference
with contractual relations, intentional or negligent infliction of emotional distress,
invasion of privacy, false imprisonment, assault, battery; fraud, negligence, or wrongful
discharge.

     7. Intended Scope of Release. It is the intention of the parties and is fully
understood and agreed by them that this Agreement includes a General Release of all Claims (with
the exception of breaches of this Agreement and claims for vested benefits, if any, to which
Executive is legally entitled under ERISA), which Executive holds or previously held against
Releasees, or any of them, whether or not they are specifically referred to herein. No reference
herein to any specific claim, statute or obligation is intended to limit the scope of this General
Release and, notwithstanding any such reference, this Agreement shall be effective as a full and
final bar to all Claims of every kind and nature, whether known or unknown, suspected or
unsuspected, or fixed or contingent, released in this Agreement.

     8. Executive Waiver of Rights. As part of the foregoing General Release, Executive is
waiving all of Executive’s rights to any recovery, compensation, or other legal, equitable or
injunctive relief (including, but not limited to, compensatory damages, liquidated damages,
punitive damages, back pay, front pay, attorneys’ fees, and reinstatement to employment), from
Releasees, or any of them, in any administrative, arbitral, judicial or other action brought by or
on behalf of Executive in connection with any Claim released in this Agreement.

-A 2-

 

     9. Covenant Not to Sue. In addition to all other obligations contained in this
Agreement, Executive agrees that Executive will not initiate, bring or prosecute any suit or action
against any of Releasees in any federal, state, county or municipal court, with respect to any of
the Claims released in this Agreement. Notwithstanding the forgoing, nothing in this Agreement
shall preclude Executive from bringing suit to challenge the validity or enforceability of this
Agreement under the Age Discrimination in Employment Act as amended by the Older Workers Benefit
Protection Act.

     10. Remedies for Breach. If the Executive, or anyone on Executive’s behalf, initiates,
brings or prosecutes any suit or action against Releasees, or any of them, in any federal, state,
county or municipal court, with respect to any of the Claims released in this Agreement (except to
challenge the validity or enforceability of this Agreement under the Age Discrimination in
Employment Act as amended by the Older Workers Benefit Protection Act), or if the Executive
breaches any of the terms of this Agreement, then Executive shall be liable for the payment of all
damages, costs and expenses (including attorneys’ fees) incurred by Releasees, or any of them, in
connection with such suit, action or breach.

     11. No Admission of Liability. Nothing in this Agreement constitutes or shall be
construed as an admission of liability on the part of Releasees, or any of them. Releasees
expressly deny any liability of any kind to Executive, and particularly any liability arising out
of or in any way related to Executive’s employment with the Company or the termination of
Executive’s employment.

     12. Post-Employment Covenants.

     (a) Executive hereby reaffirms and agrees to abide by all confidentiality and
nondisclosure obligations, nonsolicitation obligations, noncompetition obligations and any
other post-employment obligations to which Executive is subject under any contract or
agreement between Executive and the Company as well as the Illinois Trade Secrets Act, any
other Illinois statute and Illinois common law.

     (b) Executive shall keep confidential the circumstances surrounding the termination of
Executive’s employment with the Company, as well as the existence of this Agreement and its
terms, and agrees that neither he, nor Executive’s attorneys, nor any of Executive’s
agents, shall directly or indirectly disclose any such matters (other than to the Equal
Employment Opportunity Commission, the Illinois Human Rights Commission, or any other
federal, state or local fair employment practices agency), unless written consent is given
by the Company’s President, or unless required to comply with any federal, state or local
law, rule or order. However, this paragraph will not prohibit Executive from disclosing the
terms of this Agreement to Executive’s attorneys, accountants or other tax consultants as
necessary for the purpose of securing their professional advice, or in connection with any
suit or action alleging a breach of this Agreement.

     (c) Executive agrees that Executive will not access or attempt to access, directly or
indirectly, by any matter whatsoever, the Company’s computer network, including without
limitation, the Company’s e-mail system, the Company’s electronic document storage and
retrieval system, and the Company’s computer network servers and related equipment.

     13. Warranty of Return of Company Property. Executive warrants and acknowledges that
Executive has turned over to the Company all equipment or other property issued to Executive’s by
the Company, along with all documents, notes, computer files, and other materials which Executive
had in Executive’s possession or subject to Executive’s control, relating to the Company and/or any

-A 3-

 

of its customers. Executive further warrants and acknowledges that Executive has not retained any
such documents, notes, computer files or other materials (including any copies or duplicates
thereof).

     14. Warranty and Covenant of Nondisparagement. Executive (i) warrants that during the
time period between when Executive was notified of the termination of Executive’s employment with
the Company and Executive’s signing of this Agreement Executive has not made any disparaging
remarks about Releasees which are likely to cause harm to Releasees, collectively or individually,
or their products and services (“Disparaging Remarks”) and (ii) agrees that Executive shall not
make any Disparaging Remarks following Executive’s signing of this Agreement.

     15. Consideration Period. Executive is advised of to consult with an attorney or other
representative of Executive’s choice prior to signing this Agreement. Executive has a period of
twenty-one (21) days within which to consider and accept the Agreement. This twenty-one (21) day
period begins to run from                                          ,
200          , which Executive acknowledges is the date on
which Executive received a copy of this Agreement (if not earlier). Executive agrees that any
changes or modifications (material or otherwise) made to this Agreement prior to its execution by
Executive shall not restart the twenty-one (21) day consideration period.

     16. Revocation Period. Executive understands that Executive has the right to revoke
this Agreement at any time within seven (7) days after Executive signs it and that the Agreement
shall not become effective or enforceable until this revocation period has expired without
revocation.

     17. Resignation of Officer Position. Executive shall resign from Executive’s position
as an officer of the Company effective no later than the effective date of Executive’s termination
of employment with the Company.

     18.
Warranty of Understanding and Voluntary Nature of Agreement. Executive acknowledges that
Executive has carefully read and fully understands all of the provisions of this Agreement; that
Executive knows and understands the rights Executive is waiving by signing this Agreement; and that
Executive has entered into the Agreement knowingly and voluntarily, without coercion, duress or
overreaching of any sort.

     19. Severability. The provisions of this Agreement are fully severable. Therefore, if
any provision of this Agreement is for any reason determined to be invalid or unenforceable, such
invalidity or unenforceability will not affect the validity or enforceability of any of the
remaining provisions. Furthermore, any invalid or unenforceable provisions shall be modified or
restricted to the extent and in the manner necessary to render the same valid and enforceable, or,
if such provision cannot under any circumstances be modified or restricted, it shall be excised
from the Agreement without affecting the validity or enforceability of any of the remaining
provisions. The parties agree that any such modification, restriction or excision may be
accomplished by their mutual written agreement or, alternatively, by disposition of a court or
other tribunal.

     20. Entire Agreement/Integration. This Agreement constitutes the sole and entire
agreement between Executive and the Company with respect to the subjects addressed in it, and
supersedes all prior or contemporaneous agreements, understandings, and representations, oral and
written, with respect to those subjects.

     21. No Waiver By the Company. No waiver, modification or amendment of any of the
provisions of this Agreement shall be valid and enforceable unless in writing and executed by
Executive and the Company’s President.

-A 4-

 

     22. Successors and Assigns. This Agreement shall be binding upon, and shall inure to
the benefit of, Executive and Executive’s personal and legal representatives, heirs, devisees,
executors, successors and assigns, and the Company and its successors and assigns.

     23. Choice of Law. This Agreement and any amendments hereto shall be governed by and
construed in accordance with the laws of the State of Illinois, without regard to conflicts of
law principles.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SXC HEALTH SOLUTIONS CORPORATION	 	 	 	 	 	 
	and SXC HEALTH SOLUTIONS, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Gordon S. Glenn	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 

-A 5-

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