Document:

ex10841soadanbaty012011.htm

EX-10.84.1

 

EMERITUS CORPORATION

 

SHARED OPPORTUNITIES AGREEMENT

 

THIS SHARED OPPORTUNITIES AGREEMENT (“Agreement”) is entered into as of this 19th day of January, 2011 between EMERITUS CORPORATION, a Washington corporation (the “Company”) and DANIEL R. BATY (“Executive”).

 

RECITALS

 

A. The Company is engaged in the business of owning, leasing, operating and managing senior living communities (including independent living, assisted living and skilled nursing) as well as ancillary businesses, including therapy, home health, durable medical equipment, and hospice (“Senior Living”) in the United States and Canada.  The Company is not currently engaged in Senior Living outside the United States or Canada, but may choose to pursue such activities in the future.

 

B. Executive is the Co-Chief Executive Officer, Chairman of the Board of Directors and a principal shareholder of the Company.

 

C. Executive wishes to relinquish his position as Co-Chief Executive Officer, remain as an employee, and serve as executive Chairman of the Board of Directors and as a Director.

 

D. Executive is a managing partner in Columbia Pacific Management (“CPM”).  CPM has invested in, developed and operated through third parties, and intends to continue to invest in, develop and operate, facilities in the senior housing/assisted living space and related healthcare facilities.

 

E. The Company and Executive wish to terminate that certain Noncompetition Agreement dated September 29, 1995 between the Company and Executive in order to streamline the procedures under which Executive may pursue opportunities in Senior Living outside the Company.  Nothing in this agreement is to be construed as relieving or diminishing Executive’s duties to the Company as an officer and director under applicable law.

 

F. The parties hereto intend to be legally bound hereby.

 

NOW, THEREFORE, in consideration of the mutual promises, agreements, representations, warranties and covenants herein contained, the sufficiency and adequacy of which is acknowledged, the parties agree as follows:

 

1. Transactions in the United States and Canada

 

Executive and CPM each acknowledge that each has an affirmative obligation to immediately present to the Company all equity investment opportunities in Senior Living in the United States and Canada.  These opportunities include acquisitions, leases, management, joint venture opportunities, and development of independent living, assisted living, memory care and skilled nursing communities.  Upon notification to the Company, Executive may undertake actions necessary to complete such transactions.  With respect to such transaction, the Company will have the right to:

 

  

  

  

(i) pursue such transaction on its own or elect to co-invest with Executive in the transaction.  The Company may exercise its option to pursue the transaction or co-invest anytime during the first one hundred twenty (120) days following the date that Executive has notified the Company and provided access to due diligence materials.  In the event that the Company elects to pursue the transaction, Executive will no longer pursue such transaction, and the Company will do so on the same terms as Executive and will reimburse Executive for Executive’s third party out of pocket expenses and cost of funds at an annual interest rate of 8%; and/or

 

(ii) manage the assets and/or business that is the subject of the transaction pursuant to a management agreement, cancellable by the owner only for cause, with a minimum management fee of 5% of gross revenues and a reasonable mobilization fee for marshalling the resources to manage the assets and/or business and, if applicable, a construction management fee at prevailing market rate.  If the Company enters into a management agreement, it shall also be entitled to:

 

(iii) a first right of refusal to purchase the assets and/or business at a subsequent sale using the same methodology approved by the Company’s Independent Directors Committee for the Las Vegas community Emeritus at Spring Valley (“Spring Valley”); and

 

(iv) a participation “promote” (in addition to any return to which the Company may be entitled as an equity participant) upon the sale of the assets and/or business calculated in the same manner as was approved by the Company’s Independent Directors Committee for Spring Valley.

 

2. Transactions in China

 

In the event that Executive identifies an opportunity in Senior Living in China (“China Opportunity”), Executive shall promptly notify the Company and may undertake actions necessary to pursue and consummate the transaction(s).  The Company will have the right to:

 

(i) Notify Executive, within sixty (60) days of receiving notice, of the Company’s intention to co-invest in the China Opportunity up to 50% of the equity value; and

 

(ii) Manage, consult or otherwise provide resources upon mutually agreeable terms.

 

3. Soliciting Customers or Employees

 

Executive shall not directly or indirectly solicit or take away, or attempt to solicit or take away, any person then employed by the Company for purposes of employment by or any consulting relationship with Executive or any other person, firm, corporation, partnership, limited liability company or other entity during the term of this Agreement.

 

  

  

  

4. Remedies

 

The parties agree that legal remedies may well be inadequate to compensate for the unique losses to be suffered in the event of a breach hereof, and that the damaged party shall be entitled to seek and obtain specific performance of the terms of this Agreement, as well as all remedies permitted by law.

 

5. Effectiveness and Term

 

This Agreement shall become effective upon the date first stated above and shall remain in effect as long as Executive is an officer or director of the Company, except as may be otherwise agreed in writing by the Company.  The Company reserves the right to terminate part or all of this agreement upon six (6) months’ written notice to Executive.

 

6. Cumulative Rights; Survival

 

Each and all of the various rights, powers and remedies of the parties hereto shall be considered as cumulative with and in addition to any rights, powers or remedies of the Company and no one of them shall be deemed exclusive of the others or exclusive of any of the other rights, powers and remedies allowed by law.  The exercise or partial exercise of any right, power or remedy shall neither constitute the election thereof nor the waiver of any other right, power or remedy.

 

7. Governing Law; Attorneys’ Fees

 

This Agreement shall be governed by and construed in accordance with the laws of the state of Washington.  In the event of a dispute, the substantially prevailing party shall be entitled to recover reasonable attorneys’ fees and costs.

 

8. Disputes

 

(i) Except as expressly set forth elsewhere in this Agreement, it is mutually agreed between the parties that arbitration shall be the sole and exclusive remedy to redress any dispute, claim or controversy (thereinafter referred to as “dispute”) involving the interpretation of this Agreement or the terms or conditions.  It is the intention of the parties that the arbitration award will be final and binding and that a judgment on the award may be entered in any court of competent jurisdiction and enforcement may be had according to its terms.

 

(ii) The arbitrator shall be chosen from a list provided by the American Arbitration Association and the Arbitration shall be conducted before a single arbitrator in Seattle, Washington, pursuant to the Commercial Dispute Resolution Rules of the American Arbitration Association then in effect. Emeritus shall bear all expenses of the arbitration.  Each party shall be responsible for the costs of their own attorneys and related costs (expert witnesses, exhibits, etc.), except to the extent that the arbitrator awards attorneys’ fees as part of the arbitration decision.

 

(iii) The arbitrator shall not have jurisdiction or authority to change any provision of this Agreement by alterations of, additions to or subtractions from the terms hereof.  The arbitrator’s sole authority shall be to interpret or apply any provision(s) of this Agreement.

 

  

  

  

(iv)           The parties agree that the provisions hereof, and the decision of the arbitrator with respect to any dispute, shall be the sole and exclusive remedy for any alleged breach of this Agreement or the employment relationship.  The parties hereby acknowledge that since arbitration is the exclusive remedy, neither party has the right to resort to any federal, state or local court or administrative agency concerning breaches of this Agreement and that the decision of the arbitrator shall be a complete defense of any suit, action or proceeding instituted in any federal, state or local court before any administrative agency with respect to any dispute which is subject to arbitration as herein set forth.  The arbitration provisions hereof shall, with respect to any dispute, survive the termination or expiration of this Agreement.

 

9. Severability

 

Each provision of this Agreement shall be construed and considered separate and severable from the validity and enforceability of the other provisions hereof.  Each provision hereof shall be enforced to the fullest extent permitted by law, and any court interpreting or applying the provisions hereof is authorized and directed to narrow the scope of any invalid provision hereof to the extent necessary so that its application and enforcement will be lawful.

 

10. Titles and Headings

 

Titles and headings to sections hereof are for purposes of reference only and shall in no way limit, define or otherwise affect the provisions hereof.

 

11. Counterparts

 

This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same instrument.

 

12. Entire Agreement

 

This Agreement contains the entire agreement of the parties hereto and may be modified or amended only by a written instrument executed by all such parties.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written

 

EMERITUS CORPORATION

By: /s/ Granger Cobb

Granger Cobb

Co-CEO and President

  

  

  

EXECUTIVE

/s/ Daniel R. Baty

Daniel R. Baty

ACKNOWLEDGED AND AGREED

THIS 19th DAY OF JANUARY, 2011

COLUMBIA PACIFIC MANAGEMENT

By: /s/ Brandon Baty

      Brandon Baty                                                              

Its: PresidentExhibit 10.30  

[Epocrates Letterhead]  

May 1, 2007

Burt Podbere

Dear Burt, 

        On
behalf of Epocrates, Inc. ("Epocrates" or the "Company"), I am pleased to offer you the full-time position of Vice President and Corporate Controller. The terms and
conditions of your new position and employment relationship with the Company are as set forth below: 

	1.
	Position and Work Schedule. 

        a.     You
will become the Vice President and Corporate Controller for the Company. You will report directly to the S.V.P., Finance and CFO and work out of the Company's
corporate headquarters in San Mateo, California. This is a full-time position. 

        b.     You
agree to the best of your ability and experience that you will at all times conscientiously perform all of the duties and obligations required of you to the
satisfaction of the Company. During the term of your employment, you further agree that you will devote your full business time and attention to the business of the Company, the Company will be
entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or
organization, or engage in self-employment, whether or not for compensation, without the prior written consent of the Company, and you will not directly or indirectly engage or participate
in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange
for honoraria or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a
national stock exchange.  

	2.
	Start Date.    Subject to fulfillment of any conditions imposed by this letter agreement, you will
commence this new position with the Company on May 7, 2007 or any other mutually agreeable date (the "Start Date").

	3.
	Proof of Right to Work.    For purposes of federal immigration law, you will be required to provide
to the Company documentary proof of your identity and eligibility for employment in the United States. This offer of employment is contingent upon such satisfactory proof.

	4.
	Compensation.

        a.     Base Salary.    Your initial base salary will be payable in semi monthly installments of $7,500 pursuant to the
Company's regular payroll policy, which equates to an annual base salary of $180,000. Because your position is classified as exempt, you will not be eligible for overtime premiums or additional
compensation. Your base salary may be reviewed annually as part of the Company's normal salary review process. Any changes to your base salary are at the Company's sole discretion. 

        b.     Bonus Compensation.    You will be eligible to participate in the 2007 Executive Bonus Plan (the "Bonus Plan"),
pursuant to the terms and conditions of the Bonus Plan. Your target bonus will be 15% of your 2007 earnings, and the actual bonus paid will be based upon the Company's performance (as determined by
the Company) against bookings, revenue and EBITDA targets established by the Board of Directors. The Company must achieve at least 90% of bookings and revenue targets to qualify for any payout under
the Plan. The maximum upside under the Bonus Plan is 150% payout at 120% of target of each metric. You must remain employed during the entire year to earn and be eligible to receive a bonus under the
Bonus Plan; no prorated bonus will be earned for any partial year worked. Whether a bonus has been earned under the Bonus Plan, and the amount of any earned bonus, will be determined by the Company
and approved by the Board of Directors within its sole discretion. 

	5.
	Stock Option.    In connection with the commencement of your employment, the Company will recommend
that the Board of Directors (the "Board") grant you an option to purchase fifty thousand (50,000) shares of the Company's Common Stock ("Shares") under the Company's Stock Plan (the "Plan") with an
exercise price equal to the fair market value on the date of the grant as determined by the Board (the "Option"). The Option will be subject to the terms of the Plan and your individual Stock Option
Agreement with the Company, which shall include the following vesting schedule for the Shares: 1/4th of the Shares shall vest on the first annual anniversary of the vesting commencement date,
and 1/48th of the Shares shall vest monthly thereafter over the next three years. Vesting will, of course, depend on your continued service with the Company, as defined by the Plan. The Option
will be an incentive stock option to the maximum extent allowed by the tax code. Notwithstanding the foregoing, the Shares are eligible for accelerated vesting under certain circumstances as provided
in Section 11 hereof.

	6.
	Benefits.    Subject to the terms, conditions and limitations of the benefit plans, you will be
eligible to participate in the Company's standard employee benefits currently consisting of short/long term disability, medical, dental, and vision insurance benefits. Eligibility for participation in
these group benefits will become effective the first of the month following your Start Date. Subject to the terms of the Company's vacation policy and practice, you will accrue vacation at the annual
rate of fifteen (15) days during your first twelve (12) months of employment. Further details about benefits are available for your review. Epocrates may modify compensation and benefits
from time to time at its discretion.

	7.
	Employee 401(k) Plan.    You will be eligible to participate in Epocrates' 401(K) plan beginning on
the first of the month following your Start Date. Employees who choose to participate will have pre-tax dollars deposited into their 401(K) account and the money will be directed to
specified investment options. Epocrates does not match funds or make contributions.

	8.
	Confidential Information and Invention Assignment Agreement.    Your acceptance of this offer and
commencement of employment with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company's Confidential Information and Invention Assignment Agreement
(the "Confidentiality Agreement"), a copy of which is enclosed for your review and execution, prior to or on your Start Date. You are also required to abide by the Confidentiality Agreement as a
condition of your employment. In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to
whom you have an obligation of confidentiality. Rather, you may use only that information generally known and used by persons with training and experience comparable to your own, which is common
knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company, or developed by you on behalf of the Company. You agree that you will
not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality. You represent further that you
have disclosed to the Company any contract you have signed that may restrict your activities on behalf of the Company.

	9.
	Company Policies.    As a condition of your employment, you will be expected to abide by the
Company policies and procedures, and acknowledge in writing that you have read and will comply with the Company's Employee Handbook.

	10.
	At-Will Employment.    Your employment with the Company will be on an "at will" basis,
meaning that either you or the Company may terminate your employment at any time, with or without cause, and with or without advance notice. Your employment at-will status can only be
modified in a written agreement signed by you and by an officer of the Company.

	11.
	Double Trigger Change in Control Acceleration and Severance:    If (A) the Company
consummates a change of control merger or acquisition transaction (not including any initial public offering of the Company's securities) whereby the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after the closing of the qualifying transaction, securities representing less than fifty percent (50%) of the voting stock of the Company or
other entity 

surviving
such transaction, and (B) within twelve (12) months after consummation of such transaction, your employment is either (i) terminated by the Company or a successor entity
without Cause (as defined in Paragraph 12 of this letter), or (ii) terminated by you due to your resignation for Good Reason (as defined in Paragraph 12 of this letter), if the
Good Reason upon which your resignation is based occurs subsequent to and as a result of such transaction, then (x) the Shares (and the shares subject to any future option grants) will be
subject to the Acceleration (as defined in Paragraph 12 of this letter), and (y) you will be eligible to receive, as your sole severance benefits, severance pay for six
(6) months, less required deductions and withholdings, in the form of continuation of your base salary in
effect as of the employment termination date paid on the Company's standard payroll dates (beginning with the first payroll date following the effective date of the required release of claims) (the
"Severance"). In order to be eligible to receive the Acceleration and the Severance, you must first sign, date, and deliver to the Company a general release of all known and unknown claims in the form
provided to you by the Company and allow it to become effective.  

	12.
	Definitions.

        a.     Definition of Acceleration.    The
"Acceleration" shall mean additional vesting of the Shares (and the shares subject to any future option grants) in an amount equal to the number of
shares that would vest in twelve (12) months, or the remaining number of vested shares subject to each such option, whichever is less. 

        b.     Definition of Cause.    "Cause" shall
mean any of the following conduct by you: (i) embezzlement, misappropriation of corporate funds, or other material acts of dishonesty; (ii) commission or conviction of any felony, or of
any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any felony or misdemeanor; (iii) engagement in any activity that you know or should know could
materially harm the business or reputation of the Company; (iv) material failure to adhere to the Company's corporate codes, policies or procedures as in effect from time to time;
(v) material violation of any statutory, contractual, or common law duty or obligation to the Company, including, without limitation, the duty of loyalty; (vi) material breach of the
Confidentiality Agreement; or (vii) repeated failure, in the reasonable judgment of the Company, to substantially perform your assigned duties or responsibilities after written notice from the
Company describing the failure(s) in reasonable detail and your failure to cure such failure(s) within thirty (30) days of receiving such written notice. 

        c.     Definition of Good Reason.    "Good
Reason" shall mean any of the following which occurs without your written consent: (i) a relocation of your assigned office more than thirty-five
(35) miles; (ii) a material decrease in your base salary (except for salary decreases generally applicable to the Company's other employees at the Vice President or higher level); or
(iii) a material reduction in the scope of your duties or responsibilities.  

	12.
	Complete Agreement.    This letter, together with your Confidentiality Agreement, forms the
complete and exclusive statement of your employment agreement with the Company. The terms in this letter supersede any other agreements or promises made to you by anyone, whether oral or written.
Other than those changes expressly reserved to the Company's discretion in this letter, this letter agreement cannot be changed except in a written agreement signed by you and a duly authorized
officer of the Company. 

        We
are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter in the
space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. 

        This
offer is valid until May 4, 2007 and is contingent on the succesful completion of a background check. 

 

 

					
	Very truly yours,

Epocrates, Inc.
	 	 	 	 	 
	John S. Owens

Vice President

Human Resources	 	 	 	 
	 	 	 	 	 
	 UNDERSTOOD, ACCEPTED AND AGREED:
	 	 	 	 	 
	/s/ BURT PODBERE

  Signature	 	 	 	 
	 	 	 	 	 
	5/3/07

  Date	 	 	 	 
	 	 	 	 	 
	5/7/07

  Start Date	 	 	 	 

 

 Enclosure:
Confidentiality Agreement 

 [Epocrates Letterhead]  

September 22, 2010 

VIA
HAND DELIVERY 

Burt
Podbere

Epocrates, Inc.

1100 Park Place, Suite 300

San Mateo, CA 94403 

	Re:
	New Employment Terms  

Dear Burt: 

As
we have discussed, this letter agreement confirms an amendment (the "Amendment") to the terms of your employment offer letter with
Epocrates, Inc. (the "Company") dated May 1, 2007 (the "Offer Letter") associated with
your recent promotion and title change. The new employment terms contained in this Amendment are effective as of August 1, 2010 (the "Effective
Date"). 

The
Amendment is as follows: 

1.     The following becomes Section 1(a) of the Offer Letter.  

	a.
	Your
position is Vice President Finance and Chief Accounting Officer. You will report directly to the Company's Chief Financial Officer and work out of the
Company's corporate headquarters in San Mateo, California. This is a full-time position. 

2.     The following becomes Section 4 of the Offer Letter.  

        a.    Base Salary.    Your base salary will be payable in semi monthly installments of
$9,341.66, pursuant to the Company's regular payroll policy, which equates to an annual base salary of $224,200. Because your position is classified as exempt, you will not be eligible for overtime
premiums or additional compensation. Your base salary may be reviewed annually as part of the Company's normal salary review process. Any changes to your base salary are at the Company's sole
discretion. 

        b.    Bonus Compensation.    You will be eligible to participate in the 2010 Executive Bonus
Plan (the "Bonus Plan"), pursuant to the terms and conditions of the Bonus Plan. Your target bonus will be thirty-five percent (35%) of your
2010 base salary paid by the Company, and the actual bonus paid will be based upon the Company's performance (as determined by the Company) against the Bonus Plan. You must remain employed during the
entire year to earn and be eligible to receive a bonus under the Bonus Plan. Whether a bonus has been earned under the Bonus Plan, and the amount of any bonus earned, will be determined by the Company
and approved by the Board of Directors within its sole discretion. Any bonus earned is to be paid in the following calendar year as provided in the Bonus Plan.  

	3.
	The following becomes the new third and fourth sentences of Section 6 (Benefits) of the Offer Letter (replacing and
superseding the current third sentence): "Regular full-time and part-time exempt employees do not accrue vacation, sick leave, or other paid time off,
and there is no set guideline on how much time off employees will be permitted to take. Under the terms of the Company's paid time off policy for exempt employees, you will be permitted to take a
reasonable amount of time off with pay, as permitted by your duties and responsibilities, and as approved in advance by your manager." 

4.     The following becomes Section 11 of the Offer Letter.  

11.    Severance Benefits Not In Connection With A Change of Control.    If, at any time other than during
the twelve (12) months following the consummation of a Change of Control (as defined in Section 12 herein), the Company or any successor entity terminates your employment without 

 

Cause
(as defined herein), and if you first sign, date, and deliver to the Company a separation agreement that includes a general release of all known and unknown claims in the form provided to you by
the Company (the "Release") and allow the Release to become effective, then you will receive the following as your sole severance benefits (the
"Severance Benefits"): (i) severance pay equal to six (6) months of your base salary in effect as of the termination date, less required
deductions and withholdings, paid in the form of salary continuation on the Company's standard payroll dates (beginning with the first payroll date following the effective date of the Release); and
(ii) provided that you timely elect continued group health insurance coverage through federal COBRA law or comparable state law (collectively,
"COBRA"), the Company will pay your COBRA premiums sufficient to continue your group health insurance coverage at the same level in effect as of your
termination date for six (6) months after your termination or until you become eligible for group health insurance coverage through a new employer, whichever occurs first. 

For
purposes of this letter agreement, "Cause" means any of the following conduct by you: (i) embezzlement, misappropriation of corporate funds,
or other material acts of dishonesty; (ii) the conviction, plea of guilty, or nolo contendere to any felony (not involving the operation of a motor vehicle), or of any misdemeanor involving
moral turpitude; (iii) engagement in any activity that you know or should know could materially harm the business or reputation of the Company, provided that this subsection (iii) shall
not apply to any activity done in a good faith belief by you that the action taken or omission was in the best interest of the Company; (iv) material violation of any statutory,
contractual, or common law duty or obligation owed by you to the Company, including, without limitation, the duty of loyalty which causes demonstrable injury to the Company; (v) material breach
of the Confidentiality Agreement; or (vi) repeated failure, in the reasonable judgment of the Company, to substantially perform your assigned duties or responsibilities after written notice
from the Company describing the failure(s) in reasonable detail and your failure to cure such failure(s) within thirty (30) days of receiving such written notice, provided that written notice
only must be provided if the failure(s) are capable of cure. 

5.     The following becomes Section 12 of the Offer Letter.  

12.    Change of Control Severance Benefits.    In the event that: (i) the Company consummates a
change of control transaction, whereby fifty percent (50%) or more of the voting stock of the Company changes ownership pursuant to such transaction (a "Change of
Control"); and (ii) within twelve (12) months after the consummation of a Change of Control, your employment with the Company is either (a) terminated by
the Company or successor entity without Cause (as defined in Section 11 herein), or (b) terminated by you for Good Reason (as defined in and in accordance with the paragraph below); and
(iii) you sign, date, and deliver to the Company the Release and allow it to become effective; then you will receive the following as your sole severance benefits (the
"Change of Control Severance Benefits"): (a) severance pay equal to nine (9) months of your base salary in effect as of the termination
date, less required deductions and withholdings, paid in the form of salary continuation on the Company's standard payroll dates (beginning with the first payroll date following the effective date of
the Release); (b) provided that you timely elect continued group health insurance coverage through COBRA, the Company will pay your COBRA premiums sufficient to continue your group health
insurance coverage at the same level in effect as of your termination date for nine (9) months after your termination or until you become eligible for group health insurance coverage through a
new employer, whichever occurs first; and (c) any unvested shares subject to any option grants held by you as of the employment termination date will become vested and exercisable, effective as
of the employment termination date. 

For
purposes of this Section 12, "Good Reason" shall mean one or more of the following conditions that arose upon or following the consummation
of the Change of Control without your written consent: (i) a relocation of your assigned office which results in an increase in your 

2

 

one-way
commuting distance by more than thirty-five (35) miles; (ii) a material decrease in your base salary (except for salary decreases generally applicable to
the Company's other executive employees); or (iii) a material reduction in the scope of your duties or responsibilities from your duties and responsibilities in effect immediately prior to the
Change of Control. Notwithstanding the foregoing, you shall not be deemed to have terminated your employment for "Good Reason" unless (i) such termination occurs within ninety (90) days
following the initial existence of one or more of the conditions that constitute Good Reason (as defined herein), (ii) you provide written notice to the Company (or any successor entity) of the
existence of the Good Reason condition
within thirty (30) days following the initial existence of the condition, and (iii) the Company (or its successor entity) fails to cure such condition within a period of thirty
(30) days following such written notice. 

6.     The following becomes Section 13 of the Offer Letter.  

13.    Parachute Payments.    In the event that the benefits provided for in this letter agreement or
otherwise payable to you ("Payment") would constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code") and, but for this sentence, would be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then such Payment shall be equal to the Reduced Amount. The "Reduced Amount" shall be
either (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (ii) the largest portion, up to and including the total,
of the Payment, whichever of the foregoing amounts, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest
applicable marginal rate), results in the receipt by you, on an after-tax basis, of the greater amount of the Payment, notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. Unless the Company and you otherwise agree in writing, the determination of your Excise Tax liability shall be made in writing by the accounting firm engaged by the Company
for general audit purposes as of the day prior to the effective date of the Change of Control (the "Accountants"). If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder. For purposes of making the calculations required by this Section 13, the Accountants may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. Any good faith determinations of the Accountants made hereunder
shall be final, binding, and conclusive upon the Company and you. The Company and you shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order
to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 13. To the
extent that any elimination in or reduction of payments or benefits is made under this Section 13, the order in which payments and benefits shall be reduced shall be made by the Accountants in
a manner that shall provide you with the greatest economic benefit, but if more than one manner of reduction of payments and benefits necessary to arrive at the Reduced Amount yields the greatest
economic benefit to you, then the payments and benefits shall be reduced pro rata. 

7.     The following becomes Section 14 of the Offer Letter.  

14.    Deferred Compensation.    Severance payments made pursuant to Section 11 or Section 12,
to the extent of payments made from the date of your termination through March 15 of the calendar year following your termination, are intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the "short-term deferral" rule set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations. To the extent such 

3

 

payments
are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an
involuntary termination from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by such provision, with any
excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i)
of the Code that payment be delayed until six (6) months after separation from service if you are a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code at the
time of such separation from service. Notwithstanding anything to the contrary set forth herein, if any payments and benefits provided under this Agreement constitute "deferred compensation" within
the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively
"Section 409A") (i) such payments and benefits shall not commence in connection with your termination of employment unless and until you
also have incurred a "separation from service" (as such term is defined in Treasury Regulations Section 1.409A-1(h)), unless the Company reasonably determines that such amounts may
be provided to you without causing you to incur the adverse personal tax consequences under Section 409A, and (ii) the Release required by Sections 11 and 12 above shall be
considered effective only as of the latest permitted effective date for such Release if such Release could become effective in the calendar year following the calendar year in which your employment
termination occurs. 

Except
as modified herein, all other terms of the Offer Letter shall remain in full force and effect. 

This
Amendment, together with the Offer Letter and the Confidentiality Agreement, constitutes the entire agreement between you and the Company regarding the terms of your employment. It supersedes any
prior statements, representations or promises made to you concerning the subjects contained in this Amendment and the Offer Letter, and only can be modified in a writing signed by you and a duly
authorized director or officer of Epocrates. 

Please
sign below if these terms are acceptable to you, and return the fully signed Amendment to me within five (5) business days. 

Understood and Agreed:  

 

 

			
	/s/ John Owens

  John Owens

Senior Vice President

Human Resources

Epocrates, Inc.	 	/s/ Burt Podbere

  Burt Podbere

Vice President Finance and

Chief Accounting Officer

Epocrates, Inc.
	
 9/22/10

  Date	
 	
9-23-10

  Date

 

 4

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