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September 19, 2000
Personal and Confidential
Mr. Alvin Clemens
HealthAxis.com, Inc.
2500 DeKalb Pike
East Norriton, PA 19401
Dear Al:
The Compensation Committee of the HealthAxis.com ("HA") Board of
Directors met following the conclusion of the full Board meeting to consider
your compensation and position with HA. We discussed your participation in the
creation of HA and your contributions and efforts to get HA to where it is
today. The Compensation Committee discussed the current arrangement whereby it
appears HA may be party to a joint agreement and several employment agreements
with another company ("HAI") and the various issues, problems and potential
defaults that arrangement creates for HA.
The Compensation Committee was pleased to recommend to the HA Board and
the HA Board approved the following compensation arrangement with respect to
your role as Chairman of the Board of HA. This recommendation is subject to
reaching a satisfactory arrangement with HAI effectuating a termination of any
and all existing employment arrangements and agreements with HA, subject to HA
obtaining a full and complete release and discharge from any liability or
responsibility arising from any such employment agreement from both you and from
HAI and, with respect to the office and benefits sections below, subject to
effectuating the merger with HAI.
Compensation: Effective upon termination and release from the existing HAI
employment agreement, you will begin to receive an annual
salary on an at-will basis of $100,000 retrospective to August
16, 2000.
Position: Chairman of the Board of Directors (non-executive position)
Bonus: The Compensation Committee will consider on a subjective basis
the value and contributions you have contributed to HA during
the previous year and recommend to the Board what sort of
additional compensation you should receive in the form of a
bonus for such contributions and efforts.
Office: HA will provide you with an office and with secretarial
support consistent with the level it provides other senior
executives of the company until you have reached the age of
65.
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Mr. Alvin Clemens
August 8, 2000
Page 2 of 3
Benefits: You will be entitled to participate in all health and similar
benefit plans currently available to other senior employees at
HA. HA agrees, subject to the merger with HAI becoming
effective, to provide you with standard health insurance to
you and your family until the earlier to occur of (i) June 30,
2005, (ii) from and after June 30, 2000, you receive in cash
compensation $2.125 million (or stock equivalent equal to that
amount) from HAI and/or HA.com., or (iii) from or after
December 31, 2000, you receive more than $10 million cash from
the sale of HAI or HA.com stock. Additionally, HA.com agrees
to recommend to HAI and to support the extension of the term
of 397,198 stock options on HAI stock for an additional 3
years. Lastly, again from and after the merger is effective
with HAI, HA will agree to compensate you for the lease of
your existing vehicle through March 31, 2002.
Al, it has been a pleasure working with you to bring HealthAxis to its
current position. Obviously, these are trying and difficult times as we try to
put together a merger of HA with HAI and try to bring closure to a number of
vexing and difficult economic and organizational problems and challenges. You
have served HA as Chairman and we look forward to working with you and the rest
of the management team to move HealthAxis forward and creating shareholder value
for all of us.
Very Truly Yours,
/s/ Gregory T. Mutz
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Gregory T. Mutz
Chairman of the Compensation Committee
HealthAxis.com, Inc.
Accepted and agreed to subject to the conditions provided herein this 20 day of
September, 2000.
/s/ Alvin H. Clemens
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Alvin H. Clemens
GTM/dkw
cc: Henry Hager
Pat McLaughlin
Board of Directors, HealthAxis.com, Inc.
