e10-ka

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference into Part III of this Form 10-K or any amendment to this Form 10-K. o

The aggregate market value of the voting stock held by non-affiliates of the registrant (based upon the closing sale price of $8.17 on March 15, 2002, as reported on the Nasdaq Stock Market’s National Market and, for purposes of this computation only, the assumption that all of the registrant’s directors and executive officers are affiliates) was approximately $2,325,775,845. As of March 15, 2002, the registrant had outstanding 312,383,902 shares of common stock.

Pursuant to General Instruction G(3) to the Annual Report on Form 10-K, the information regarding our executive officers required by Item 401 of Regulation S-K is included in Part I of this report. The following table sets forth information regarding our current directors:


(1)	Member of the Executive Committee
(2)	Member of the Compensation Committee
(3)	Member of the Audit Committee

Martin J. Wygod has served as Chairman of the Board of Directors of WebMD since March 2001, as our Chief Executive Officer since October 2000 and as a director since September 2000. From September 2000 until October 2000, Mr. Wygod served as Co-Chief Executive Officer of WebMD. From May 1989 until September 2000, Mr. Wygod was Chairman of the Board and a director of Medical Manager Corporation and its predecessor, Synetic, Inc. For part of that time, he was also Chief Executive Officer of Medical Manager. He also served as Chairman of the Board of CareInsite, Inc. from 1999 until September 2000. He is also engaged in the business of racing, boarding and breeding thoroughbred horses, and is President of River Edge Farm, Inc.

Mark J. Adler, M.D., has served as a director of WebMD since September 2000. He served as a director of CareInsite from 1999 until September 2000. Dr. Adler is an oncologist and has been medical director of the San Diego Cancer Center since he founded it in 1991 and is a director of the San Diego Cancer Research Institute. He is also currently President and Chief Executive Officer of the internal medicine and oncology group of Medical Group of North County, which is based in San Diego, California.

Paul A. Brooke has served as a director of WebMD since November 2000. Mr. Brooke has been the managing member of PMSV Holdings LLC, a private investment firm, since 1993 and a venture partner of MPM Bioventures, a venture capital firm specializing in the healthcare industry, since 1997. Mr. Brooke has also been an advisory director to each of Morgan Stanley and Skyline Partners since April 2000. From 1983 until April 1999, Mr. Brooke was a Managing Director and the Global Head of Healthcare Research and Strategy at Morgan Stanley. From April 1999 until May 2000, he was a Managing Director at Tiger Management LLC.

L. John Doerr has served as a director of WebMD since July 1997. He has been a general partner at Kleiner Perkins Caufield & Byers, or KPCB, a venture capital firm, since 1980. Prior to joining KPCB, Mr. Doerr worked at Intel Corporation for five years. He is also a director of Amazon.com, Inc., an online merchant, Drugstore.com, Inc., an online personal healthcare retailer, Handspring, Inc., a maker of handheld personal computers, Homestore.com, Inc., a web-based home-related information company, Intuit Inc., a financial software company, and Sun Microsystems, Inc., a computer software company.

James V. Manning has served as a director of WebMD since September 2000. He served as a director of CareInsite from 1999 until September 2000. Mr. Manning was Vice Chairman of the Board of Medical Manager and its predecessor, Synetic, from March 1998 to July 1999, was its Chief Executive Officer from January 1995 to March 1998, was its President from July 1996 to March 1998 and, until March 1998, was an executive officer for more than five years. Until December 1994, Mr. Manning had been an executive officer of Medco for more than five years. Mr. Manning is also Chairman of the Board of Group 1 Software, Inc., a computer software company.

Herman Sarkowsky has served as a director of WebMD since November 2000. Mr. Sarkowsky has been President of Sarkowsky Investment Corporation, a private investment company, for more than five years. Mr. Sarkowsky also served as a director of Medical Manager and its predecessor, Synetic, from 1989 until September 2000.

Michael A. Singer has served as a member of the Office of the President of WebMD since September 2001 and as Chief Executive Officer and President, WebMD Medical Manager and as a director of WebMD since September 2000. He served as a director of CareInsite from 1999 until September 2000. Mr. Singer was Vice Chairman and Co-Chief Executive Officer of Medical Manager from July 1999 until September 2000. Mr. Singer was Chairman of the Board and Chief Executive Officer of Medical Manager Health Systems, Inc., then known as Medical Manager Corporation, and its predecessors for more than five years prior to July 1999.

Joseph E. Smith has served as a director of WebMD since September 2000. Mr. Smith was a director of CareInsite from 1999 until September 2000. Mr. Smith served in various positions with Warner-Lambert Company, a pharmaceutical company, from March 1989 to September 1997, most recently as Corporate Vice President and a member of the Office of the Chairman and the firm’s Management Committee. Mr. Smith is a director of Boren, LePore and Associates, Inc., a pharmaceutical services company. He also serves on the Board of Trustees of the International Longevity Center, a non-profit organization.

The terms of Messrs. Doerr and Smith will expire at our annual meeting in 2002, the terms of Messrs. Brooke, Manning and Wygod will expire at our annual meeting in 2003 and the terms of Dr. Adler and Messrs. Sarkowsky and Singer will expire at our annual meeting in 2004.

No family relationship exists among any of our directors or executive officers. No arrangement or understanding exists between any director or executive officer and any other person pursuant to which any director was selected as a director or executive officer of WebMD, except that Messrs. Manning, Singer, Smith and Wygod and Dr. Adler were originally appointed as directors in connection with the merger transactions in September 2000 involving WebMD, Medical Manager and CareInsite.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership of these securities with the SEC. Officers, directors and greater than ten percent beneficial owners are required by applicable regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of the forms furnished to us, all of our directors and officers subject to the reporting requirements and each beneficial owner of more than ten percent of our common stock satisfied all applicable filing requirements, except that Herman Sarkowsky filed an amended Form 3 to reflect the fact that he owned, at the time he became a director of WebMD, 21,000 more shares than previously reported.

The following table sets forth information concerning the compensation earned for services rendered to WebMD by the “named executive officers.” The named executive officers are our chief executive officer and our five other most highly compensated executive officers who earned more than $100,000 in 2001 and were serving as executive officers at the end of 2001. Also included in this table is information concerning one individual for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of 2001.

In accordance with the rules of the SEC, this table does not include certain perquisites and other benefits received by the named executive officers, which do not exceed the lesser of $50,000 or 10% of any officer’s salary and bonus disclosed in this table.


(1)	Mr. Wygod’s annual salary was increased to $1.4 million per year, effective as of October 1, 2001. See “Compensation Agreements with Executive Officers — Arrangements with Martin J. Wygod” below.


(2)	Messrs. Wygod, Cameron, Holstein, Mele, Singer and Vuolo were not employed by us prior to our mergers with Medical Manager and CareInsite on September 12, 2000. As a result, only compensation that we paid to those executive officers beginning on that date is reflected in this table.


(3)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 3,000,000 shares of our common stock at an exercise price of $12.75 per share, 25,000 shares of our common stock at an exercise price of $10.00 per share, 25,000 shares of our common stock at an exercise price of $14.80 per share, 25,000 shares of our common stock at an exercise price of $15.50 per share, 25,000 shares of our common stock at an exercise price of $22.90 per share and 585,000 shares of our common stock at an exercise price of $13.8462 per share.

(4)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 625,000 shares of our common stock at an exercise price of $12.2125 per share, 325,000 shares of our common stock at an exercise price of $17.5481 per share, 125,000 shares of our common stock at an exercise price of $11.55 per share and 200,000 shares of our common stock at an exercise price of $12.75 per share.

(5)	Also a member of WebMD’s Office of the President.

(6)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 20,000 shares of our common stock at an exercise price of $5.20 per share, 625,000 shares of our common stock at an exercise price of $12.90 per share, 625,000 shares of our common stock at an exercise price of $13.95 per share, 234,000 shares of our common stock at an exercise price of $13.8462 per share and 750,000 shares of our common stock at an exercise price of $11.55 per share.

(7)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 75,000 shares of our common stock at an exercise price of $5.80 per share, 487,500 shares of our common stock at an exercise price of $12.90 per share, 212,500 shares of our common stock at an exercise price of $14.75 per share, 208,000 shares of our common stock at an exercise price of $13.8462 per share, 187,500 shares of our common stock at an exercise price of $18.20 per share, 97,500 shares of our common stock at an exercise price of $34.2308 per share, 625,000 shares of our common stock at an exercise price of $11.55 per share and 200,000 shares of our common stock at an exercise price of $12.75 per share.

(8)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 1,625,000 shares of our common stock at an exercise price of $28.55 per share and 1,125,000 shares of our common stock at an exercise price of $11.55 per share.

(9)	Does not include options to purchase shares of Medical Manager or CareInsite common stock that we assumed in our mergers with Medical Manager and CareInsite and that were converted in those mergers into options to purchase 100,000 shares of our common stock at an exercise price of $4.60 per share, 312,500 shares of our common stock at an exercise price of $4.00 per share, 77,500 shares of our common stock at an exercise price of $12.90 per share, 125,000 shares of our common stock at an exercise price of $13.95 per share, 125,000 shares of our common stock at an exercise price of $14.75 per share, 97,500 shares of our common stock at an exercise price of $13.8462 per share, 187,500 shares of our common stock at an exercise price of $18.20 per share, 97,500 shares of our common stock at an exercise price of $34.2308 per share, 625,000 shares of our common stock at an exercise price of $11.55 per share and 200,000 shares of our common stock at an exercise price of $12.75 per share.


(10)	Ms. Fili-Krushel resigned in July 2001.

(11)	The amount of Ms. Fili-Krushel’s bonus reflects the portion attributable to 2001.

(12)	Represents amount that we paid to Ms. Fili-Krushel pursuant to a letter agreement that we entered into with Ms. Fili-Krushel in connection with her resignation as our Chief Executive Officer,


	Consumer Sales and Services. For more information, see “Compensation Arrangements with Executive Officers — Arrangements with Patricia Fili-Krushel” below.


(13)	Ms. Fili-Krushel was not employed by us prior to April 10, 2000. As a result, only compensation that we paid to Ms. Fili-Krushel beginning on that date is reflected in this table. The amount of Ms. Fili-Krushel’s bonus reflects the portion attributable to 2000.

The following table presents information concerning the options to purchase our common stock granted during the fiscal year ended December 31, 2001 to our named executive officers.


(1)	Based upon the total number of options that we granted to our employees during 2001.

(2)	The estimated grant date present value reflected in the above table is determined using the Black-Scholes model. The material assumptions and adjustments incorporated in the Black-Scholes model in estimating the value of the options reflected in the above table include the following: (a) the respective option exercise prices, (b) the exercise of options within three and one-half years of the date that they become exercisable, (c) a risk-free interest rate of 3.04% per annum and (d) volatility of 0.9. The ultimate values of the options will depend on the future market price of our common stock, which cannot be forecast with reasonable accuracy. The actual value, if any, an optionee will realize upon exercise of an option will depend on the excess of the market value of our common stock over the exercise price on the date the option is exercised. We cannot assure you that the value realized by an optionee will be at or near the value estimated by the Black-Scholes model or any other model applied to value the options.

(3)	These options vest and become exercisable at the rate of 1/3 per year beginning on the first anniversary of the date of grant.

The following table sets forth information with respect to the named executive officers concerning exercisable and unexercisable options held as of December 31, 2001. The values of in-the-money options are based on the year-end closing price of our common stock as of December 31, 2001 of $7.06 and are net of the option exercise price.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values


(1)	Value realized upon exercise on July 24, 2001 of options to purchase 20,000 shares of our common stock.

Our directors do not receive any cash fees for their service on our Board of Directors or any Board committee, but they are entitled to reimbursement for all reasonable out-of-pocket expenses incurred in connection with their attendance at Board and Board committee meetings. All Board members are eligible to receive stock options under our 2000 Long-Term Incentive Plan and our 1996 Stock Plan, and outside directors receive stock options pursuant to automatic grants of stock options under our 2000 Long-Term Incentive Plan annually on January 1. The options to purchase common stock of Medical Manager or CareInsite issued to those of our directors who previously were directors of those companies were converted into options to purchase WebMD common stock at the time of WebMD’s merger transactions with those companies.

Each of Messrs. Brooke, Doerr, Manning, Sarkowsky and Smith and Dr. Adler and two of our former directors, Dennis B. Gillings and Charles G.V. Stevens, received an automatic grant of options to purchase 20,000 shares of WebMD common stock, with an exercise price equal to $7.9375 per share, in January 2001 and an additional grant of options to purchase 20,000 shares of WebMD common stock, with an exercise price equal to $3.43 per share, in September 2001. The options granted to Dr. Gillings and Mr. Stevens were cancelled when they resigned from our Board of Directors on October 8, 2001 and October 22, 2001, respectively.

In October 2001, we entered into a five-year employment agreement with Martin J. Wygod. The employment agreement provides that Mr. Wygod will be Chairman and Chief Executive Officer of WebMD. Given that WebMD satisfied the performance threshold described in the employment agreement, Mr. Wygod’s annual base salary increased to $1.4 million, effective as of October 1, 2001.

In the event of termination of Mr. Wygod’s employment by us without “cause” or by Mr. Wygod for “good reason,” as those terms are defined in his employment agreement, Mr. Wygod would become a consultant for us and would be entitled to receive his salary (the greater of his actual salary and the $1.4 million) and continuation of benefits for the longer of two years and the expiration of the term of the employment period. In addition, all options, or other forms of equity compensation, granted to Mr. Wygod which have not vested prior to the date of termination would be vested as of the date of termination and, assuming there has not been a “change in control” (as defined in the employment agreement), would continue to be exercisable for so long as he remains a consultant (or longer if the plan or agreement expressly provided). In the event that Mr. Wygod’s employment is terminated due to death or disability,

The employment agreement provides that in the event of a “change in control” (as defined in the employment agreement, which definition includes certain business combination transactions) of WebMD all outstanding options and other forms of equity compensation would become immediately vested on the date of the change in control and, if following the change in control, Mr. Wygod’s employment terminates for any reason other than cause, they will continue to be exercisable until the tenth anniversary of the applicable date of grant. A change in control is also an event that constitutes “good reason” for purposes of a termination by Mr. Wygod.

The employment agreement contains confidentiality obligations that survive indefinitely, and nonsolicitation and noncompetition obligations that continue until the second anniversary of the date his employment has ceased.

The employment agreement contains a tax gross-up provision relating to any excise tax that Mr. Wygod incurs by reason of his receipt of any payment that constitutes an excess parachute payment as defined in Section 280G of the Internal Revenue Code.

We are party to an employment agreement with Kevin Cameron, Executive Vice President — Business Development and Member of the Office of the President, which provides for an employment period through April 4, 2005. Mr. Cameron is currently on medical leave from our company.

In the event of the termination of Mr. Cameron’s employment by us “without cause” or by him for “good reason”, as those terms are defined in Mr. Cameron’s employment agreement, he would be entitled to a continuation of his base salary ($450,000 per year) for twelve months. In addition, 20% of the stock options granted to Mr. Cameron in connection with his initial employment would remain outstanding and continue to vest and become exercisable as if he remained in our employ through the next scheduled vesting date of each option. Any shares that vested on or prior to the date of termination will remain outstanding for three years from the date of termination and any shares that vest after the date of termination will remain outstanding for three years from the date of such vesting. The option granted on August 21, 2000 would be deemed fully vested and remain outstanding through the tenth anniversary of the date of grant. A change in control (as defined in the employment agreement) is an event that constitutes good reason. A “change in control” only occurs if there is a business combination and Martin J. Wygod is no longer either the Chairman of the Board or a senior executive officer of the acquiring company with responsibilities substantially equivalent to the responsibilities that he had prior to the change in control. Our mergers with Medical Manager and CareInsite were expressly excluded from the definition of a change in control.

In the event of the termination of Mr. Cameron’s employment due to his death or disability, he would be entitled to a continuation of his base salary for twelve months. In addition, his stock options would immediately vest on the date of termination and would remain exercisable for the period specified in the applicable option agreement.

If Mr. Cameron’s employment is terminated by us for cause or by him without good reason, he is not entitled to any further compensation or benefits. In addition, Mr. Cameron would not be entitled to any additional rights or vesting with respect to the stock options following the date of termination.

The employment agreement contains confidentiality obligations, which survive indefinitely and non-solicitation and non-competition obligations that end on the first anniversary of the date employment has ceased.

We are party to an employment agreement with Roger Holstein, our Chief Executive Officer — WebMD Health and Member of the Office of the President, which provides for an employment period through November 6, 2002 and which will automatically renew for successive one month periods unless prior written notice is given. Mr. Holstein currently receives an annual base salary of $450,000.

In the event of the termination of Mr. Holstein’s employment by us “without cause” (which includes our delivery of notice of our desire not to renew the agreement) or by him for “cause”, as those terms are defined in Mr. Holstein’s employment agreement, he would be entitled to a continuation of his base salary for 24 months. In addition, all of Mr. Holstein’s options will continue to vest and remain exercisable for two years from the date of termination.

In the event of a change in control, Mr. Holstein may resign at any time after the first anniversary of a change in control and he would continue to vest in all of his options and otherwise be treated as if he remained in our employ until the last applicable vesting date with respect to each option. A “change in control” only occurs if Martin J. Wygod is no longer either the Chairman of the Board, Chief Executive Officer or a senior executive officer with responsibilities substantially equivalent to the responsibilities that he had prior to the change in control.

In the event of the termination of Mr. Holstein’s employment due to his death or disability, he would continue to vest and otherwise be treated as if he remained in our employ through the last vesting date applicable to each option grant

If Mr. Holstein’s employment is terminated by us for cause or by him without cause, he is not entitled to any further compensation or benefits. In addition, Mr. Holstein would not be entitled to any additional rights or vesting with respect to the stock options following the date of termination.

The employment agreement contains confidentiality obligations, which survive indefinitely and non-solicitation and non-competition obligations that end on the second anniversary of the date employment has ceased.

We are party to an employment agreement with Charles A. Mele, our Executive Vice President — General Counsel and Secretary, which provides for an employment period through July 1, 2006. Mr. Mele currently receives an annual base salary of $450,000 and is entitled to receive a bonus in the same form and amount received by any other executive officer with similar responsibilities and compensation.

In the event of the termination of Mr. Mele’s employment due to his death or disability, by us “without cause” or by Mr. Mele for “good reason”, as those terms are defined in Mr. Mele’s employment agreement, he would be entitled to: (i) continuation of his base salary through the later of eighteen months and the expiration of the term of the agreement; (ii) any bonuses that he would have normally been entitled to through the term of his employment agreement (the amount of the bonus for years subsequent to the year in which the termination of employment occurred will be equal to the bonus received for the year of termination) and (iii) continued participation in our benefit plans (or comparable plans) for thirty-six months. In addition, all options granted to Mr. Mele which have not vested prior to the date of termination would be vested as of the date of termination and all such options would remain exercisable as if he remained in our employ through the expiration date specified in each applicable stock option agreement. A change in control (which is defined in the employment agreement) of WebMD is an event that constitutes good reason.

If Mr. Mele’s employment is terminated by us for cause or by him without good reason, he is not entitled to any further compensation or benefits. In addition, Mr. Mele would not be entitled to any additional rights or vesting with respect to the stock options following the date of termination.

The employment agreement contains confidentiality obligations, which survive indefinitely and non-solicitation and non-competition obligations that end on the later of the second anniversary of the date employment has ceased and the last day of the term of the agreement.

The employment agreement contains a tax gross-up provision relating to any excise tax that Mr. Mele incurs by reason of his receipt of any payment that constitutes an excess parachute payment as defined in Section 280G of the Internal Revenue Code.

We are party to an employment agreement with Michael A. Singer, our President and Chief Executive Officer — WebMD Medical Manager and Member of the Office of the President, which provides for an employment period through July 23, 2004. Mr. Singer currently receives an annual base salary of $450,000.

In the event of the termination of Mr. Singer’s employment by us “without cause” or by Mr. Singer for “good reason”, as those terms are defined in Mr. Singer’s employment agreement, he would be entitled to: (i) continuation of his base salary in effect at the time of termination through the later of two years from the date of termination or the expiration of the term of the employment agreement and (ii) continued participation in our benefit plans (or comparable plans) for the duration of the severance period or, if earlier, until he is eligible for comparable plans with a subsequent employer. In addition, the option granted to Mr. Singer on June 5, 2000 will be deemed fully vested and exercisable on the date of termination and would remain exercisable for the duration of the severance period. If a change in control (as defined in the employment agreement) occurs, Mr. Singer may resign for good reason at any time after the six month anniversary of the change in control (or immediately if the incumbent directors did not approve the change in control).

The merger with Medical Manager Corporation constituted a change in control and an event of good reason for purposes of Mr. Singer’s employment agreement after the six month anniversary of the merger date (March 12, 2001). On September 5, 2000, Mr. Singer agreed that if he resigned following March 12, 2001 as a result of the Medical Manager merger, his severance benefits would be based upon an annual base salary of $250,000 and his June 5, 2000 option would not vest. The option granted to Mr. Singer on July 23, 1999 was deemed fully vested on the six month anniversary of the merger.

In the event of the termination of Mr. Singer’s employment due to his death or disability, he would be entitled to a continuation of his base salary and benefits for the period through the expiration of the term of the agreement. In addition, the option granted to Mr. Singer on June 5, 2000 will be deemed fully vested and exercisable on the date of termination and would remain exercisable though such period.

If Mr. Singer’s employment is terminated by us for cause, he is not entitled to any further compensation or benefits. In addition, Mr. Singer would not be entitled to any additional rights or vesting with respect to the stock options following the date of termination.

The employment agreement contains confidentiality obligations, which survive indefinitely and non-solicitation and non-competition obligations that end on the later of (a) the first anniversary of the date of termination; (b) July 23, 2004; or (c) the last day on which Mr. Singer is receiving severance or benefits following his separation from the employ of our company.

We are party to an employment agreement with Anthony Vuolo, our Executive Vice President — Chief Financial Officer, which provides for an employment period through July 1, 2006. Mr. Vuolo currently receives an annual base salary of $450,000 and is entitled to receive a bonus in the same form and amount received by any other executive officer with similar responsibilities and compensation.

In the event of the termination of Mr. Vuolo’s employment due to his death or disability, by us “without cause” or by Mr. Vuolo for “good reason”, as those terms are defined in Mr. Vuolo’s

employment agreement, he would be entitled to: (i) continuation of his base salary through the later of eighteen months and the expiration of the term of the agreement; (ii) any bonuses that he would have normally been entitled to through the term of his employment agreement (the amount of the bonus for years subsequent to the year in which the termination of employment occurred will be equal to the bonus received for the year of termination); and (iii) continued participation in our benefit plans (or comparable plans) for thirty-six months. In addition, all options granted to Mr. Vuolo which have not vested prior to the date of termination would be vested as of the date of termination and all such options would remain exercisable as if he remained in our employ through the expiration date specified in each applicable stock option agreement. A change in control (as defined in the employment agreement) of WebMD is an event that constitutes good reason.

If Mr. Vuolo’s employment is terminated by us for cause or by him without good reason, he is not entitled to any further compensation or benefits. In addition, Mr. Vuolo would not be entitled to any additional rights or vesting with respect to the stock options following the date of termination.

The employment agreement contains a tax gross-up provision relating to any excise tax that Mr. Vuolo incurs by reason of his receipt of any payment that constitutes an excess parachute payment as defined in Section 280G of the Internal Revenue Code.

In connection with Patricia Fili-Krushel’s resignation as our Chief Executive Officer — Consumer Sales and Services, we entered into a letter agreement with Ms. Fili-Krushel effective July 13, 2001. Pursuant to the letter agreement, WebMD agreed to pay to Ms. Fili-Krushel, in installments during the three-year period following her resignation: (a) 50% of her annual base salary of $1,000,000 from July 13, 2001 through May 13, 2004 and (b) $750,000, which represents 50% of her minimum annual bonus of $500,000 for 2001, 2002 and 2003. In addition, the option to purchase 550,000 shares of WebMD common stock granted to Ms. Fili-Krushel was deemed vested, but continues to become exercisable in accordance with its original terms and remains exercisable through June 15, 2004.

Ms. Fili-Krushel is subject to nonsolicitation, noncompetition and confidentiality provisions. WebMD’s obligations under the letter agreement are conditioned on Ms. Fili-Krushel’s compliance with these provisions.

The current members of the Compensation Committee of our Board of Directors are Mark J. Adler, M.D., L. John Doerr and Joseph E. Smith. During 2001, Eric J. Gleacher, who resigned as a member of the Board of Directors in February 2001, was also a member of the Compensation Committee. Mr. Gleacher is the Chief Executive Officer and Chairman of the Board of Gleacher & Co. LLC, which provided financial advisory services to us prior to 2001.

No interlocking relationship exists between our Board of Directors or Compensation Committee and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

The following table sets forth information with respect to the beneficial ownership of our common stock, as of April 1, 2002, by each of our directors, each of our named executive officers, as described above under “Item 11. Executive Compensation” and by all of our directors and executive officers as a group. As of April 1, 2002, no person or entity was known by us to beneficially own more than 5% of our common stock.

The number and percentage of our shares of common stock owned is based on 312,760,837 shares outstanding as of April 1, 2002. Beneficial ownership is determined under the rules and regulations of the SEC. Shares of common stock that a person has the right to acquire within 60 days of April 1, 2002, including pursuant to options or warrants that are currently exercisable or exercisable within 60 days of April 1, 2002, are deemed to be outstanding and beneficially owned by that person for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. However, those shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons listed in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Unless otherwise indicated, the address of each of the beneficial owners identified is c/o WebMD Corporation, 669 River Drive, Center 2, Elmwood Park, New Jersey 07407-1361.


(1)	Represents 10,000 shares held by Dr. Adler and 22,000 shares held by the Adler Family Trust.

(2)	Represents 170,000 shares held by Mr. Brooke and 201,667 shares held by PMSV Holdings LLC, of which Mr. Brooke is the managing member.

(3)	Represents 264,677 shares held by Mr. Doerr, 6,469,957 shares held and 27,891 shares issuable upon the exercise of warrants held by Kleiner Perkins Caufield & Byers VII L.P., 1,275,736 shares held by KPCB Java Fund and 400,089 shares held and 1,468 shares issuable upon the exercise of warrants held by KPCB Life Sciences Zaibatsu Fund II. KPCB Life Sciences Zaibatsu Fund II and KPCB VII are wholly controlled by KPCB VII Associates. KPCB Java Fund is controlled by KPCB VIII. Mr. Doerr is a general partner of KPCB VIII and KPCB VII Associates. The address for Mr. Doerr is c/o Kleiner, Perkins, Caufield & Byers, 2750 Sand Hill Road, Menlo Park, CA 94025.


(4)	Represents 787,800 shares held by Mr. Manning and 71,247 shares held by Synetic Foundation, Inc., a charitable foundation of which Mr. Manning and Mr. Wygod are trustees and share voting and dispositive power.

(5)	Represents 80,975 shares held by Mr. Mele, 1,622 shares allocated to Mr. Mele’s account under a 401(k) Plan and 481,984 shares held by the Rose Foundation, a private charitable foundation of which Mr. Mele and Mr. Wygod are trustees and share voting and dispositive power.

(6)	Represents 437,662 shares held by Mr. Sarkowsky, 95,832 shares held by Sarkowsky Family L.P. and 37,500 shares held by a charitable foundation of which Mr. Sarkowsky is a director.

(7)	Represents 9,171,875 shares held by MAS 1997 Family Limited Partners, the general partner of which is a company controlled by Mr. Singer and the sole limited partner of which is Mr. Singer, and 50,750 shares held by MDDS Partnership Limited, the general partner of which is controlled by Mr. Singer and the limited partners of which are Mr. Singer and certain of his family members.

(8)	Represents 24,833 shares held by Mr. Vuolo, 1,610 shares allocated to Mr. Vuolo’s account under a 401(k) Plan and 586 shares held by Mr. Vuolo’s spouse.

(9)	Represents 7,220,927 shares held by Mr. Wygod, 7,600 shares held by Mr. Wygod’s spouse, 161,332 shares held by SYNC, Inc., which is controlled by Mr. Wygod, 71,247 shares held by Synetic Foundation, Inc., a charitable foundation of which Mr. Wygod and Mr. Manning are trustees and share voting and dispositive power, and 481,984 shares held by the Rose Foundation, a private charitable foundation of which Messrs. Wygod and Mele are trustees and share voting and dispositive power.

We entered into a five-year strategic alliance with Microsoft in May 1999. In March 2001, we executed a non-binding letter of intent with Microsoft with respect to a new relationship. In April 2001, we entered into definitive agreements with Microsoft to implement the new relationship, which was effective as of January 1, 2001. In connection with the original relationship, Microsoft acquired shares of common stock and a warrant to purchase shares of common stock of WebMD, Inc. As a result of our merger with WebMD, Inc. in November 1999, the shares of common stock were converted into 11,933,340 shares of our common stock and the warrant was converted into a warrant to purchase 13,676,389 shares of our common stock at an exercise price of $30.16 per share. We repurchased the 11,933,340 shares of common stock from Microsoft in November 2001 for approximately $50 million in cash. The warrant is outstanding and is fully vested and expires on May 12, 2004. The original relationship and the new relationship are each described below. On October 22, 2001, Charles G.V. Stevens resigned as director of WebMD, a position to which he was elected in accordance with the terms of the original relationship.

Original Relationship. Under the terms of the original strategic relationship, WebMD developed, hosted and maintained on its servers a health channel for MSN and was required to pay Microsoft an aggregate of $162,000,000 in carriage fees for the distribution of that content. In addition, Microsoft and WebMD each committed co-marketing funds of $50,000,000 over the first two years of the term. During 2000, WebMD recognized $30,562,000, as sales, marketing, general and administrative expense related to the carriage fees.

Microsoft was required to remit to WebMD 100% of the net revenue over the term of the agreement from banner and other advertising and e-commerce transactions generated on the health channel or advertising that Microsoft placed on WebMD.com each year during the term until we received an amount equal to that year’s carriage fees, including guaranteed minimum amounts of $22,500,000 in each of the first two years of the term, and was required to share revenue equally with us after that. WebMD was required to pay Microsoft a 25% commission on the portion of the revenue received up to the annual guaranteed minimum amounts for all advertisements placed by Microsoft. WebMD recognized this advertising revenue when Microsoft notified us that advertisements had been placed on the health channel and billed by Microsoft, not based on the guaranteed minimum amounts. During 2000, WebMD recognized $5,996,000, net of commissions, related to health channel advertising.

Microsoft agreed to sponsor up to 5.0 million subscriber months, for $29.95 per month, of subscriptions to our physician Web site over the term of the agreement. WebMD was required to pay a $5 per month commission on all subscriptions placed by Microsoft. During 2000, WebMD recorded $16,114,000, as revenue, net of commissions, related to subscriptions sponsored by Microsoft.

WebMD was required to share with Microsoft 50% of net revenue from banner and other advertising on our physician Web site generated by sponsored subscriptions until Microsoft received the amount it had incurred for its sponsored subscriptions. Thereafter, WebMD was required to share 25% of this revenue with Microsoft. In addition, WebMD was required to share with Microsoft 15% of WebMD’s net revenue from e-commerce transactions and additional services not included in the basic subscription to WebMD’s physician Web site generated by these sponsored subscriptions. There were no obligations to Microsoft during 2000 relating to this provision.

New Relationship. To implement the new relationship, the parties entered into two definitive agreements. The first agreement related to technology matters and was terminated by the parties on September 14, 2001. No payments were made by either party under the terminated agreement. Under the second agreement, we will program the majority of the MSN health channel, and WebMD and MSN will share revenues derived from advertising, sponsorship and e-commerce on the MSN health channel site, with WebMD receiving 100% of revenues up to an agreed upon annual threshold (or until an agreed upon maximum for the contract period is reached) and 60% thereafter. We will no longer pay carriage fees to

Microsoft. The term of this agreement is scheduled to expire on June 30, 2004. In connection with the new relationship, the parties agreed that Microsoft would no longer be responsible for funding the sponsorship of subscriptions to WebMD’s physician portal, and we would no longer be required to share with Microsoft revenue generated by physician usage of WebMD’s healthcare portals.

As part of the transaction in which WebMD acquired Envoy Corporation from Quintiles Transnational Corp. in May 2000, WebMD entered into a Data Rights Agreement and an Internet Product Development and Marketing Agreement with Quintiles and Dennis B. Gillings, Ph.D., was appointed to the Board of Directors of WebMD, a position from which he resigned effective October 8, 2001. During 2001, Quintiles did not make any payments to WebMD pursuant to either of these agreements.

As part of a settlement of litigation between WebMD and Quintiles, the parties terminated the Data Rights Agreement and the Internet Product Development Agreement and all other agreements between them pursuant to a Settlement Agreement dated October 12, 2001. In accordance with the terms of the Settlement Agreement, on October 12, 2001, WebMD purchased from Quintiles, for $185 million in cash, all 35 million shares of WebMD common stock held by Quintiles and Quintiles ceased being a related party of WebMD.

The Settlement Agreement also provides that Quintiles will have the right to receive a payment (payable at WebMD’s option in cash and/or stock) in the event that, on or before June 30, 2004, WebMD is acquired at a price per WebMD share greater than $4.00 or Envoy is sold at an aggregate price of greater than $500 million. WebMD has no obligation to pursue either of these types of transactions.


	•	In the case of an acquisition of WebMD on or before June 30, 2003, the payment to Quintiles will equal the amount by which the price paid in the acquisition exceeds $4.00 per share, multiplied by 35 million. If the acquisition occurs after June 30, 2003 and on or before June 30, 2004, the payment will be 80% of the payment described in the prior sentence.

	•	In the case of a sale of Envoy on or before June 30, 2003, the payment to Quintiles will equal 10% of the amount by which the price received in the sale exceeds $500 million. If the sale occurs after June 30, 2003 and on or before June 30, 2004, the payment will be 80% of the payment described in the prior sentence.

Pursuant to an agreement signed and publicly announced in December 1999 and closed in January 2000, WebMD entered into a strategic relationship with The News Corporation Limited, Fox Entertainment Group and certain of their affiliates, which we refer to collectively as News Corporation. On December 29, 2000, this strategic alliance was revised by the parties. On February 15, 2001, WebMD completed all transactions related to its revised strategic relationship with News Corporation and News Corporation ceased being a related party of WebMD. The original relationship and the new relationship are described below.

Original Relationship. The financial terms of the relationship included: $700,000,000 in media services by News Corporation, comprised of $400,000,000 domestically and $300,000,000 internationally over 10 years; a $100,000,000 cash investment commitment by News Corporation in an international joint venture; a $60,000,000 five-year licensing agreement for syndication of WebMD daily broadcast content; and the transfer to WebMD of 50% interests in The Health Network, a health-focused cable network, and thehealthnetwork.com. WebMD issued an aggregate of 155,951 shares of Series A preferred stock, convertible into 21,282,645 shares of WebMD’s common stock. In addition, News Corporation purchased 2,000,000 shares of WebMD common stock for an aggregate purchase price of $100,000,000 in cash.

New Relationship. WebMD retained the right to receive $205,000,000 in domestic media services over ten years from News Corporation and will continue to provide content to News Corporation for use across News Corporation’s media properties for the next four years for cash payments totaling $12 million annually. News Corporation transferred its 50% interest in the international joint venture to WebMD and was relieved of its commitment to provide any future capital to the international joint venture and its commitment to provide any international media services. WebMD transferred its interest in The Health Network to News Corporation. WebMD was also relieved of all future capital commitments to The Health Network.

In connection with the revisions to the relationship, News Corporation surrendered 155,951 shares of WebMD’s Series A convertible preferred stock, which would have converted into 21,282,645 shares of WebMD common stock. WebMD granted to News Corporation a warrant to acquire 3,000,000 shares of its common stock at an exercise price of $15 per share. News Corporation has registration rights with respect to the shares of common stock issuable upon exercise of the warrant.

On April 6, 2001, we loaned $1,450,000 to K. Robert Draughon, our Executive Vice President, Business Development. The funds were advanced pursuant to a promissory note bearing interest at the fixed rate per annum of 4.63%. The loan is full recourse and is secured by a pledge by Mr. Draughon of all shares of our common stock, and all options to purchase shares of our common stock, owned by him. As of April 1,2002, approximately $365,000 of the principal amount and $20,000 of accrued interest were outstanding.

On September 11, 2000, Medical Manager loaned $500,000 to Kevin M. Cameron, a member of WebMD’s Office of the President and our Executive Vice President, Business Development, which loan was assumed by us in our merger with Medical Manager. The funds were advanced pursuant to a promissory note bearing interest at the fixed rate per annum of 6.22%. The loan is secured by a pledge by Mr. Cameron of all shares of our common stock, and all options to purchase shares of our common stock, owned by him. As of April 1, 2002, the entire principal amount and approximately $50,000 of accrued interest were outstanding.

We were reimbursed approximately $163,000 by a corporation controlled by Martin J. Wygod, our Chairman of the Board of Directors and Chief Executive Officer, for the partial use of our office facilities and for services rendered by our employees during 2001.

We lease property in Alachua, Florida that is owned by a corporation controlled by Michael A. Singer, a member of WebMD’s Office of the President and Chief Executive Officer and President, WebMD Medical Manager and a member of our Board of Directors, and a member of his family. We are responsible for all real estate taxes, insurance and maintenance relating to the property. The term of the lease is through March 31, 2009. During 2001, the amount of rent payable under the lease was approximately $755,000.

See “Index to Exhibits” beginning on page E-1, which is incorporated by reference herein.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereto duly authorized, on the 30th day of April, 2002.


	By:	/s/ LEWIS H. LEICHER



	Lewis H. Leicher
	Senior Vice President and
	Assistant General Counsel


	*	Confidential treatment was received with respect to certain portions of this document.

E-5 EX-10.21 3 g75760ex10-21.txt AMENDED & RESTATED 1998 EMPLOYEE STOCK PURCHASE EXHIBIT 10.21 AS AMENDED AS OF APRIL 30, 2001 WEBMD CORPORATION AMENDED AND RESTATED 1998 EMPLOYEE STOCK PURCHASE PLAN The following constitute the provisions of the Amended and Restated 1998 Employee Stock Purchase Plan of WebMD Corporation. 1. PURPOSE. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2. DEFINITIONS. (a) "BOARD" shall mean the Board of Directors of the Company. (b) "CODE" shall mean the Internal Revenue Code of 1986, as amended. (c) "COMMON STOCK" shall mean the common stock of the Company. (d) "COMPANY" shall mean WebMD Corporation and any Designated Subsidiary of the Company. (e) "COMPENSATION" shall mean all base straight time gross earnings and commissions, but exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses and other compensation. (f) "DESIGNATED SUBSIDIARY" shall mean any Subsidiary which has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan. (g) "EMPLOYEE" shall mean any individual who is an Employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5) months in any calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. (h) "ENROLLMENT DATE" shall mean the first Trading Day of each Offering Period. (i) "EXERCISE DATE" shall mean the last Trading Day of each Offering Period. (j) "FAIR MARKET VALUE" shall mean, as of any date, the value of Common Stock determined as follows: (1) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; (2) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; (3) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board; or (4) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the final prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company's Common Stock (the "REGISTRATION STATEMENT"). (k) "OFFERING PERIODS" shall mean the periods of approximately six (6) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 1 and November 1 of each year and terminating on the last Trading Day in the periods ending six (6) months later; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company's Registration Statement effective and ending on the last Trading Day on or before April 30, 2000. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan. (l) "PLAN" shall mean this Amended and Restated 1998 Employee Stock Purchase Plan. 2 (m) "PURCHASE PRICE" shall mean 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Board pursuant to Section 20. (n) "RESERVES" shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option. (o) "SUBSIDIARY" shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. (p) "TRADING DAY" shall mean a day on which national stock exchanges and the Nasdaq System are open for trading. 3. ELIGIBILITY. (a) Any Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan. (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. 4. OFFERING PERIODS. The Plan shall be implemented by successive Offering Periods, with a new Offering Period commencing on the first Trading Day on or after May 1 and November 1 of each year, or on such other date as the Board shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company's Registration Statement effective and ending on the last Trading Day on or before April 30, 2000. The Board shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter. 3 5. PARTICIPATION. (a) An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with the Company's payroll office prior to the applicable Enrollment Date. (b) Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof. 6. PAYROLL DEDUCTIONS. (a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding 15% of the Compensation which he or she receives on each pay day during the Offering Period. (b) All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into such account. (c) A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof. A participant may not otherwise increase or decrease the rate of his or her payroll deductions during an Offering Period. A participant's subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof. (d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period. Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof. (e) At the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available 4 to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee. 7. GRANT OF OPTION. On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company's Common Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be permitted to purchase during each Offering Period more than 5,000 shares of the Company's Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof. The Board may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of the Company's Common Stock an Employee may purchase during each Offering Period. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period. 8. EXERCISE OF OPTION. (a) Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full and fractional shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. Any monies left over in a participant's account after the Exercise Date shall be returned to the participant. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her. (b) If the Board determines that, on a given Exercise Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise Date, the Board may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 hereof. The Company may make pro rata allocation of the shares available on the Enrollment Date of any applicable Offering 5 Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company's stockholders subsequent to such Enrollment Date. 9. BROKERAGE ACCOUNT; DELIVERY OF STOCK. The Company may arrange for an account to be established for each Plan participant at a third-party brokerage firm to be designated from time to time by the Board. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall, at its sole discretion, either (i) arrange for the purchased shares to be credited to the participant's brokerage account in book-entry form, or (ii) arrange for the delivery to each participant, as appropriate, of a certificate representing the shares purchased upon exercise of his or her option. If shares are credited to a brokerage account, the participant may at any time request delivery of one or more stock certificates representing such shares. Such certificates shall be registered in the name of the participant or, if the participant so indicates in his or her subscription agreement, in the participant's name jointly with his or her spouse. The Company shall pay the cost associated with the establishment of such brokerage accounts and shall pay all brokerage fees and commissions associated with the initial deposit into such account of shares purchased pursuant to the Plan and with the withdrawal of stock certificates from such account. Any special features that a participate may elect to apply with respect to his or her brokerage account which are not made available to all participants shall be negotiated between the participant and the broker and shall be at the sole cost of the participant. 10. WITHDRAWAL. (a) A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant's payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement. (b) A participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 11. TERMINATION OF EMPLOYMENT. Upon a participant's ceasing to be an Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the 6 option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant's option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice. 12. INTEREST. No interest shall accrue on the payroll deductions of a participant in the Plan. 13. STOCK. (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company's Common Stock which shall be made available for sale under the Plan shall be 3,000,000 shares, plus an annual increase to be added on the first day of the Company's fiscal year beginning in 2001 equal to the lesser of (i) 1,500,000 shares, (ii) 0.5% of the outstanding shares on such date or (iii) a lesser amount determined by the Board. (b) The participant shall have no interest or voting right in shares covered by his or her option until such option has been exercised. 14. ADMINISTRATION. The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board. The Board or its committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Board or its committee shall, to the full extent permitted by law, be final and binding upon all parties. 15. DESIGNATION OF BENEFICIARY. (a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. (b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has 7 been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 16. TRANSFERABILITY. Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof. 17. USE OF FUNDS. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 18. REPORTS. Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any. 19. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION, MERGER OR ASSET SALE. (a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the Reserves, the maximum number of shares each participant may purchase each Offering Period (pursuant to Section 7), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration". Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the "NEW EXERCISE DATE"), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided 8 otherwise by the Board. The New Exercise Date shall be before the date of the Company's proposed dissolution or liquidation. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof. (c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Offering Period then in progress shall be shortened by setting a new Exercise Date (the "NEW EXERCISE DATE") and any Offering Period then in progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the Company's proposed sale or merger. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof. 20. AMENDMENT OR TERMINATION. (a) The Board of Directors of the Company may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19 hereof, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that the termination of the Offering Period or the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain stockholder approval in such a manner and to such a degree as required. (b) Without stockholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Board (or its committee) shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common 9 Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan. (c) In the event the Board determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to: (1) altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price; (2) shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and (3) allocating shares. Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants. 21. NOTICES. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 22. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 23. TERM OF PLAN. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20 hereof. 10 EXHIBIT A WEBMD CORPORATION AMENDED AND RESTATED 1998 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT _____ Original Application Enrollment Date: _________ _____ Change in Payroll Deduction Rate _____ Change of Beneficiary(ies) 1. _________________________________ hereby elects to participate in the WebMD Corporation Amended and Restated 1998 Employee Stock Purchase Plan (the "EMPLOYEE STOCK PURCHASE PLAN") and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan. 2. I hereby authorize payroll deductions from each paycheck in the amount of ____% of my Compensation on each payday (not to exceed [__]%) during the Offering Period in accordance with the Employee Stock Purchase Plan. (Please note that no fractional percentages are permitted.) 3. I understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option. 4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement is subject to stockholder approval of the Employee Stock Purchase Plan. 5. Shares purchased for me under the Employee Stock Purchase Plan should be issued or registered in the name(s) of (Employee or Employee and Spouse only): ____________________________________. 6. I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the Offering Period during which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF MY SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Employee Stock Purchase Plan. 8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Stock Purchase Plan: NAME: (Please print) ----------------------------------------------------------- (First) (Middle) (Last) - ------------------------------ --------------------------------------------- Relationship --------------------------------------------- (Address) 2 Employee's Social Security Number: --------------------------------------------- Employee's Address: --------------------------------------------- --------------------------------------------- --------------------------------------------- I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. Dated: ---------------------- --------------------------------------------- Signature of Employee --------------------------------------------- Spouse's Signature (If beneficiary other than spouse) 3 EXHIBIT B WEBMD CORPORATION AMENDED AND RESTATED 1998 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL The undersigned participant in the Offering Period of the WebMD Corporation Amended and Restated 1998 Employee Stock Purchase Plan which began on ____________, 19____ (the "ENROLLMENT DATE") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement. Name and Address of Participant: --------------------------------------------- --------------------------------------------- --------------------------------------------- Signature: --------------------------------------------- Date: ---------------------------------------- EX-10.46 4 g75760ex10-46.txt 2001 EMPLOYEE NON-QUALIFIED STOCK OPTION PLAN EXHIBIT 10.46 WEBMD CORPORATION 2001 EMPLOYEE NON-QUALIFIED STOCK OPTION PLAN AS AMENDED ON NOVEMBER 28, 2001 ARTICLE 1 PURPOSE 1.1 General. The purpose of the WebMD Corporation 2001 Employee Non-qualified Stock Option Plan (the "Plan") is to promote the success, and enhance the value, of WebMD Corporation (the "Corporation"), by linking the personal interests of its employees to those of Corporation shareholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Corporation in its ability to motivate, attract, and retain the services of employees upon whose judgment, interest, and special effort the successful conduct of the Corporation's operation is largely dependent. Accordingly, the Plan permits the grant non-qualified options from time to time to selected employees. ARTICLE 2 EFFECTIVE DATE 2.1 Effective Date. The Plan shall be effective as of the date upon which it shall be approved by the Board (the "Effective Date"). ARTICLE 3 DEFINITIONS 3.1 Definitions. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings: (a) "Board" means the Board of Directors of the Corporation. (b) "Cause" as a reason for a Participant's termination of employment shall have the meaning assigned such term in the employment agreement, if any, between such Participant and the Corporation or an affiliated company, provided, however that if there is no such employment agreement in which such term is defined, "Cause" shall mean any of the following acts by the Participant, as determined by the Company: gross neglect of duty, prolonged absence from duty without the consent of the Corporation, intentionally engaging in any activity that is in conflict with or adverse to the business or other interests of the Corporation, willful misconduct, misfeasance or malfeasance of duty which is reasonably determined to be detrimental to the Corporation or breach of any restrictive covenant set forth in an Option Agreement or any substantially similar provisions in any other agreements with the Company or any of its subsidiaries. (c) "Code" means the Internal Revenue Code of 1986, as amended from time to time. (d) "Committee" means the committee described in Article 4. (e) "Corporation" means WebMD Corporation, a Delaware corporation. (f) "Effective Date" has the meaning assigned such term in Section 2.1. (g) "Eligible Persons" has the meaning assigned to such term in Section 6.1. (h) "Fair Market Value", on any date, means (i) if the Stock is listed on a securities exchange or is traded over the Nasdaq National Market, the closing sales price on such exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on a securities exchange or traded over the Nasdaq National Market, the mean between the bid and offered prices as quoted by Nasdaq for such date, provided that if it is determined that the fair market value is not properly reflected by such Nasdaq quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable. (i) "Option" means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. The Options to be granted hereunder are not intended to qualify as "incentive stock options" within the meaning of Section 422 of the Code or any successor provision. (j) "Option Agreement" means any written agreement, contract, or other instrument or document evidencing an Option. (k) "Parent" means a corporation which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Corporation. (l) "Participant" means a person who, as an employee of the Corporation or any Parent or Subsidiary, has been granted an Option under the Plan. (m) "Plan" means the WebMD Corporation 2001 Employee Non-Qualified Stock Option Plan, as amended from time to time. (n) "Stock" means the $.0001 par value common stock of the Corporation and such other securities of the Corporation as may be substituted for Stock pursuant to Article 15. (o) "Subsidiary" means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation. (p) "1933 Act" means the Securities Act of 1933, as amended from time to time. (q) "1934 Act" means the Securities Exchange Act of 1934, as amended from time to time. 2 ARTICLE 4 ADMINISTRATION 4.1. Committee. The Plan shall be administered by the Compensation Committee of the Board (the "Committee") or, at the discretion of the Board from time to time, the Plan may be administered by the Board. It is intended that the directors appointed to serve on the Committee shall be "non-employee directors" (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and "outside directors" (within the meaning of Code Section 162(m) and the regulations thereunder) to the extent that Rule 16b-3 and, if necessary for relief from the limitation under Code Section 162(m) and such relief is sought by the Corporation, Code Section 162(m), respectively, are applicable. However, the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements shall not invalidate any Option made by the Committee which Option is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. During any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. 4.2. Action by the Committee. For purposes of administering the Plan, the following rules of procedure shall govern the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved unanimously in writing by the members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Corporation or any Parent or Subsidiary, the Corporation's independent certified public accountants, or any executive compensation consultant or other professional retained by the Corporation to assist in the administration of the Plan. 4.3. Authority of Committee. Except as provided below, the Committee has the exclusive power, authority and discretion to: (a) Designate Participants; (b) Determine the number of shares of Stock to which an Option will relate; (c) Determine the terms and conditions of any Option granted under the Plan, including but not limited to, the exercise price, the term of the Option, any restrictions or limitations on the Option, any schedule for lapse of restrictions on the exercisability of an Option, and accelerations or waivers thereof, based in each case on such considerations as the Committee in its sole discretion determines; (d) Accelerate the vesting of any outstanding Option, based in each case on such considerations as the Committee in its sole discretion determines; (e) Prescribe the form of each Option Agreement, which need not be identical for each Participant; (f) Decide all other matters that must be determined in connection with an Option; 3 (g) Establish, adopt or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; (h) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to administer the Plan; and (i) Amend the Plan or any Option Agreement as provided herein. Notwithstanding the above, the Board or the Committee may expressly delegate to a special committee consisting of one or more officers of the Corporation some or all of the Committee's authority under subsection (a) through (e) above with respect to those eligible Participants, who at the time of grant are not, and are not anticipated to become, either (i) Covered Employees or (ii) persons subject to Section 16 of the 1934 Act, provided that such delegation is in accordance with Section 157 of the Delaware General Corporation Law. 4.4. Decisions Binding. The Committee's interpretation of the Plan, any Option granted under the Plan, any Option Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. ARTICLE 5 SHARES SUBJECT TO THE PLAN 5.1. Number of Shares. Subject to adjustment as provided in Section 15.1, the aggregate number of shares of Stock reserved and available for Options shall be 10,000,000 shares. 5.2. Lapsed Options. To the extent that an Option is canceled, terminates, expires, is forfeited or lapses for any reason, any shares of Stock subject to the Option will again be available for the grant of an Option under the Plan. 5.3. Stock Distributed. Any Stock issued pursuant to an Option may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market. 5.4. Limitation on Options. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 15.1), the maximum number of shares of Stock with respect to one or more Options that may be granted during any one calendar year under the Plan to any one Participant shall be 200,000. ARTICLE 6 ELIGIBILITY 6.1. General. Options may be granted only to individuals who are employees of the Corporation or a Parent or Subsidiary; provided, however, that no person who is subject to Section 16(a) of the Exchange Act shall be eligible for an Option hereunder ("Eligible Persons"). 4 ARTICLE 7 TERMS OF STOCK OPTION 7.1. General. The Committee is authorized to grant Options to Participants on the following terms and conditions: (a) Exercise Price. The exercise price per share of Stock under an Option shall be determined by the Committee but shall not be less than 100 percent of the Fair Market Value on the date of grant. (b) Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, subject to Section 7.1(e). The Committee also shall determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised. The Committee may waive any exercise provisions at any time in whole or in part based upon factors as the Committee may determine in its sole discretion so that the Option becomes exercisable at an earlier date. Unless the Option Agreement states otherwise, an Option shall vest in the following manner: 25% per year commencing on the first anniversary of the date of grant. (c) Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation, cash, shares of Stock, or other property (including "cashless exercise" arrangements), and the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants; provided, however, that if shares of Stock are used to pay the exercise price of an Option, such shares must have been held by the Participant for at least six months. (d) Evidence of Grant. All Options shall be evidenced by a written Option Agreement between the Corporation and the Participant. The Option Agreement shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee. (e) Exercise Term. In no event may any Option be exercisable for more than ten years from the date of its grant. (f) Termination of Employment. (1) In the event that a Participant's employment with the Company or any of its Subsidiaries or Parents terminates for any reason (other than Cause), the Participant (or the Participant's estate) shall, unless otherwise provided in the applicable Option Agreement, be entitled to exercise the Participant's Options which have become vested as of the date of termination for a period of 90 days (one year in the event of death) following the date of termination. (2) In the event that a Participant's employment with the Company or any of its Subsidiaries or Parents terminates for any reason, any Options which have not become vested as of the date of termination (the "Date of Termination") shall, unless otherwise provided in the applicable Option Agreement, terminate and be cancelled without any consideration being paid therefore. In the event that a Participant's employment is terminated by the Company, or a Subsidiary or Parent for Cause, all of such Participant's Options (including the vested portion) shall, unless otherwise provided in the applicable 5 Option Agreement, terminate and be cancelled without any consideration being paid therefore. ARTICLE 8 MISCELLANEOUS 8.1. Limits on Transfer. No right or interest of a Participant in any unexercised Option may be pledged, encumbered, or hypothecated to or in favor of any party other than the Corporation or a Parent or Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Corporation or a Parent or Subsidiary. No unexercised or restricted Option shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution or, pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Option under the Plan; provided, however, that the Committee may (but need not) permit other transfers where the Committee concludes that such transferability (i) does not result in accelerated taxation, and (ii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable to transferable Options. 8.2. Beneficiaries. A Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Option upon the Participant's death. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Option Agreement applicable to the Participant, except to the extent the Plan and Option Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, payment shall be made to the Participant's estate. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee. 8.3. Stock Certificates. All Stock issuable under the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the Stock. 8.4. Termination of Employment. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A termination of employment shall not occur (i) in a circumstance in which a Participant transfers from the Corporation to one of its Parents or Subsidiaries, transfers from a Parent or Subsidiary to the Corporation, or transfers from one Parent or Subsidiary to another Parent or Subsidiary, or (ii) in the discretion of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or other disposition of the Participant's employer from the Corporation or any Parent or Subsidiary. 8.5. Loan Provisions. With the consent of the Committee, the Corporation may make, guarantee or arrange for a loan or loans to a Participant with respect to the exercise of any Option granted under this Plan and/or with respect to the payment by the Participant of any or all federal and/or state income taxes due on account of the exercise of any Option hereunder. The Committee shall have full authority to decide whether to make a loan or loans hereunder and to determine the amount, terms and provisions of any such loan(s), including the interest rate to be charged in respect of any such loan(s), whether the loan(s) are to be made with or without recourse against the borrower, the collateral or other security, if 6 any, securing the repayment of the loan(s), the terms on which the loan(s) are to be repaid and the conditions, if any, under which the loan(s) may be forgiven. ARTICLE 9 CHANGES IN CAPITAL STRUCTURE 9.1. General. In the event of a corporate transaction involving the Corporation (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the authorization limits under Section 5.1 and 5.4 shall be adjusted proportionately, and the Committee may adjust Options to preserve the benefits or potential benefits of the Options. Action by the Committee may include: (i) adjustment of the number and kind of shares which may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Options; (iii) adjustment of the exercise price of outstanding Options; and (iv) any other adjustments that the Committee determines to be equitable. Without limiting the foregoing, in the event a stock dividend or stock split is declared upon the Stock, the authorization limits under Section 5.1 and 5.4 shall be increased proportionately, and the shares of Stock then subject to each Option shall be increased proportionately without any change in the aggregate purchase price therefor. ARTICLE 10 AMENDMENT, MODIFICATION AND TERMINATION 10.1. Amendment, Modification and Termination. The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareholder approval; provided, however, that the Board or Committee may condition any amendment or modification on the approval of shareholders of the Corporation if such approval is necessary or deemed advisable with respect to tax, securities or other applicable laws, policies or regulations. 10.2. Options Previously Granted. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Option without approval of the Participant; provided, however, that, subject to the terms of the applicable Option Agreement, such amendment, modification or termination shall not, without the Participant's consent, reduce or diminish the value of such Option and provided further that the original term of any Option may not be extended. No termination, amendment, or modification of the Plan shall adversely affect any Option previously granted under the Plan, without the written consent of the Participant. ARTICLE 11 GENERAL PROVISIONS 11.1. No Rights to Options. No Participant or any eligible participant shall have any claim to be granted any Option under the Plan, and neither the Corporation nor the Committee is obligated to treat Participants or eligible participants uniformly. 11.2. No Stockholder Rights. No Option gives the Participant any of the rights of a shareholder of the Corporation unless and until shares of Stock are in fact issued to such person in connection with the exercise of such Option. 7 11.3. Withholding. The Corporation or any Parent or Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Corporation, an amount sufficient to satisfy federal, state, and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of the Plan. With respect to withholding required upon any taxable event under the Plan, the Committee may, at the time the Option is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by withholding from the Option shares of Stock having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. 11.4. No Right to Continued Service. Nothing in the Plan or any Option Agreement shall interfere with or limit in any way the right of the Corporation or any Parent or Subsidiary to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue as an employee of the Corporation or any Parent or Subsidiary. 11.5. Unfunded Status of Options. The Plan is intended to be an "unfunded" plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Option, nothing contained in the Plan or any Option Agreement shall give the Participant any rights that are greater than those of a general creditor of the Corporation or any Parent or Subsidiary. 11.6. Indemnification. To the extent allowable under applicable law, each member of the Committee shall be indemnified and held harmless by the Corporation from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which such member may be a party or in which he may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts paid by such member in satisfaction of judgment in such action, suit, or proceeding against him provided he gives the Corporation an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Corporation's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Corporation may have to indemnify them or hold them harmless. 11.7. Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Corporation or any Parent or Subsidiary unless provided otherwise in such other plan. 11.8. Expenses. The expenses of administering the Plan shall be borne by the Corporation and its Parents or Subsidiaries. 11.9. Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. 11.10. Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 11.11. Fractional Shares. No fractional shares of Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up. 8 11.12. Government and Other Regulations. The obligation of the Corporation to make payment of Options in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Corporation shall be under no obligation to register under the 1933 Act, or any state securities act, any of the shares of Stock issued in connection with the Plan. The shares issued in connection with the Plan may in certain circumstances be exempt from registration under the 1933 Act, and the Corporation may restrict the transfer of such shares in such manner as it deems advisable to ensure the availability of any such exemption. 11.13. Governing Law. To the extent not governed by federal law, the Plan and all Option Agreements shall be construed in accordance with and governed by the laws of the State of Delaware. 11.14. Additional Provisions. Each Option Agreement may contain such other terms and conditions as the Committee may determine; provided that such other terms and conditions are not inconsistent with the provisions of this Plan. 9 EX-10.47 5 g75760ex10-47.txt EMPLOYMENT AGREEMENT EXHIBIT 10.47 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (the "Agreement") dated as of April 4, 2000, by and between MEDICAL MANAGER CORPORATION, a Delaware corporation (the "Company"), and KEVIN CAMERON ("Executive"). WHEREAS, the Company desires to employ Executive on a full-time basis and Executive desires to be so employed by the Company; NOW, THEREFORE, in consideration of the mutual covenants in this Agreement, the parties agree as follows: 1. Effectiveness of Agreement and Employment of Executive. 1.1. Effectiveness of Agreement. This Agreement shall become effective as of April 4, 2000 (the "Effective Date"). 1.2. Employment by the Company. The Company hereby employs Executive and Executive hereby accepts such employment with the Company. Executive shall report to the Chairman of the Board of the Company. Executive's title shall initially be Executive Vice President--Corporate Development. Executive shall perform such duties and services for the Company, its subsidiaries and affiliates (as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended) (such subsidiaries and affiliates collectively, "Affiliates"), and at such Non-Distant offices (as hereinafter defined), as may be designated from time to time by the Company. Executive shall use his best and most diligent efforts to promote the interests of the Company and the Affiliates, and shall devote all of his business time and attention to his employment under this Agreement; provided, however, that Executive shall be permitted to manage his personal, financial and legal affairs that may from time to time require insubstantial portions of his working time, but would not singularly or in the aggregate interfere or be inconsistent with his duties and obligations under this Agreement. 1.3. Confidentiality. Executive understands and acknowledges that in the course of his employment, he will have access to and will learn information that is proprietary to, or confidential to the Company and its Affiliates that concerns the operation, methodology and plans of the Company and its Affiliates, including, without limitation, business strategy and plans, financial information, protocols, proposals, manuals, clinical procedures and guidelines, technical data, computer source codes, programs, software, know-how and specifications, copyrights, trade secrets, market information, Developments (as hereinafter defined), information regarding acquisition and other strategic partner candidates, and customer information (collectively, "Proprietary Information"). Executive agrees that, at all times (including following termination of his employment with the Company), he will keep confidential and will not disclose directly or indirectly any such Proprietary Information to any third party, except as required to fulfill his duties hereunder, and will not misuse, misappropriate or except as required to fulfill his duties hereunder, exploit such Proprietary Information in any way. The restrictions contained herein shall not apply to any information which Executive can demonstrate (i) was already available to the public at the time of disclosure, or subsequently becomes available to the public, otherwise than by breach of this Agreement by Executive or (ii) was the subject of a subpoena or self regulatory organization, governmental agency or court order for Executive to disclose. Upon any termination of Executive's employment, Executive shall immediately return to the Company all copies of any Proprietary Information in his possession. 1.4. Restrictions on Solicitation. During the period beginning on the Effective Date and ending on the first anniversary of the date of cessation of the employment of Executive for any reason whatsoever (the "Restricted Period"), Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or contact any customer, or any prospective customer (with whom Executive had material contact during his employment by the Company) of the Company or any of the Affiliates for any commercial pursuit which is in competition with the Company or any of the Affiliates, or that is contemplated from time to time by the Business Plan (as defined below) or take away or interfere or attempt to interfere with any custom, trade, business or patronage of the Company or any of the Affiliates. During the Restricted Period, Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or induce, or attempt to induce, any employees, agents or consultants of or to the Company or any of the Affiliates to leave the employ of the Company or such Affiliate or do anything from which Executive is restricted by reason of this Agreement nor shall Executive, directly or indirectly, offer or aid others to offer employment to or interfere or attempt to interfere with any employees, agents or consultants of the Company or any of the Affiliates. For purposes of this Agreement, "Business Plan" shall mean, at any point in time, the then current business plan of the Company or any of the Affiliates and any business plans of the Company or any of the Affiliates in effect during the prior 18 months, in any case, as provided to Executive prior to the termination of his employment. 1.5. Restrictions on Competitive Employment. (a) During the Restricted Period, Executive shall not, anywhere in the United States, directly or indirectly, without the prior written approval of the Company, own an interest in or, as principal, agent, employee, consultant or otherwise, engage in activities for or render services to, any firm or business (i) engaged in competition with the Company or any of its Affiliates, (ii) conducting a business of the type and character engaged in by (or contemplated by the Business Plan of) the Company or any of its Affiliates at the time of termination, (iii) developing products or services competitive with those of the Company or any of its Affiliates or (iv) conducting any business in which the Company or any of its Affiliates is then engaged if Executive has engaged in activities for such business of the Company or such Affiliates or obtained Proprietary Information with respect thereto (all of the businesses in clauses (i), (ii), (iii) and (iv) collectively, "Competitive Business"). Notwithstanding the foregoing, (A) Executive may have an interest consisting of publicly traded securities constituting less than 1 percent of any class of publicly traded securities in any public company engaged in a Competitive Business so long as he is not employed by and does not consult with, or become a director of or otherwise engage in any 2 activities for, such company; (B) Executive may continue to hold, although with respect to each of such companies, not increase to more than 2% of the equity of such company on a fully diluted basis, his portfolio investments in "Healthmarket" and "Digital Medial Systems," but during the Restricted Period Executive may not become a director of or, other than to ascertain the status of Executive's investments or in furtherance of his duties hereunder, consult with, or otherwise engage in any activities for either of such companies; and (C) in determining whether business is a Competitive Business, only the activities engaged in by the Company at the time of termination of Executive's employment or contained in the Business Plan shall be considered. (b) For purposes of the covenant not to compete set forth in paragraph (a) above, Executive acknowledges that the Company and its Affiliates presently conduct their businesses throughout the United States. Executive agrees that the Restricted Period and the geographical areas encompassed by such covenant are necessary and reasonable in order to protect the Company and its Affiliates in the conduct of their businesses. The parties intend that the foregoing covenant of Executive shall be construed as a series of separate covenants, one for each geographic area specified. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant set forth in paragraph (a) above. To the extent that the foregoing covenant or any provision of this Section 1.5 shall be deemed illegal or unenforceable by a court or other tribunal of competent jurisdiction with respect to (i) any geographic area, (ii) any part of the time period covered by such covenant, (iii) any activity or capacity covered by such covenant or (iv) any other term or provision of such covenant, such determination shall not affect such covenant with respect to any other geographic area, time period, activity or other term or provision covered by or included in such covenant. 1.6. Assignment of Developments. All Developments that are at any time made, conceived or suggested by Executive, whether acting alone or in conjunction with others, arising out of or as a result of Executive's employment with the Company shall be the sole and absolute property of the Company and the Affiliates, free of any reserved or other rights of any kind on Executive's part. During Executive's employment and, if such Developments were made, conceived or suggested by Executive during or as a result of Executive's employment under this Agreement or any other employment with the Company or the Affiliates, thereafter, Executive shall promptly make full disclosure of any such Developments to the Company and, at the Company's cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of assignment) deemed by the Company to be necessary or desirable at any time in order to effect the full assignment to the Company and the Affiliates of Executive's right and title, if any, to such Developments. For purposes of this Agreement, the term "Developments" shall mean all data, discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the present activities, planned activities, as reflected in the Business Plan, or future activities initiated by the Company or the Affiliates during Executive's employment by the Company, or the products and services of the Company or any of the Affiliates initiated during the term of Executive's Employment or as reflected in the Business Plan. 3 1.7. Remedies. Executive acknowledges and agrees that damages for a breach or threatened breach of any of the covenants set forth in Sections 1.3 through 1.6 will be difficult to determine and will not afford a full and adequate remedy, and therefore agrees that the Company, in addition to seeking actual damages in connection therewith, may seek specific enforcement of any such covenant in any court of competent jurisdiction, including, without limitation, by the issuance of a temporary or permanent injunction. 2. Compensation and Benefits. 2.1. Salary. The Company shall pay Executive for services during his employment under this Agreement a base salary at the annual rate of not less than $225,000 and shall cause CareInsite, Inc. ("CareInsite" to pay Executive for services rendered to CareInsite a base salary at an annual rate of not less than $225,000 ( the base salary from the Company and the base salary from CareInsite shall be collectively referred to herein as the "Base Salary"). Any and all increases to Executive's Base Salary shall be determined by the Board of Directors of the Company, in its sole discretion. Such Base Salary shall be payable in equal installments, no less frequently than monthly, pursuant to the Company's customary payroll policies in force at the time of payment, less any required or authorized payroll deductions. 2.2. Benefits. During his employment under this Agreement, Executive shall be entitled to participate, on the same basis and at the same level as other similarly situated executives of the Company, in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs or vacation leave of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. 2.3. Expenses. Pursuant to the Company's customary policies in force at the time of payment, Executive shall be promptly reimbursed, against presentation of vouchers or receipts therefor, for all authorized expenses properly and reasonably incurred by him on behalf of the Company or its Affiliates in the performance of his duties hereunder. 2.4. Loan. Subject to the consent of Healtheon/ WebMD Corporation ("Healtheon"), pursuant to the terms of the Agreement and Plan of Merger among the Corporation, Avicenna Systems Corporation and Healtheon (as it may be amended, from time to time, the "Healtheon Merger Agreement"), within 30 days of a written request by Executive during the term of his employment the Company shall provide a loan to Executive (the "Loan") in the principal amount of $500,000. The Loan shall be made pursuant to, and shall otherwise be subject to, the terms of a Secured Promissory Note in the form attached as Annex A hereto. 2.5 Car Allowance. During the Employment Period, the Company shall provide Executive with a car allowance in accordance with Company policy. 2.6 Legal Fees. Promptly upon presentation of the invoices therefore, the Company shall reimburse Executive for up to $15,000 of legal fees incurred by Executive in 4 connection with the negotiation of this Agreement and any other prospective employment relationships that Executive was considering within 90 days prior to the date hereof. 2.7 Relocation. If the Company requests that Executive relocate and Executive agrees, the Company shall reimburse Executive as follows. Upon the presentation of invoices, the Company shall reimburse, on an after tax basis, Executive's reasonable out-of-pocket expenses, including, without limitation, real estate brokerage fees, related to the relocation of him and his family to such area. For avoidance of doubt, the reimbursement payment shall be grossed up such that, net of his tax liability attributable to such reimbursement payment, Executive retains an amount equal to such reasonable out-of-pocket expenses. 2.8 Directors and Officers Liability Insurance. The Company currently maintains directors and officers liability insurance coverage, which coverage will apply to Executive upon the Effective Date. Executive will be covered by directors and officers liability insurance with respect to his employment by the Company if and to the extent that other senior officers of the Company are so covered. 3. Employment Period. Executive's employment under this Agreement shall commence as of the Effective Date, and shall terminate on the fifth anniversary thereof (the "Initial Employment Period"), unless terminated earlier pursuant to Section 4. Unless written notice of either party's desire to terminate this Agreement has been given to the other party prior to the expiration of the Initial Employment Period (or any one-month renewal thereof contemplated by this sentence), the term of this Agreement shall be automatically renewed for successive one-month periods. 4. Termination. 4.1. Termination by the Company for Cause. (a) Executive's employment with the Company may be terminated at any time by the Company for Cause. Upon such a termination, the Company shall have no obligation to Executive other than the payment of Executive's earned and unpaid compensation to the effective date of such termination. (b) For purposes of this Agreement, the term "Cause" shall mean any of the following: 1. A willful failure of Executive to perform his duties in any material respect which failure is not cured by Executive within 30 days following written notice from the Company detailing such failure; 2. Any willful misconduct by Executive relating, directly or indirectly, to the Company or any of its Affiliates, which misconduct, if susceptible to cure, is not cured by Executive within 30 days following written notice from the Company detailing such breach; 5 3. Any breach by Executive of any material provision contained in this Agreement (including, without limitation, Sections 1.3 through 1.6), which breach, if susceptible to cure, is not cured by Executive within 30 days following written notice from the Company detailing such breach; 4. Any breach by Executive of a material Company policy known by Executive, which breach, if susceptible to cure, is not cured by Executive within 30 days following written notice from the Company detailing such breach; or 5. Executive's conviction of felony crime. (c) If Executive is given a written notice pursuant to the terms of Section 4.1(b) Executive shall have the right to demand, by giving written notice to the Company within 10 days after notice to the Executive is given, to demand an opportunity to meet with the Board of Directors of the Corporation to set forth any facts that Executive believes to be relevant to the Board's determination as to whether an event of Cause has occurred. In the event that Executive delivers such notice to the Company, and such event of Cause is susceptible to cure, the period by which such alleged event of Cause must be cured shall be suspended upon the date such notice is given and shall not resume until the earlier of (x) Executive withdraws his notice or fails to report to the meeting with the Board and (y)Executive's meeting with the Board has terminated. 4.2. Permanent Disability. If during his employment with the Company, (i) Executive shall become ill, mentally or physically disabled, or otherwise incapacitated so as to be unable regularly to perform the duties of his position for a period in excess of 90 consecutive days or more than 120 days in any consecutive 12 month period, or (ii) a qualified independent physician determines that Executive is mentally or physically disabled so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent duration, then the Company shall have the right to terminate Executive's employment with the Company upon written notice to Executive. Upon such a termination, the Company shall have no obligation to Executive other than (i) the payment of Executive's earned and unpaid compensation to the effective date of such termination; (ii) as provided in Section 5 of this Agreement and the Stock Option Agreement (as defined below) and the CareInsite Stock Option Agreement (as defined below); and (iii) a continuation of Executive's Base Salary (at the rate set forth in Section 2.1 hereof) for a period commencing on the date of termination and ending on the first anniversary of the date of termination. 4.3. Death. Executive's employment with the Company shall be deemed terminated by the Company upon the death of Executive and the Company shall have no obligation to Executive or Executive's estate other than (i) the payment of Executive's earned and unpaid compensation to the effective date of such termination; (ii) as provided in Section 5 of this Agreement and the Stock Option Agreement and the CareInsite Stock Option Agreement; and (iii) a continuation of Executive's Base Salary (at the rate set forth in Section 2.1 hereof) for 6 a period commencing on the date of termination and ending on the first anniversary of the date of termination. 4.4. Termination by the Company Without Cause. Executive's employment with the Company may be terminated at any time by the Company without Cause. If the Company terminates Executive's employment without Cause (not including by notice of the Company pursuant to Section 3 of its desire to not renew this Agreement), the Company shall have no obligation to Executive other than (i) the payment of Executive's earned and unpaid compensation to the effective date of such termination; (ii) as provided in Section 5 of this Agreement and the Stock Option Agreement and the CareInsite Stock Option Agreement; and (iii) a continuation of Executive's Base Salary (at the rate set forth in Section 2.1 hereof) for a period commencing on the date of termination and ending on the first anniversary of the date of termination. 4.5. Termination by Executive for Good Reason. (a) Executive's employment with the Company may be terminated at any time by Executive for Good Reason. If Executive terminates his employment for Good Reason, the Company shall have the same obligations to Executive that it would have had under Section 4.4 as if Executive's employment with the Company were terminated by the Company without Cause. (b) For purposes of this Agreement, the term "Good Reason" shall mean (i)subject to the terms of (iii) below, a material reduction in Executive's duties or responsibilities or a demotion of Executive's position, as set forth in Section 1.2 which reduction or demotion remains in effect 30 days after written notice is provided by Executive to the Company detailing such condition or event; (ii) a change in Executive's reporting obligation such that he no longer reports to the Chairman of the Board of the Company, which change remains in effect 30 days after written notice is provided by Executive to the Company detailing such condition or event; (iii) a requirement that Executive relocate to an office (a "Distant Office") that is more than 60 miles away from Executive's home in Connecticut, provided, however, that if the Company reasonably requests in writing that Executive relocate to a Distant Office, and allows Executive a period of not less than the greater of (x) six months and (y) 30 days after the conclusion of a school year of a child of Executive, to complete such relocation, during which time the Company may require Executive to commute to such location on a reasonable basis at the expense of the Company, and Executive declines, so long as the Company allows Executive to work from a location that is not a Distant Office Executive shall not have Good Reason pursuant to this Section 4.5, notwithstanding whether there is also a material reduction in Executive's duties or responsibilities and a demotion of Executive's position; or (iv) a "Change of Control" occurs. (c) For purposes of this Agreement a "Change in Control" of the Company shall be deemed to have occurred if: 7 (A) Both (i) any person, entity or group shall have acquired, in one or more transactions, the beneficial ownership of at least 50 percent of the voting power of the outstanding voting securities of the Company, excluding Martin J. Wygod and his affiliates, and (ii) following such acquisition of 50 percent voting power, Martin J. Wygod shall no longer be the Chairman of the Board of the Company or a senior executive officer of the acquiring company of 50 percent voting power, in each case with duties and responsibilities greater than or substantially equivalent to those prior to such acquisition of 50 percent voting power; or (B) The sale of all or substantially all of the assets of the Company (including, without limitation, by way of merger, consolidation, lease or transfer) to or with a person, entity or group other than Martin J. Wygod or his affiliates in a transaction (except for a sale-leaseback transaction) (x) where the Company or the holders of the common stock of the Company, as the case may be, do not receive (i) voting securities representing a majority of the voting power entitled to vote on a regular basis for the board of directors of the acquiring or resulting entity or of an affiliate which controls the acquiring or resulting entity, or (ii) securities representing a majority of the equity interest in the acquiring or resulting entity or of an affiliate that controls the acquiring or resulting entity, if other than a corporation and (y), following such sale of assets, Martin J. Wygod shall no longer be the Chairman of the Board of the Company or a senior executive officer of the acquiring entity, in each case with duties and responsibilities greater than or substantially equivalent to those prior to such sale of assets; or (C) A complete liquidation or dissolution of the Company shall have occurred or have been approved by the Board of Directors of the Company. Notwithstanding anything to the contrary herein, consummation of the transactions contemplated by the Healtheon Merger Agreement shall not constitute a Change of Control for purposes of this Agreement so long as, upon such consummation, Martin J. Wygod is Co-Chairman of, or in an official position with significant authority in, the surviving corporation. 4.6. Liquidated Damages. Executive acknowledges that any payments and benefits under Sections 4 and 5 resulting from a termination of his employment with the Company are in lieu of any and all claims that Executive may have against the Company (other than benefits under the Company's employee benefit plans that by their terms survive termination of employment and benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and rights to indemnification under certain indemnification arrangements for officers of the Company), and represent liquidated damages (and not a penalty). The Company may request that Executive confirm such acknowledgment in writing prior to the receipt of such benefits. 8 4.7. Termination by Executive Without Good Reason. Executive may resign from his employment with the Company at any time without Good Reason. Upon such a termination, the Company shall have no obligation other than (i) the payment of Executive's earned but unpaid compensation to the effective date of such termination and (ii) as provided in Section 5 of this Agreement and the Stock Option Agreement and the CareInsite Stock Option Agreement. 5. Stock Option. 5.1. Executive shall be granted, on the date hereof, an option (the "Stock Option") to purchase 250,000 shares of the Company's common stock pursuant to the terms of a stock option agreement to be entered into between the Company and Executive, which agreement shall be in substantially the same form provided by the Company to its officers generally (the "Stock Option Agreement"). The Stock Option shall be vested and exercisable in accordance with the following schedule:

In the event that Executive's employment with the Company is terminated by the Company without Cause under Section 4.4 or by Executive for Good Reason under Section 4.5(b)(i), (ii), or (iii) prior to the second anniversary of the date of grant, 40% of the Stock Option (i.e., options to purchase 100,000 shares), if then unvested, shall remain outstanding and continue to vest and become exercisable as if Executive remained in the employ of the Company through the earlier of (i) the second anniversary of the date of grant and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Executive for Good Reason under Section 4.5(b)(iv) prior to the second anniversary of the date of grant, 60% of the Stock Option (i.e., options to purchase 150,000 shares), if then unvested, shall remain outstanding and continue to vest and become exercisable as if Executive remained in the employ of the Company through the earlier of (i) the third anniversary of the date of grant and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Company without Cause under Section 4.4 or by Executive for Good Reason under Section 4.5 after the second anniversary of the date of grant, 20% of the Stock Option (i.e., options to purchase 50,000 shares), if then unvested, shall remain outstanding and continue to vest and become exercisable as if Executive remained in the employ of the Company through the earlier of (i)the next date upon which a portion of the Stock Option becomes exercisable and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, 9 Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Company under Section 4.2 or 4.3 the remainder of the Stock Option, if then unvested, shall immediately vest and become exercisable. Any portion of the Stock Option that is vested and exercisable at the time Executive's employment with the Company is terminated other than for Cause shall remain exercisable until the earlier of (x) three years from the date of termination and (y) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). Any portion of the Stock Option that becomes vested and exercisable after Executive's employment with the Company is terminated pursuant to the terms of this Section 5.1 (any such post-termination vesting being herein referred to as a "Stock Option Post-Termination Vesting") shall remain exercisable until the earlier of (x) three years from the date of such Stock Option Post-Termination Vesting or (y) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). Notwithstanding anything to the contrary herein, no portion of the Stock Option shall remain exercisable after the 10th anniversary of the date of grant of the Stock Option. Except as provided in this Section 5.1 all of the terms and conditions of the Stock Option shall be governed exclusively by the express provisions of the Stock Option Agreement. 5.2. Executive shall also be granted, on the date hereof, an option to purchase 250,000 shares of the common stock of CareInsite pursuant to the terms of a stock option agreement to be entered into between CareInsite and Executive, which agreement shall be in substantially the same form provided by CareInsite to its officers generally under the applicable CareInsite stock option plan (the "CareInsite Stock Option Agreement"). The CareInsite Stock Option shall be vested and exercisable in accordance with the following schedule:

In the event that Executive's employment with the Company is terminated by the Company without Cause under Section 4.4 or by Executive for Good Reason under Section 4.5(b)(i)(ii) or(iii) prior to December 15, 2001 40% of the CareInsite Stock Option (i.e., options to purchase 100,000 shares), if then unvested, shall remain outstanding and continue to vest as if Executive remained in the employ of the Company through the earlier of (i) December 15, 2001 and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Executive for Good Reason under Section 4.5(b)(iv) prior to December 15, 2001, 60% of the Stock Option (i.e., options to purchase 150,000 shares), if then unvested, shall remain outstanding and continue to vest and become exercisable as if Executive remained in the employ of the Company through the earlier of (i) December 15, 2002 and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Company without Cause under Section 4.4 or by Executive for Good Reason under Section 4.5 after 10 December 15, 2001, 20% of the CareInsite Stock Option (i.e., options to purchase 50,000 shares), if then unvested, shall remain outstanding and continue to vest and become exercisable as if Executive remained in the employ of the Company through the earlier of (i)the next date upon which a portion of the CareInsite Stock Option becomes exercisable and (ii) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). In the event that Executive's employment with the Company is terminated by the Company under Section 4.2 or 4.3 the remainder of the CareInsite Stock Option, if then unvested, shall immediately vest and become exercisable. Any portion of the CareInsite Stock Option that is vested and exercisable at the time Executive's employment with the Company is terminated other than for Cause shall remain exercisable until the earlier of (x) three years from the date of such termination and (y) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). Any portion of the CareInsite Stock Option that becomes vested and exercisable after Executive's employment with the Company is terminated pursuant to the terms of this Section 5.2 (any such post-termination vesting being herein referred to as a " CareInsite Stock Option Post-Termination Vesting") shall remain exercisable until the earlier of (x) three years from the date of such CareInsite Stock Option Post-Termination Vesting and (y) any breach by Executive of any provision of this Agreement (including, without limitation, Section 1.3, 1.4, 1.5 or 1.6). Notwithstanding anything to the contrary herein, no portion of the CareInsite Stock Option shall remain exercisable after the 10th anniversary of the date of grant of the CareInsite Stock Option. Except as provided in this Section 5.2 all of the terms and conditions of the CareInsite Stock Option shall be governed exclusively by the express provisions of the CareInsite Stock Option Agreement. 6. Notices. Any notice or communication given by either party hereto to the other shall be in writing and personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the following addresses: (a) if to the Company: Medical Manager Corporation River Drive Center 2 669 River Drive Elmwood Park, New Jersey 07407-1361 Telecopier No.: (201) 703-3401 Attention: Legal Counsel (b) if to Executive at the address maintained in the Company's records. With a copy to: Stephen W. Skonieczny, Esq. Davis & Gilbert LLP 11 1740 Broadway New York, NY 10019 Any notice shall be deemed given when actually delivered to such address, or two days after such notice has been mailed or sent by Federal Express, whichever comes earliest. Any person entitled to receive notice may designate in writing, by notice to the other, such other address to which notices to such person shall thereafter be sent. 7. Miscellaneous. 7.1. Representations and Covenants. In order to induce the Company to enter into this Agreement, Executive makes the following representations and covenants to the Company and acknowledges that the Company is relying upon such representations and covenants: (a) No agreements or obligations exist to which Executive is a party or otherwise bound, in writing or otherwise, that in any way interfere with, impede or preclude him from fulfilling all of the terms and conditions of this Agreement. (b) Executive, during his employment, shall use his best efforts to disclose to the Chairman of the Board or Chief Executive Officer of the Company in writing or by other effective method any bona fide information known by him and not known to the Chairman of the Board or Chief Executive Officer of the Company that he reasonably believes would have any material negative impact on the Company or an Affiliate. 7.2. Entire Agreement. This Agreement, the Stock Option Agreement and the CareInsite Stock Option Agreement contain the entire understanding of the parties in respect of their subject matter and supersede upon their effectiveness all other prior agreements and understandings between the parties with respect to such subject matter. 7.3. Amendment; Waiver. This Agreement may not be amended, supplemented, canceled or discharged, except by written instrument executed by the party against whom enforcement is sought. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof. No waiver of any breach of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision. 7.4. Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of any successor of the Company by reorganization, merger or consolidation, or any assignee of all or substantially all of the Company's business and properties. The Company may assign its rights and obligations under this Agreement to any of its Affiliates without the consent of Executive. Executive's rights or obligations under this Agreement may not be assigned by Executive, except that the rights specified in Section 4.3 shall pass upon Executive's death to Executive's executor or administrator. 12 7.5. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 7.6. Governing Law; Interpretation. This Agreement shall be construed in accordance with and governed for all purposes by the laws and public policy (other than conflict of laws principles) of the State of New Jersey applicable to contracts executed and to be wholly performed within such State. 7.7. Further Assurances. Each of the parties agrees to execute, acknowledge, deliver and perform, and cause to be executed, acknowledged, delivered and performed, at any time and from time to time, as the case may be, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary to carry out the provisions or intent of this Agreement. 7.8. Severability. The parties have carefully reviewed the provisions of this Agreement and agree that they are fair and equitable. However, in light of the possibility of differing interpretations of law and changes in circumstances, the parties agree that if any one or more of the provisions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Agreement shall, to the extent permitted by law, remain in full force and effect and shall in no [REMAINDER OF PAGE LEFT BLANK] 13 way be affected, impaired or invalidated. Moreover, if any of the provisions contained in this Agreement are determined by a court of competent jurisdiction to be excessively broad as to duration, activity, geographic application or subject, it shall be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law. 7.9. Withholding Taxes. All payments hereunder shall be subject to any and all applicable federal, state, local and foreign withholding taxes. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. MEDICAL MANAGER CORPORATION By: /s/ Charles A. Mele ---------------------------- Name: Charles A. Mele Title: Executive Vice President EXECUTIVE /s/ Kevin Cameron ------------------------------- Kevin Cameron 14 EX-10.50 6 g75760ex10-50.txt LETTER AGREEMENT EXHIBIT 10.50 MEDICAL MANAGER CORPORATION 669 RIVER DRIVE, CENTER 2 ELMWOOD PARK, NEW JERSEY 07407-1361 September 5, 2000 Mr. Michael A. Singer Dear Mickey: Reference is made to the Employment Agreement dated as of May 16, 1999 (the "Employment Agreement"), by and between Medical Manager Corporation, a Delaware corporation (the "Company"), and you. Reference is also made to the Stock Option Agreement dated as of June 5, 2000 between the Company and you, pursuant to which you were granted an option (the "Additional Option") to purchase 450,000 shares of the Company's common stock. A. For purposes of the Employment Agreement, your "base salary" is hereby increased from $250,000 to $450,000, except that such increase shall not be effective for purposes of determining your base salary continuation under Section 5.5 of the Employment Agreement in the event that (x) (i) you resign pursuant to clause 6 of the definition of "Good Reason" set forth in the Employment Agreement and (ii) the "Change in Control" referred to in such clause 6 results from the transactions contemplated by, in connection with or as a result of the Agreement and Plan of Merger dated February 13, 2000 between Healtheon/WebMD Corporation, a Delaware corporation, and the Company, as amended by Amendment No. 1 thereto dated as of June 18, 2000 (the "Merger Agreement") or (y) you resign pursuant to clause (1) or (4) of the definition of "Good Reason" as a result of a Permitted Status Change (as defined below). For purposes of this letter agreement, a "Permitted Status Change" is (a) a reduction in your title, position or responsibilities at or following the Effective Time (as defined in the Merger Agreement) provided you are the most senior executive officer of Medical Manager Health Systems, Inc., a Delaware corporation, and Medical Manager Research and Development Inc., a Florida corporation, or (b) your being required to report at or following the Effective Time to Martin J. Wygod, Marvin P. Rich or, for so long as Martin J. Wygod is Co-Chief Executive Officer of the Surviving Corporation (as defined in the Merger Agreement), Jeffrey T. Arnold (in his capacity as Co-Chief Executive Officer of the Surviving Corporation). B. For purposes of Sections 4(b) and (d) and 5 of the Employment Agreement, the Additional Option shall be treated in the same manner as the "New Option", 1 except that, with respect to the Additional Option, (i) the transactions contemplated by the Merger Agreement (including, without limitation, any change in the composition of the Company's Board of Directors) shall not constitute a "Change in Control" and (ii) a Permitted Status Change shall not constitute "Good Reason" or a reduction in your title or responsibilities. The foregoing amendments to the Employment Agreement shall be effective as of the date hereof. All other provisions of the Employment Agreement shall continue in full force and effect. MEDICAL MANAGER CORPORATION By: /s/ Charles A. Mele ----------------------------- Name: Charles A. Mele Title: Executive Vice President- General Counsel Accepted and Agreed: /s/ Michael A. Singer - ---------------------------- Michael A. Singer 2 EX-10.51 7 g75760ex10-51.txt EMPLOYMENT AGREEMENT EXHIBIT 10.51 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (the "Agreement") dated as of July 1, 2000, by and between WEBMD CORPORATION, a Delaware corporation (the "Company"), and CHARLES A. MELE ("Executive"). WHEREAS, Executive and the Company are party to an Employment Agreement dated as of July 1, 2000 (the "Original Employment Agreement"); and WHEREAS, the Company and Executive desire to amend and restate the Original Employment Agreement, primarily to extend the term of the Original Employment Agreement; NOW, THEREFORE, in consideration of the mutual covenants in this Agreement, the parties agree as follows: 1. Effectiveness of Agreement and employment of Executive. 1.1. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above (the "Effective Date"). 1.2 Employment by the Company. (a) The Company hereby employs Executive and Executive hereby accepts such employment by the Company. Executive shall report to Martin J. Wygod, either in his capacity as Chairman of the Board of the Company, Chief Executive Officer or as Co-Chief Executive Officer of the Company. Executive's title shall be Executive Vice President. Executive shall perform such duties and services for the Company and its subsidiaries (such subsidiaries, collectively, "Affiliates"), which shall primarily consist of providing legal counsel to senior executive officers of the Company, as may be designated from time to time by Martin J. Wygod. (b) Executive shall perform his duties hereunder at the Company's headquarters at 669 River Drive, Elmwood Park, New Jersey. Executive shall use diligent efforts to promote the interests of the Company and the Affiliates, and shall devote substantially all of his business time and attention to his employment under this Agreement, provided, however, that Executive shall be permitted to manage his personal, financial and legal affairs that may from time to time require insubstantial portions of his working time, but would not singularly or in the aggregate interfere or be inconsistent with his duties and obligations under this Agreement. 2. Compensation and Benefits. 2.1. Salary. The Company shall pay Executive for services during the Employment Period (as defined in Section 3 below) a base salary at the annual rate of $450,000 (and as it may be increased pursuant to this Section 2.1, the "Base Salary"). Such Base Salary may be increased (but not decreased) from time to time in the sole discretion of the Company. Notwithstanding the foregoing, the Base Salary shall be increased on each anniversary of the Effective Date if and to the extent that the base salary of any other executive of the Company with a similar base salary is increased during the 12 month period prior to such anniversary, respectively, without an increase in the responsibilities of such other executive. The Base Salary shall be payable in equal installments, no less frequently than monthly, pursuant to the Company's customary payroll policies in force at the time of payment, less any required or authorized payroll deductions. 2.2. Benefits. During the Employment Period, Executive shall be entitled to participate, on the same basis and at the same level as other senior executive officers of the Company in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. 2.3. Expenses. Pursuant to the Company's customary policies in force at the time of payment, Executive shall be promptly reimbursed, against presentation of vouchers or receipts therefor, for all authorized expenses properly and reasonably incurred by him on behalf of the Company or its Affiliates in the performance of his duties hereunder. In furtherance of the foregoing, and not in limitation thereof, Executive shall be subject to the travel and entertainment policy applicable to senior executive officers of the Company. 2.5 Vacation. Executive shall be entitled to eight weeks of paid vacation during each 12 month period of the Employment Period. Any unused portion of such vacation time shall be accrued and carry over to a subsequent 12 month period or periods at the discretion of Executive. 2.6 Car Allowance. During the Employment Period, the Company shall provide Executive with a car allowance in accordance with Company policy. 2.7 Bonus. Within 60 days after July 1, 2000 the Company shall pay to Executive a signing bonus of $85,000. Within 30 days from each anniversary of the Effective Date, Executive shall be entitled to receive a bonus payable with respect to the 12 month period ending on such respective anniversary, which bonus shall be in the same form and amount, if any, that is paid during such 12 month period to any other executive of the Company with similar compensation and responsibilities, provided, however that in determining whether Executive is entitled to a bonus payment or the amount thereof pursuant to this Section 2.7, no "signing bonus" or other one-time inducement offered to another employee of the Company to induce such employee to become employed by the Company shall be taken into account. In the event that Executive's employment is terminated prior to July 1, 2006, the amount of the bonus payable to Executive with respect to the year in which his employment is terminated shall be determined as though he continued to be employed by the Company until the next anniversary of the Effective Date following his termination. 3. Employment Period. Executive's employment under this Agreement shall commence as of the Effective Date, and shall terminate on July 1, 2006, unless terminated earlier pursuant to Section 5 or automatically renewed pursuant to the terms of the immediately following sentence (the "Employment Period"). Unless written notice of either party's desire to terminate the Employment Period has been given to the other party at least 30 days prior to the 2 expiration of the Employment Period (or any one-month renewal thereof contemplated by this sentence), the Employment Period shall be automatically be renewed for successive one-month periods. 4. Stock Options. Executive has been granted options (collectively referred to herein as the "Stock Options") to purchase shares of the Company's common stock pursuant to the respective stock option plans of the Company, including any such plans assumed by the Company (collectively referred to herein as the "Stock Option Plans") and the terms of the respective stock option agreement entered into between Executive and the Company, including any such agreements assumed by the Company (collectively referred to herein as the "Stock Option Agreements"). Subject to Executive's remaining in the employ of the Company (except as set forth in Sections 5.2, 5.3 and 5.5 below), the Stock Options shall, to the extent exercisable, remain exercisable in accordance to the terms of the applicable Stock Option Agreement or become exercisable in accordance with the terms of the Stock Option Agreement. Executive will be eligible to receive future grants of options to purchase shares of the Company's common stock at the discretion of the Company. Such options, if any, shall be deemed to be "Stock Options" (as defined below) pursuant to the terms hereof, any stock option plan and stock option agreement pursuant to which any such option is granted shall be deemed to be a Stock Option Plan and Stock Option Agreement, respectively. 5. Termination. 5.1 Termination by the Company for Cause. (a) The Employment Period may be terminated at any time by the Company for Cause (as defined below). Upon such a termination, the Company shall have no obligation to Executive other than (i) the payment of Executive's earned and unpaid Base Salary and accrued vacation time to the effective date of such termination and (ii) Executive shall not be entitled to any additional rights or vesting with respect to the Stock Options following the effective date of such termination. (b) For purposes of this Agreement, the term "Cause" shall mean any of the following: 1. Any material breach by Executive of this Agreement, which breach, if susceptible to cure, is not cured by Executive within 30 days following written notice from the Company detailing such breach; or 2. Executive's conviction of a felony. 5.2 Death and Disability. (a) The Employment Period may be deemed terminated by the Company upon the death of Executive or Executive becoming Disabled (as defined below), and Executive or Executive's estate shall be entitled to the same salary and welfare benefit continuation, bonus, and the acceleration of vesting and continued exercisability of the Stock Options that he would 3 have been entitled to receive under Section 5.3 if the Employment Period were terminated by the Company without Cause, provided, however, that the Company shall have no other obligation to Executive or Executive's estate pursuant to this Agreement in the event that the Employment Period is terminated by the Company pursuant to this Section 5.2. (b) For purposes of this Agreement, Executive shall be "Disabled" if (i) Executive becomes incapacitated by bodily injury or disease (including as a result of mental illness) so as to be unable to regularly perform the duties of his position for a period in excess of 180 days in any consecutive twelve-month period or (ii) a qualified independent physician mutually acceptable to the Company and Executive determines that Executive is mentally or physically disabled so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent duration. 5.3 Termination by the Company Without Cause. (a) The Employment Period may be terminated at any time by the Company without Cause. If the Company terminates the Employment Period without Cause, the Company shall have the following obligations to Executive (but excluding any other obligation to Executive pursuant to this Agreement): (i) a continuation of the Base Salary for a period (the "Applicable Period") commencing on the date of termination and ending on the later to occur of (x) July 1, 2006 and (y) 18 months from the date of termination, payable in accordance with the fourth sentence of Section 2.1, (ii) Executive shall be eligible to continue to participate for a period commencing on the date of termination and ending on the third anniversary of the date of termination (the "Extended Benefit Period"), on the same terms and conditions that would have applied had he remained in the employ of the Company during the Extended Benefit Period, in all health, medical, dental and other welfare plans provided to Executive pursuant to Section 2.2 at the time of such termination and which are provided by the Company to its employees following the date of termination ("Welfare Plans"), (iii) if such termination occurs prior to July 1, 2006, payment by the Company to Executive of any bonus that would have been payable to Executive pursuant to Section 2.7, payable at the time that such bonuses are required to be paid pursuant to Section 2.7, if Executive had continued his employment with the Company through July 1 ,2006 (the amount of such bonuses in each such year shall be the amount of cash bonus payable to Executive in the year of termination), and (iv) (x) the Stock Options shall all become fully vested and exercisable as of the date of termination and shall each remain exercisable until such Stock Option would expire under the terms of the Stock Option Agreement pursuant to which such Stock Option was granted, and otherwise be 4 treated for purposes of the terms and conditions thereof, as if Executive was employed by the Company until the latest possible date upon which the Stock Option which is last to expire would expire pursuant to the terms of the Stock Option Agreement under which such last to expire Stock Option was granted; provided, however, that the continuation of such salary and welfare benefits and the exercisability of such options shall cease on the occurrence of any material breach of the covenants contained in Section 6 below; provided further, however, that Executive's eligibility to participate in the Welfare Plans shall cease at such time as Executive is offered comparable coverage with a subsequent employer. If Executive is precluded from participating in any Welfare Plan by its terms or applicable law, the Company shall provide Executive with benefits that are reasonably equivalent in the aggregate to those which Executive would have received under such plan had he been eligible to participate therein. Anything to the contrary herein notwithstanding in Section 5.2 or this Section 5.3, the Company shall have no obligation to continue to maintain any Welfare Plan solely as a result of the provisions of this Agreement. (b) Notwithstanding anything to the contrary in this Agreement, notice by the Company to Executive that the Company wishes to terminate the Employment Period prior to or during any automatic renewal thereof pursuant to Section 3 hereof shall be deemed to be a termination by the Company without Cause pursuant to this Section 5.3. For the avoidance of doubt, any termination or expiration of the Employment Period other than pursuant to Section 5.1, 5.2, 5.5 or 5.8 hereof shall be deemed to be a termination pursuant to this Section 5.3. 5.4 Liquidated Damages. Executive acknowledges that the payment in full of all amounts and benefits due to him under Section 5.3 or Section 5.5 resulting from a termination of the Employment Period by the Company without Cause or by Executive for Good Reason (as defined below) are in lieu of any and all claims that Executive may have against the Company any of its Affiliates (other than benefits under the Company's employee benefit plans that by their terms survive termination of employment, benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and rights to indemnification under certain indemnification arrangements for officers of the Company), and represent liquidated damages (and not a penalty). The Company may request that Executive confirm such acknowledgment in writing prior to the receipt of such benefits. 5.5 Termination by Executive for Good Reason. (a) Executive may terminate his employment with the Company during the Employment Period (and the Employment Period will be terminated) for Good Reason. If Executive terminates his employment with the Company for Good Reason, Executive shall be entitled to the same salary and welfare benefit continuation, bonus, and the acceleration of vesting and continued exercisability of the Stock Options that he would have been entitled to receive under Section 5.3 if the Employment Period were terminated by the Company without Cause. (b) For purposes of this Agreement, the term "Good Reason" shall mean any of the following conditions or events which condition(s) or event(s) shall remain in effect 30 5 days after written notice is provided by Executive to the Company detailing such condition or event: 1. A material reduction in Executive's title or responsibilities with the Company, provided, however, that it is understood and agreed that if, after the Effective Time, as defined below, Executive is an Executive Vice President of the Surviving Corporation (as defined below) then, subject to the other terms hereof, including, without limitation, Section 1.2 hereof, there shall not be Good Reason solely because Executive is not the General Counsel of the Surviving Corporation; 2. If, for any reason, Executive is required to report to any person other than Martin J. Wygod; 3. any reduction in the Base Salary or material fringe benefits provided by the Company; 4. any material breach by the Company of this Agreement; 5. Executive is required to relocate his place of work to a location more than 25 miles from his current residence; or 6. the occurrence of a Change in Control (as defined below). Notwithstanding anything to the contrary herein, with respect to a Change in Control, Good Reason shall be deemed to occur immediately upon such Change in Control. 5.6 Change in Control. 6 (a) For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred if: 1. Any person, entity or group shall have acquired, in one or more transactions, the beneficial ownership of at least 50 percent of the voting power of the outstanding voting securities of the Company; or 2. The sale of all or substantially all of the assets of the Company to a person, entity or group in a transaction (except for a sale-leaseback transaction) where the Company or the holders of the common stock of the Company do not receive (i) voting securities representing a majority of the voting power entitled to vote on a regular basis for the board of directors of the acquiring entity or of an affiliate which controls the acquiring entity, or (ii) securities representing a majority of the equity interest in the acquiring entity or of an affiliate that controls the acquiring entity, if other than a corporation; or 3. A complete liquidation or dissolution of the Company shall have occurred. (b) The parties acknowledge and agree that the mergers with Medical Manager Corporation and CareInsite, Inc. did not constitute a "Change in Control." 5.7 Inconsistent Stock Option Plan and Stock Option Agreement Provisions. In the event that Executive's employment by the Company is terminated pursuant to Section 5.2, 5.3 or 5.5 hereof, notwithstanding anything to the contrary contained in any Stock Option Plan or Stock Option Agreement governing any Stock Option, all of such Stock Options shall be treated in the manner described in Section 5.3(a)(iv). 5.8. Termination by Executive Without Good Reason. Executive may resign from his employment with the Company at any time without Good Reason. Upon such a termination, the Company shall have no obligation other than (i) the payment of Executive's earned and unpaid Base Salary and accrued vacation time to the effective date of such termination and (ii) as provided in the Stock Option Agreements. 7 6. Covenants of Executive 6.1 Confidentiality. Executive understands and acknowledges that in the course of his employment, he will have access to and will learn information that is proprietary to, or confidential to the Company and its Affiliates that concerns the operation, methodology and plans of the Company and its Affiliates, including, without limitation, business strategy and plans, financial information, protocols, proposals, manuals, clinical procedures and guidelines, technical data, computer source codes, programs, software, know-how and specifications, copyrights, trade secrets, market information, Developments (as defined in Section 6.4 below), information regarding acquisition and other strategic partner candidates, and customer information (collectively, "Proprietary Information"). Executive agrees that, (i) at all times (including following termination of his employment with the Company) with respect to Proprietary Information, he will keep confidential and will not disclose directly or indirectly any such Proprietary Information to any third party, except as required to fulfill his duties hereunder, and will not misuse, misappropriate or exploit such Proprietary Information in any way. The restrictions contained herein shall not apply to any information which Executive can demonstrate (i) was already available to the public at the time of disclosure, or subsequently becomes available to the public, otherwise than by breach of this Agreement by Executive, provided, however, that Executive shall not disclose any Proprietary Information prior to the fifth anniversary of the Effective Time; or (ii) was the subject of a court order for Executive to disclose. Upon any termination of Executive's employment, Executive shall immediately return to the Company all copies of any Proprietary Information in his possession. 6.2. Restrictions on Solicitation. During the period (the "Restricted Period") beginning on the Effective Date and ending on the later of (x) the second anniversary of the date of cessation of the employment of Executive for any reason whatsoever and (y) the termination of the Applicable Period, Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or contact any customer, or any prospective customer (with whom Executive had material contact during his employment by the Company) of the Company or any of the Affiliates for any commercial pursuit which is in competition with the Company or any of the Affiliates or take away or interfere or attempt to interfere with any custom, trade, business or patronage of the Company or any of the Affiliates. During the Restricted Period, Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or induce, or attempt to induce, any employees, agents or consultants of or to the Company or any of the Affiliates to leave the employ of the Company or such Affiliate or do anything from which Executive is restricted by reason of this Agreement nor shall Executive, 8 directly or indirectly, offer or aid others to offer employment to or interfere or attempt to interfere with any employees, agents or consultants of the Company or any of the Affiliates. 6.3. Restrictions on Competitive Employment. (a) During the Restricted Period, Executive shall not, anywhere in the United States, directly or indirectly, without the prior written approval of the Company, own an interest in or, as principal, agent, employee, consultant or otherwise, engage in activities for or render services to, any firm or business (i) engaged in direct competition with the Company or any of its Affiliates, (ii) conducting a business of the type and character engaged in by the Company or any of its Affiliates at the time of termination, (iii) developing products or services competitive with those of the Company or any of its Affiliates or (iv) conducting any business in which the Company or any of its Affiliates is then engaged if Executive has engaged in activities for such business of the Company or such Affiliates or obtained Proprietary Information with respect thereto (all of the businesses in clauses (i), (ii), (iii) and (iv) collectively, "Competitive Business"). Notwithstanding the foregoing, (A) Executive may have an interest consisting of publicly traded securities constituting less than 5 percent of any class of publicly traded securities in any public company engaged in a Competitive Business so long as he is not employed by and does not consult with, or become a director of or otherwise engage in any activities for, such company and (B) in determining whether business is a Competitive Business, only the activities engaged in by the Company at the time of termination of Executive's employment shall be considered. (b) For purposes of the covenant not to compete set forth in paragraph (a) above, Executive acknowledges that the Company and its Affiliates presently conduct their businesses throughout the United States. Executive agrees that the Restricted Period and the geographical areas encompassed by such covenant are necessary and reasonable in order to protect the Company and its Affiliates in the conduct of their businesses. The parties intend that the foregoing covenant of Executive shall be construed as a series of separate covenants, one for each geographic area specified. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant set forth in paragraph (a) above. To the extent that the foregoing covenant or any provision of this Section 6.3 shall be deemed illegal or unenforceable by a court or other tribunal of competent jurisdiction with respect to (i) any geographic area, (ii) any part of the time period covered by such covenant, (iii) any activity or capacity covered by such covenant or (iv) any other term or provision of such covenant, such determination shall not affect such covenant with respect to any other geographic area, time period, activity or other term or provision covered by or included in such covenant. 6.4. Assignment of Developments. All Developments that are at any time made, conceived or suggested by Executive, whether acting alone or in conjunction with others, 9 arising out of or as a result of Executive's employment with the Company shall be the sole and absolute property of the Company and its Affiliates, free of any reserved or other rights of any kind on Executive's part. During Executive's employment and, if such Developments were made, conceived or suggested by Executive during or as a result of Executive's employment under this Agreement or any other employment with the Company or the Affiliates, thereafter, Executive shall promptly make full disclosure of any such Developments to the Company, and, at the Company's cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of assignment) deemed by the Company to be necessary or desirable at any time in order to effect the full assignment to the Company of Executive's right and title, if any, to such Developments. For purposes of this Agreement, the term "Developments" shall mean all data, discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the present or planned activities, or future activities, or the products and services of the Company or any of the Affiliates. 6.5. Remedies. Executive acknowledges and agrees that damages for a breach or threatened breach of any of the covenants set forth in this Section 6 will be difficult to determine and will not afford a full and adequate remedy, and therefore agrees that the Company, in addition to seeking actual damages in connection therewith and the termination of the Company's obligations in Sections 5.2, 5.3 or 5.5, may seek specific enforcement of any such covenant in any court of competent jurisdiction, including, without limitation, by the issuance of a temporary or permanent injunction. 7. Notices. Any notice or communication given by either party hereto to the other shall be in writing and personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the following addresses: (a) if to the Company: WebMD Corporation River Drive Center 2 669 River Drive Elmwood Park, New Jersey 07407-1361 Telecopier No.: (201) 703-3401 Attention: Chief Financial Officer (c) if to Executive at the address set forth on the signature page of this Agreement. Any notice shall be deemed given when actually delivered to such address, or three days after such notice has been mailed or sent by Federal Express, whichever comes earliest. Any person entitled to receive notice may designate in writing, by notice to the other, such other address to which notices to such person shall thereafter be sent. 10 8. Certain Additional Payments By The Company 8.1 Gross-Up Payment. Anything in this Agreement to the contrary or any termination of this Agreement notwithstanding, in the event it shall be determined that any payment or distribution or benefit received or to be received by Executive pursuant to the terms of this Agreement or any other payment or distribution or benefit made or provided by the Company or any of its Affiliates, to or for the benefit of Executive (whether pursuant to this Agreement or otherwise and determined without regard to whether any additional payments required under this Section 8) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the United States Internal Revenue Code (the "Code"), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income and employment taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions actually disallowed under Section 68 of the Code solely as a direct result of the inclusion of the Gross-Up Payment in the Executive's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 8.2 Gross-Up Payment Calculation. Subject to the provisions of Sections 8.1 and 8.3, all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company's certified public accounting firm (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from Executive or the Company that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8.3 and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. 11 8.3 Claim by the IRS. Executive shall notify the Company in writing of any claim by the U.S. Internal Revenue Service (the "IRS") that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; and (iii) cooperate with the Company in good faith in order effectively to contest such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income and employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8.3, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive shall agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income and employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or any other taxing authority. 12 8.4 Entitlement to Refund. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 8.3, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of Section 8.3) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 8.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 9. Miscellaneous. 9.1. Entire Agreement. This Agreement and the Stock Option Agreements contain the entire understanding of the parties in respect of their subject matter and supersede upon their effectiveness all other prior agreements and understandings between the parties with respect to such subject matter. 9.2 Amendment; Waiver. This Agreement may not be amended, supplemented, canceled or discharged, except by written instrument executed by the party against whom enforcement is sought. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof. No waiver of any breach of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision. 9.3. Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of any successor of the Company by reorganization, merger or consolidation, including, without limitation, the Surviving Corporation, or any assignee of all or substantially all of the Company's business and properties. At the Effective Time, each reference in this Agreement to the Company shall automatically be deemed to refer to the Surviving Corporation. The Company may assign its rights and obligations under this Agreement to any of its Affiliates without the consent of Executive so long as the Company remains responsible for the payment of the obligations hereunder; provided that after the Effective Time, the Surviving Corporation may not assign its obligations hereunder without the consent of Executive. Executive's rights or obligations under this Agreement may not be assigned by Executive, except that the rights specified in Section 5.2 shall pass upon Executive's death to Executive's executor or administrator. 9.4. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 9.5. Governing Law; Interpretation; Jurisdiction; Legal Fees. This Agreement shall be construed in accordance with and governed for all purposes by the laws and public policy (other than conflict of laws principles) of the State of New Jersey applicable to contracts executed and to be wholly performed within such State and the courts sitting in Bergen County, 13 New Jersey shall have exclusive jurisdiction of the Company and Executive for the purposes of adjudicating any disputes under this Agreement. Executive and the Company hereby consent to personal jurisdiction and venue in the courts of Bergen County, New Jersey and hereby waive any claim or defense that the party lacks minimum contacts with the forum, that the courts of the State of New Jersey lack personal jurisdiction of the parties, or that the courts of the State of New Jersey are an improper or inconvenient venue. The Company agrees that if an action is commenced by the Company or Executive hereunder and the Executive prevails or such action is settled by the parties, the Company shall reimburse Executive for his reasonable legal fees in connection with such action. 9.6. Further Assurances. Each of the parties agrees to execute, acknowledge, deliver and perform, and cause to be executed, acknowledged, delivered and performed, at any time and from time to time, as the case may be, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary to carry out the provisions or intent of this Agreement. 9.7. Severability. The parties have carefully reviewed the provisions of this Agreement and agree that they are fair and equitable. However, in light of the possibility of differing interpretations of law and changes in circumstances, the parties agree that if any one or more of the provisions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Agreement shall, to the extent permitted by law, remain in full force and effect and shall in no way be affected, impaired or invalidated. Moreover, if any of the provisions contained in this Agreement are determined by a court of competent jurisdiction to be excessively broad as to duration, activity, geographic application or subject, it shall be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law. 9.8. Withholding Taxes. All payments hereunder shall be subject to any and all applicable federal, state, local and foreign withholding taxes. 9.9. Term. Notwithstanding the term of the Employment Period as determined pursuant to Section 3 hereof, each obligation of the Company and the Executive, as the case may be, that arose during or as a result of the termination of the Employment Period, including, without limitation, pursuant to Sections 2, 5, 6 and 8 hereof, shall survive the termination of the Employment Period until such obligation is fulfilled in its entirety pursuant to the terms hereof. 14 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 29th day of April, 2002. WEBMD CORPORATION By: /s/ Lewis H. Leicher ----------------------------- Name: Lewis H. Leicher Title: Senior Vice President and Assistant General Counsel EXECUTIVE /s/ Charles A. Mele -------------------------------- Charles A. Mele 15 EX-10.52 8 g75760ex10-52.txt EMPLOYMENT AGREEMENT EXHIBIT 10.52 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (the "Agreement") dated as of July 1, 2000, by and between WEBMD CORPORATION, a Delaware corporation (the "Company"), and ANTHONY VUOLO ("Executive"). WHEREAS, Executive and the Company are party to an Employment Agreement dated as of July 1, 2000 (the "Original Employment Agreement"); and WHEREAS, the Company and Executive desire to amend and restate the Original Employment Agreement, primarily to extend the term of the Original Employment Agreement; NOW, THEREFORE, in consideration of the mutual covenants in this Agreement, the parties agree as follows: 1. Effectiveness of Agreement and employment of Executive. 1.1. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above (the "Effective Date"). 1.2 Employment by the Company. (a) The Company hereby employs Executive and Executive hereby accepts such employment by the Company. Executive shall report to Martin J. Wygod, either in his capacity as Chairman of the Board of the Company, Chief Executive Officer or as Co-Chief Executive Officer of the Company. Executive's title shall be Executive Vice President-- Chief Financial Officer. Executive shall perform such duties and services for the Company and its subsidiaries (such subsidiaries, collectively, "Affiliates"), which shall be commensurate with his position, as may be designated from time to time by Martin J. Wygod. (b) Executive shall perform his duties hereunder at the Company's headquarters at 669 River Drive, Elmwood Park, New Jersey. Executive shall use diligent efforts to promote the interests of the Company and the Affiliates, and shall devote substantially all of his business time and attention to his employment under this Agreement, provided, however, that Executive shall be permitted to manage his personal, financial and legal affairs that may from time to time require insubstantial portions of his working time, but would not singularly or in the aggregate interfere or be inconsistent with his duties and obligations under this Agreement. 2. Compensation and Benefits. 2.1. Salary. The Company shall pay Executive for services during the Employment Period (as defined in Section 3 below) a base salary at the annual rate of $450,000 (and as it may be increased pursuant to this Section 2.1, the "Base Salary"). Such Base Salary may be increased (but not decreased) from time to time in the sole discretion of the Company. Notwithstanding the foregoing, the Base Salary shall be increased on each anniversary of the Effective Date if and to the extent that the base salary of any other executive of the Company with a similar base salary is increased during the 12 month period prior to such anniversary, respectively, without an increase in the responsibilities of such other executive. The Base Salary shall be payable in equal installments, no less frequently than monthly, pursuant to the Company's customary payroll policies in force at the time of payment, less any required or authorized payroll deductions. 2.2. Benefits. During the Employment Period, Executive shall be entitled to participate, on the same basis and at the same level as other senior executive officers of the Company in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. 2.3. Expenses. Pursuant to the Company's customary policies in force at the time of payment, Executive shall be promptly reimbursed, against presentation of vouchers or receipts therefor, for all authorized expenses properly and reasonably incurred by him on behalf of the Company or its Affiliates in the performance of his duties hereunder. In furtherance of the foregoing, and not in limitation thereof, Executive shall be subject to the travel and entertainment policy applicable to senior executive officers of the Company. 2.5 Vacation. Executive shall be entitled to five weeks of paid vacation during each 12 month period of the Employment Period. Any unused portion of such vacation time shall be accrued and carry over to a subsequent 12 month period or periods at the discretion of Executive. 2.6 Car Allowance. During the Employment Period, the Company shall provide Executive with a car allowance in accordance with Company policy. 2.7 Bonus. Within 30 days from each anniversary of the Effective Date, Executive shall be entitled to receive a bonus payable with respect to the 12 month Period ending on such respective anniversary, which bonus shall be in the same form and amount, if any that is paid during such 12 month period to any other executive of the Company with similar compensation and responsibilities, provided, however that in determining whether Executive is entitled to a bonus payment or the amount thereof pursuant to this Section 2.7, no "signing bonus" or other one-time inducement offered to another employee of the Company to induce such employee to become employed by the Company shall be taken into account. In the event that Executive's employment is terminated prior to July 1, 2006, the amount of the bonus payable to Executive with respect to the year in which his employment is terminated shall be determined as though he continued to be employed by the Company until the next anniversary of the Effective Date following his termination. 3. Employment Period. Executive's employment under this Agreement shall commence as of the Effective Date, and shall terminate on July 1, 2006, unless terminated earlier pursuant to Section 5 or automatically renewed pursuant to the terms of the immediately following sentence (the "Employment Period"). Unless written notice of either party's desire to terminate the Employment Period has been given to the other party at least 30 days prior to the expiration of the Employment Period (or any one-month renewal thereof contemplated by this 2 sentence), the Employment Period shall be automatically be renewed for successive one-month periods. 4. Stock Options. Executive has been granted options (collectively referred to herein as the "Stock Options") to purchase shares of the Company's common stock pursuant to the respective stock option plans of the Company, including any such plans assumed by the Company (collectively referred to herein as the "Stock Option Plans") and the terms of the respective stock option agreement entered into between Executive and the Company, including any such agreements assumed by the Company (collectively referred to herein as the "Stock Option Agreements"). Subject to Executive's remaining in the employ of the Company (except as set forth in Sections 5.2, 5.3 and 5.5 below), the Stock Options shall, to the extent exercisable, remain exercisable in accordance to the terms of the applicable Stock Option Agreement or become exercisable in accordance with the terms of the Stock Option Agreement. Executive will be eligible to receive future grants of options to purchase shares of the Company's common stock at the discretion of the Company. Such options, if any, shall be deemed to be "Stock Options" (as defined below) pursuant to the terms hereof, any stock option plan and stock option agreement pursuant to which any such option is granted shall be deemed to be a Stock Option Plan and Stock Option Agreement, respectively. 5. Termination. 5.1 Termination by the Company for Cause. (a) The Employment Period may be terminated at any time by the Company for Cause (as defined below). Upon such a termination, the Company shall have no obligation to Executive other than (i) the payment of Executive's earned and unpaid Base Salary and accrued vacation time to the effective date of such termination and (ii) Executive shall not be entitled to any additional rights or vesting with respect to the Stock Options following the effective date of such termination. (b) For purposes of this Agreement, the term "Cause" shall mean any of the following: 1. Any material breach by Executive of this Agreement, which breach, if susceptible to cure, is not cured by Executive within 30 days following written notice from the Company detailing such breach; or 2. Executive's conviction of a felony. 5.2 Death and Disability. (a) The Employment Period may be deemed terminated by the Company upon the death of Executive or Executive becoming Disabled (as defined below), and Executive or Executive's estate shall be entitled to the same salary and welfare benefit continuation, bonus, and the acceleration of vesting and continued exercisability of the Stock Options that he would have been entitled to receive under Section 5.3 if the Employment Period were terminated by the 3 Company without Cause, provided, however, that the Company shall have no other obligation to Executive or Executive's estate pursuant to this Agreement in the event that the Employment Period is terminated by the Company pursuant to this Section 5.2. (b) For purposes of this Agreement, Executive shall be "Disabled" if (i) Executive becomes incapacitated by bodily injury or disease (including as a result of mental illness) so as to be unable to regularly perform the duties of his position for a period in excess of 180 days in any consecutive twelve-month period or (ii) a qualified independent physician mutually acceptable to the Company and Executive determines that Executive is mentally or physically disabled so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent duration. 5.3 Termination by the Company Without Cause. (a) The Employment Period may be terminated at any time by the Company without Cause. If the Company terminates the Employment Period without Cause, the Company shall have the following obligations to Executive (but excluding any other obligation to Executive pursuant to this Agreement): (i) a continuation of the Base Salary for a period (the "Applicable Period") commencing on the date of termination and ending on the later to occur of (x) July 1, 2006 and (y) 18 months from the date of termination, payable in accordance with the fourth sentence of Section 2.1, (ii) Executive shall be eligible to continue to participate for a period commencing on the date of termination and ending on the third anniversary of the date of termination (the "Extended Benefit Period"), on the same terms and conditions that would have applied had he remained in the employ of the Company during the Extended Benefit Period, in all health, medical, dental and other welfare plans provided to Executive pursuant to Section 2.2 at the time of such termination and which are provided by the Company to its employees following the date of termination ("Welfare Plans"), (iii) if such termination occurs prior to July 1, 2006, payment by the Company to Executive of any bonus that would have been payable to Executive pursuant to Section 2.7, payable at the time that such bonuses are required to be paid pursuant to Section 2.7, if Executive had continued his employment with the Company through July 1, 2006 (the amount of such bonuses in each such year shall be the amount of cash bonus payable to Executive in the year of termination) and (iv) (x) the Stock Options shall all become fully vested and exercisable as of the date of termination and shall each remain exercisable until such Stock Option would expire under the terms of the Stock Option Agreement pursuant to which such Stock Option was granted, and otherwise be treated for purposes of the terms and conditions thereof, as if Executive 4 was employed by the Company until the latest possible date upon which the Stock Option which is last to expire would expire pursuant to the terms of the Stock Option Agreement under which such last to expire Stock Option was granted; provided, however, that the continuation of such salary and welfare benefits and the exercisability of such options shall cease on the occurrence of any material breach of the covenants contained in Section 6 below; provided further, however, that Executive's eligibility to participate in the Welfare Plans shall cease at such time as Executive is offered comparable coverage with a subsequent employer. If Executive is precluded from participating in any Welfare Plan by its terms or applicable law, the Company shall provide Executive with benefits that are reasonably equivalent in the aggregate to those which Executive would have received under such plan had he been eligible to participate therein. Anything to the contrary herein notwithstanding in Section 5.2 or this Section 5.3, the Company shall have no obligation to continue to maintain any Welfare Plan solely as a result of the provisions of this Agreement. (b) Notwithstanding anything to the contrary in this Agreement, notice by the Company to Executive that the Company wishes to terminate the Employment Period prior to or during any automatic renewal thereof pursuant to Section 3 hereof shall be deemed to be a termination by the Company without Cause pursuant to this Section 5.3. For the avoidance of doubt, any termination or expiration of the Employment Period other than pursuant to Section 5.1, 5.2, 5.5 or 5.8 hereof shall be deemed to be a termination pursuant to this Section 5.3. 5.4 Liquidated Damages. Executive acknowledges that the payment in full of all amounts and benefits due to him under Section 5.3 or Section 5.5 resulting from a termination of the Employment Period by the Company without Cause or by Executive for Good Reason (as defined below) are in lieu of any and all claims that Executive may have against the Company any of its Affiliates (other than benefits under the Company's employee benefit plans that by their terms survive termination of employment, benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and rights to indemnification under certain indemnification arrangements for officers of the Company), and represent liquidated damages (and not a penalty). The Company may request that Executive confirm such acknowledgment in writing prior to the receipt of such benefits. 5.5 Termination by Executive for Good Reason. (a) Executive may terminate his employment with the Company during the Employment Period (and the Employment Period will be terminated) for Good Reason. If Executive terminates his employment with the Company for Good Reason, Executive shall be entitled to the same salary and welfare benefit continuation, bonus, and the acceleration of vesting and continued exercisability of the Stock Options that he would have been entitled to receive under Section 5.3 if the Employment Period were terminated by the Company without Cause. (b) For purposes of this Agreement, the term "Good Reason" shall mean any of the following conditions or events which condition(s) or event(s) shall remain in effect 30 5 days after written notice is provided by Executive to the Company detailing such condition or event: 1. a material reduction in Executive's title or responsibilities with the Company; 2. if, for any reason, Executive is required to report to any person other than Martin J. Wygod 3. any reduction in the Base Salary or material fringe benefits provided by the Company; 4. any material breach by the Company of this Agreement; 5. Executive is required to relocate his place of work to a location more than 25 miles from his current residence; or 6. the occurrence of a Change in Control (as defined below). Notwithstanding anything to the contrary herein, with respect to a Change in Control, Good Reason shall be deemed to occur immediately upon such Change in Control. 5.6 Change in Control. 6 (a) For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred if: 1. Any person, entity or group shall have acquired, in one or more transactions, the beneficial ownership of at least 50 percent of the voting power of the outstanding voting securities of the Company; or 2. The sale of all or substantially all of the assets of the Company to a person, entity or group in a transaction (except for a sale-leaseback transaction) where the Company or the holders of the common stock of the Company do not receive (i) voting securities representing a majority of the voting power entitled to vote on a regular basis for the board of directors of the acquiring entity or of an affiliate which controls the acquiring entity, or (ii) securities representing a majority of the equity interest in the acquiring entity or of an affiliate that controls the acquiring entity, if other than a corporation; or 3. A complete liquidation or dissolution of the Company shall have occurred. (b) The parties acknowledge and agree that the mergers with Medical Manager Corporation and CareInsite, Inc. did not constitute a "Change in Control." 5.7 Inconsistent Stock Option Plan and Stock Option Agreement Provisions. In the event that Executive's employment by the Company is terminated pursuant to Section 5.2, 5.3 or 5.5 hereof, notwithstanding anything to the contrary contained in any Stock Option Plan or Stock Option Agreement governing any Stock Option, all of such Stock Options shall be treated in the manner described in Section 5.3(a)(iv). 5.8. Termination by Executive Without Good Reason. Executive may resign from his employment with the Company at any time without Good Reason. Upon such a termination, the Company shall have no obligation other than (i) the payment of Executive's earned and unpaid Base Salary and accrued vacation time to the effective date of such termination and (ii) as provided in the Stock Option Agreements. 7 6. Covenants of Executive 6.1 Confidentiality. Executive understands and acknowledges that in the course of his employment, he will have access to and will learn information that is proprietary to, or confidential to the Company and its Affiliates that concerns the operation, methodology and plans of the Company and its Affiliates, including, without limitation, business strategy and plans, financial information, protocols, proposals, manuals, clinical procedures and guidelines, technical data, computer source codes, programs, software, know-how and specifications, copyrights, trade secrets, market information, Developments (as defined in Section 6.4 below), information regarding acquisition and other strategic partner candidates, and customer information (collectively, "Proprietary Information"). Executive agrees that, (i) at all times (including following termination of his employment with the Company) with respect to Proprietary Information, he will keep confidential and will not disclose directly or indirectly any such Proprietary Information to any third party, except as required to fulfill his duties hereunder, and will not misuse, misappropriate or exploit such Proprietary Information in any way. The restrictions contained herein shall not apply to any information which Executive can demonstrate (i) was already available to the public at the time of disclosure, or subsequently becomes available to the public, otherwise than by breach of this Agreement by Executive or (ii) was the subject of a court order for Executive to disclose. Upon any termination of Executive's employment, Executive shall immediately return to the Company all copies of any Proprietary Information in his possession. 6.2. Restrictions on Solicitation. During the period (the "Restricted Period") beginning on the Effective Date and ending on the later of (x) the second anniversary of the date of cessation of the employment of Executive for any reason whatsoever and (y) the termination of the Applicable Period, Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or contact any customer, or any prospective customer (with whom Executive had material contact during his employment by the Company) of the Company or any of the Affiliates for any commercial pursuit which is in competition with the Company or any of the Affiliates or take away or interfere or attempt to interfere with any custom, trade, business or patronage of the Company or any of the Affiliates. During the Restricted Period, Executive shall not, directly or indirectly, without the prior written approval of the Company, solicit or induce, or attempt to induce, any employees, agents or consultants of or to the Company or any of the Affiliates to leave the employ of the Company or such Affiliate or do anything from which Executive is restricted by reason of this Agreement nor shall Executive, directly or indirectly, offer or aid others to offer employment to or interfere or attempt to interfere with any employees, agents or consultants of the Company or any of the Affiliates. 8 6.3. Restrictions on Competitive Employment. (a) During the Restricted Period, Executive shall not, anywhere in the United States, directly or indirectly, without the prior written approval of the Company, own an interest in or, as principal, agent, employee, consultant or otherwise, engage in activities for or render services to, any firm or business (i) engaged in direct competition with the Company or any of its Affiliates, (ii) conducting a business of the type and character engaged in by the Company or any of its Affiliates at the time of termination, (iii) developing products or services competitive with those of the Company or any of its Affiliates or (iv) conducting any business in which the Company or any of its Affiliates is then engaged if Executive has engaged in activities for such business of the Company or such Affiliates or obtained Proprietary Information with respect thereto (all of the businesses in clauses (i), (ii), (iii) and (iv) collectively, "Competitive Business"). Notwithstanding the foregoing, (A) Executive may have an interest consisting of publicly traded securities constituting less than 5 percent of any class of publicly traded securities in any public company engaged in a Competitive Business so long as he is not employed by and does not consult with, or become a director of or otherwise engage in any activities for, such company and (B) in determining whether business is a Competitive Business, only the activities engaged in by the Company at the time of termination of Executive's employment shall be considered. (b) For purposes of the covenant not to compete set forth in paragraph (a) above, Executive acknowledges that the Company and its Affiliates presently conduct their businesses throughout the United States. Executive agrees that the Restricted Period and the geographical areas encompassed by such covenant are necessary and reasonable in order to protect the Company and its Affiliates in the conduct of their businesses. The parties intend that the foregoing covenant of Executive shall be construed as a series of separate covenants, one for each geographic area specified. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant set forth in paragraph (a) above. To the extent that the foregoing covenant or any provision of this Section 6.3 shall be deemed illegal or unenforceable by a court or other tribunal of competent jurisdiction with respect to (i) any geographic area, (ii) any part of the time period covered by such covenant, (iii) any activity or capacity covered by such covenant or (iv) any other term or provision of such covenant, such determination shall not affect such covenant with respect to any other geographic area, time period, activity or other term or provision covered by or included in such covenant. 6.4. Assignment of Developments. All Developments that are at any time made, conceived or suggested by Executive, whether acting alone or in conjunction with others, arising out of or as a result of Executive's employment with the Company shall be the sole and absolute property of the Company and its Affiliates, free of any reserved or other rights of any kind on Executive's part. During Executive's employment and, if such Developments were made, conceived or suggested by Executive during or as a result of Executive's employment under this Agreement or any other employment with the Company or the Affiliates, thereafter, Executive shall promptly make full disclosure of any such Developments to the Company, and, at the Company's cost and expense, do all acts and things (including, among others, the execution and delivery under oath of patent and copyright applications and instruments of 9 assignment) deemed by the Company to be necessary or desirable at any time in order to effect the full assignment to the Company of Executive's right and title, if any, to such Developments. For purposes of this Agreement, the term "Developments" shall mean all data, discoveries, findings, reports, designs, inventions, improvements, methods, practices, techniques, developments, programs, concepts, and ideas, whether or not patentable, relating to the present or planned activities, or future activities, or the products and services of the Company or any of the Affiliates. 6.5. Remedies. Executive acknowledges and agrees that damages for a breach or threatened breach of any of the covenants set forth in this Section 6 will be difficult to determine and will not afford a full and adequate remedy, and therefore agrees that the Company, in addition to seeking actual damages in connection therewith and the termination of the Company's obligations in Sections 5.2, 5.3 or 5.5, may seek specific enforcement of any such covenant in any court of competent jurisdiction, including, without limitation, by the issuance of a temporary or permanent injunction. 7. Notices. Any notice or communication given by either party hereto to the other shall be in writing and personally delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the following addresses: (a) if to the Company: WebMD Corporation River Drive Center 2 669 River Drive Elmwood Park, New Jersey 07407-1361 Telecopier No.: (201) 703-3401 Attention: General Counsel (c) if to Executive at the address set forth on the signature page of this Agreement. Any notice shall be deemed given when actually delivered to such address, or three days after such notice has been mailed or sent by Federal Express, whichever comes earliest. Any person entitled to receive notice may designate in writing, by notice to the other, such other address to which notices to such person shall thereafter be sent. 8. Certain Additional Payments By The Company 8.1 Gross-Up Payment. Anything in this Agreement to the contrary or any termination of this Agreement notwithstanding, in the event it shall be determined that any payment or distribution or benefit received or to be received by Executive pursuant to the terms of this Agreement or any other payment or distribution or benefit made or provided by the Company or any of its Affiliates, to or for the benefit of Executive (whether pursuant to this Agreement or otherwise and determined without regard to whether any additional payments 10 required under this Section 8) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the United States Internal Revenue Code (the "Code"), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income and employment taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions actually disallowed under Section 68 of the Code solely as a direct result of the inclusion of the Gross-Up Payment in the Executive's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 8.2 Gross-Up Payment Calculation. Subject to the provisions of Sections 8.1 and 8.3, all determinations required to be made under this Section 8, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company's certified public accounting firm (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from Executive or the Company that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 8, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 8.3 and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. 8.3 Claim by the IRS. Executive shall notify the Company in writing of any claim by the U.S. Internal Revenue Service (the "IRS") that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such 11 shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; and (iii) cooperate with the Company in good faith in order effectively to contest such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income and employment tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 8.3, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive shall agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income and employment tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or any other taxing authority. 8.4 Entitlement to Refund. If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 8.3, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of Section 8.3) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 8.3, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior 12 to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 9. Miscellaneous. 9.1. Entire Agreement. This Agreement and the Stock Option Agreements contain the entire understanding of the parties in respect of their subject matter and supersede upon their effectiveness all other prior agreements and understandings between the parties with respect to such subject matter. 9.2 Amendment; Waiver. This Agreement may not be amended, supplemented, canceled or discharged, except by written instrument executed by the party against whom enforcement is sought. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof. No waiver of any breach of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision. 9.3. Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of any successor of the Company by reorganization, merger or consolidation, including, without limitation, the Surviving Corporation, or any assignee of all or substantially all of the Company's business and properties. At the Effective Time, each reference in this Agreement to the Company shall automatically be deemed to refer to the Surviving Corporation. The Company may assign its rights and obligations under this Agreement to any of its Affiliates without the consent of Executive so long as the Company remains responsible for the payment of the obligations hereunder; provided that after the Effective Time, the Surviving Corporation may not assign its obligations hereunder without the consent of Executive. Executive's rights or obligations under this Agreement may not be assigned by Executive, except that the rights specified in Section 5.2 shall pass upon Executive's death to Executive's executor or administrator. 9.4. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 9.5. Governing Law; Interpretation; Jurisdiction; Legal Fees. This Agreement shall be construed in accordance with and governed for all purposes by the laws and public policy (other than conflict of laws principles) of the State of New Jersey applicable to contracts executed and to be wholly performed within such State and the courts sitting in Bergen County, New Jersey shall have exclusive jurisdiction of the Company and Executive for the purposes of adjudicating any disputes under this Agreement. Executive and the Company hereby consent to personal jurisdiction and venue in the courts of Bergen County, New Jersey and hereby waive any claim or defense that the party lacks minimum contacts with the forum, that the courts of the State of New Jersey lack personal jurisdiction of the parties, or that the courts of the State of New Jersey are an improper or inconvenient venue. The Company agrees that if an action is commenced by the Company or Executive hereunder and the Executive prevails or such action is 13 settled by the parties, the Company shall reimburse Executive for his reasonable legal fees in connection with such action. 9.6. Further Assurances. Each of the parties agrees to execute, acknowledge, deliver and perform, and cause to be executed, acknowledged, delivered and performed, at any time and from time to time, as the case may be, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary to carry out the provisions or intent of this Agreement. 9.7. Severability. The parties have carefully reviewed the provisions of this Agreement and agree that they are fair and equitable. However, in light of the possibility of differing interpretations of law and changes in circumstances, the parties agree that if any one or more of the provisions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Agreement shall, to the extent permitted by law, remain in full force and effect and shall in no way be affected, impaired or invalidated. Moreover, if any of the provisions contained in this Agreement are determined by a court of competent jurisdiction to be excessively broad as to duration, activity, geographic application or subject, it shall be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law. 9.8. Withholding Taxes. All payments hereunder shall be subject to any and all applicable federal, state, local and foreign withholding taxes. 9.9. Term. Notwithstanding the term of the Employment Period as determined pursuant to Section 3 hereof, each obligation of the Company and the Executive, as the case may be, that arose during or as a result of the termination of the Employment Period, including, without limitation, pursuant to Sections 2, 5, 6 and 8 hereof, shall survive the termination of the Employment Period until such obligation is fulfilled in its entirety pursuant to the terms hereof. 14 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 29th day of April, 2002. WebMD CORPORATION By: /s/ Lewis H. Leicher ------------------------- Name: Lewis H. Leicher Title: Senior Vice President and Assistant General Counsel EXECUTIVE /s/ Anthony Vuolo ---------------------------- Anthony Vuolo 15 EX-10.53 9 g75760ex10-53.txt AGREEMENT EXHIBIT 10.53 July 2, 2001 Ms. Patricia Fili-Krushel Dear Pat: This letter agreement confirms our mutual understanding with respect to your resignation from the employ of WebMD Corporation (the "Company") and its subsidiaries. 1. Resignation. The effective date of your resignation from the employ of the Company, and from all directorships or other positions that you hold with the Company, will occur on July 13, 2001 (the "Resignation Date"), after which date you shall have no obligation to render services to Company (other than as set forth in Section 10). You will receive your current base salary through and including the Resignation Date and you will be paid for any accrued, but not taken, vacation days in accordance with the Company's prevailing practices. Information regarding your ability to continue your health insurance coverage under the Company's group health plan pursuant to the federal "COBRA" law will be sent to you separately by the applicable plan administrators. You shall also receive any and all vested benefits under the Company's 401(k) retirement plan and the Employee Stock Purchase Plan and reimbursement for business expenses incurred prior to the Resignation Date in accordance with the Company's policy. 2. Severance Benefits (a) In full satisfaction of any and all obligations which you might otherwise be entitled under any Company policy, plan or procedure or pursuant to any prior agreement or contract with the Company and in return for your execution and delivery of this Agreement, and effective upon expiration of the Revocation Period (as defined in Section 11), and subject to Section 2(b), the Company will provide the following benefits: (i) The Company will pay to you an amount equal to (A) 50% of your current base salary as if you remained in the employ of the Company through May 13, 2004 and (B) $750,000 (representing 50% of your minimum bonus as if you remained in the employ of the Company through May 13, 2004). Such payment will be made in equal installments from the Resignation Date through the third anniversary thereof in accordance with the Company's prevailing payroll; and (ii) The option (the "Option") to purchase 550,000 shares of common stock of the Company granted to you in connection with your acceptance of employment with the Company shall be immediately vested on the Resignation Date, but shall become exercisable in accordance with its original terms (e.g., as of the Resignation Date, 160,416 shares are exercisable and the remaining will continue to become exercisable on a monthly basis) and remain exercisable through the June 15, 2004. (b) Any obligations or commitments of the Company pursuant to this Agreement (including, without limitation, the continued exercisability of the Option) shall immediately cease in 15 the event that you breach this Agreement, which breach remains uncured (if susceptible to cure) after ten (10) business days following written notice from the Company. In the event of such a breach following payment of its obligations hereunder, the Company may (in addition to any remedy otherwise available to it) seek to recover the amounts paid under this Agreement, and any attorneys' fees and costs incurred in such action, to the extent permitted by law. 3. Release. (a) You, for yourself, your successors, assigns, attorneys, and all those entitled to assert your rights, now and forever hereby release and discharge the Company and its respective officers, directors, stockholders, trustees, employees, agents, parent corporations, subsidiaries, affiliates, estates, successors, assigns and attorneys (the "Released Parties"), from any and all claims, actions, causes of action, sums of money due, suits, debts, liens, covenants, contracts, obligations, costs, expenses, damages, judgments, agreements, promises, demands, claims for attorney's fees and costs, or liabilities whatsoever, in law or in equity, which you ever had or now have against the Released Parties, including any claims arising by reason of or in any way connected with any employment relationship which existed between the Company or any of its parents, subsidiaries, affiliates, or predecessors, and you. It is understood and agreed that this Agreement is intended to cover all actions, causes of action, claims or demands for any damage, loss or injury, which may be traced either directly or indirectly to the aforesaid employment relationship, or the termination of that relationship, that you have, had or purport to have, from the beginning of time to the date of this Agreement, whether known or unknown, that now exists, no matter how remotely they may be related to the aforesaid employment relationship including but not limited to claims for employment discrimination under federal or state law, except as provided in Section 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C. ss. 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C. ss. 12101 et seq.; claims for statutory or common law wrongful discharge, including any claims arising under the Fair Labor Standards Act, 29 U.S.C. ss. 201 et seq.; claims for attorney's fees, expenses and costs; claims for defamation; claims for wages or vacation pay; claims for benefits, including any claims arising under the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001, et seq. (except for vested ERISA benefits which are not affected by this Agreement); and provided, however, that nothing herein shall release the Company of its obligations to you under this Agreement (including the option agreement and plan relating to the Option) or any indemnification obligations to you under the Company's bylaws, certificate of incorporation, Delaware law or otherwise. (b) Release of Claims Under Age Discrimination in Employment Act. Without limiting the generality of the foregoing, you agree that by executing this Agreement, you have released and waived any and all claims you have or may have as of the date of this Agreement for age discrimination under the Age Discrimination in Employment Act, 29 U.S.C. ss. 621, et seq. It is understood that you were advised to consult with an attorney prior to executing this Agreement; that you in fact have consulted a knowledgeable, competent attorney regarding this Agreement; that you may, before executing this Agreement, consider this Agreement for a period of up to twenty-one (21) calendar days; and that the consideration you receive for this Agreement is in addition to amounts to which you were already entitled. It is further understood that this Agreement is not effective until seven (7) calendar days after the execution of this Agreement and that you may revoke this Agreement within seven (7) calendar days from the date of execution hereof. -2- 4. Return of Company Property. You agree to return all Company property and equipment in your possession or control, including, but not limited to, the Company's computer, files and documents. You also agree to leave intact all electronic Company documents existing as of the Resignation Date, including those that you developed or helped develop. 5. Waiver of Rights. No delay or omission by either of the parties in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by either of the parties to this Agreement on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. 6. Proprietary Information Obligations. You acknowledge and agree that you are obligated to keep in the strictest of confidence, and not to use or to disclose to any person, firm or corporation any trade secrets, confidential knowledge, data or other proprietary information of the Company. By way of illustration only, this shall include confidential information which has not been made public by means other than your breach of this Agreement relating to products, processes, know-how, designs, formulas, source or object codes, patents, algorithms, methods, samples, developmental or experimental work, improvements, discoveries, plans for research and new products, plans for marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers, and information regarding the skills, knowledge, background, performance, salary, compensation or benefits of any Company employee, customer, client or vendor. You further acknowledge that the Company received confidential or proprietary information from third parties subject to a duty on the Company to maintain the confidentiality of such information and/or to use the information only for certain limited purposes. You agree to keep in the strictest of confidence, and not to use or to disclose to any person, firm or corporation any trade secrets, confidential knowledge, data or other proprietary information of such third parties, which has not been made public by means other than your breach of this Agreement. Nothing in this Section does, is intended to nor should be construed to narrow any obligations imposed on you by any other provision herein any law, statute or regulation. 7. Confidentiality. The provisions of this Agreement shall be held in strictest confidence by you and shall not be publicized or disclosed by you in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement in confidence to your immediate family; (b) may disclose this Agreement in confidence to your respective attorneys, accountants, auditors, tax preparers, and financial advisors; (c) you may disclose Sections 1, 6, 7, 8 and 10 to a prospective employer; and (d) you may disclose this Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. 8. Additional Covenants. (a) As a reasonable measure to protect the Company from the harm of such disclosure and use of its confidential information and trade secrets against it, you acknowledge that information which has not been made public by means other than your breach of this Agreement regarding employees of the Company is confidential information, including without limitation, the names of the Company employees; information regarding the skills and knowledge of employees of the Company; information regarding any past, present, or intended compensation, benefits, policies and incentives for employees of the Company; and information regarding the management and reporting structure of the Company. You acknowledge your obligation not to, individually or with others, directly or indirectly (including without limitation, individually or through any business, venture, proprietorship, partnership, or corporation, through any agents, contractors, recruiters, by -3- their successors, by their employees, or by their assigns) hire, solicit or induce any employee of the Company to leave the Company during the two year period following the Resignation Date. You further acknowledge and agree that during the one year period following the Resignation Date you will not, either directly or indirectly, solicit or attempt to solicit any customer, client, supplier, investor, vendor, consultant or independent contractor of the Company to terminate, reduce or negatively alter his, her or its relationship with the Company. During such one year period following the Resignation Date, you acknowledge that you will not (as principal, agent, employee, consultant or otherwise), anywhere in the United States, provide any services which pertain to the delivery of information and communication related products or services relating to the healthcare industry which products or services are competitive with the products and services provided by the Company or its subsidiaries ("Competitive Services"). The Company acknowledges and agrees to your employment with AOL Time Warner, Inc. ("AOL"); provided, however, that you do not perform Competitive Services for AOL, including, without limitation, AOL's healthcare portal, and you are otherwise in compliance with this Agreement. You further acknowledge that any hiring by AOL during the two year period following the Resignation Date of any officer of the Company, or any other person (other than secretarial personnel) who, directly or indirectly, reported to you while you were employed by the Company or who had significant responsibility for the operations of the Company's consumer business, will be deemed to violate the provisions of this Agreement. Nothing in this Section should be construed to narrow your obligations imposed by any other provision herein or any law, statute or regulation. (b) Enforcement of Restrictive Covenants. (i) Rights and Remedies Upon Breach. In the event you materially breach any of the provisions of Sections 6, 7, 8 or 9 of this Agreement, the Company shall have the right and remedy to seek to enjoin, preliminarily and permanently, you from violating such provisions and to have those agreements specifically enforced by any court of competent jurisdiction, it being agreed that any breach of those provisions could cause irreparable injury to the Company and that money damages might not provide an adequate remedy to the Company. Such right and remedy shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. (c) Severability of Covenants. You acknowledge and agree that the provisions of Sections 6, 7, 8 or 9 of this Agreement are reasonable and valid in time and scope and in all other respects. The covenants set forth in this Agreement shall be considered and construed as separate and independent covenants. Should any part or provision of any covenant be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement unless it shall result in a failure of consideration for the promise sought to be enforced. If any portion of the foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, the territory, the definition of activities or the definition of information covered is considered to be invalid or unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the intent of the Company and you in agreeing to the provisions of this Agreement will not be impaired and the provision in question shall be enforceable to the fullest extent of the applicable laws. 9. Non-Disparagement. You understand and agree that as a condition for payment to you of the consideration herein described, you shall not make any false, disparaging or derogatory statements in public or private regarding the Company or any of its directors, officers, employees, -4- agents or representatives or the Company's business affairs and financial condition unless compelled to do so by lawful process, but you shall provide the Company with prompt notice so that it may take such action as it deems necessary to avoid such statement. 10. Cooperation. You will (i) cooperate in all reasonable respects (after taking into account any employment obligations you may have) with the Company and its affiliates and their respective directors, officers, attorneys and experts in connection with the conduct of any action, proceeding, investigation or litigation involving the Company or any of its affiliates, including any such action, proceeding, investigation or litigation in which you are called to testify and (ii) promptly respond to all reasonable requests by the Company and its affiliates relating to information concerning the Company which may be in your possession. The Company will, as a condition to your obligations under this Section 10, reimburse you for any reasonable out of pocket expenses incurred as a result of such cooperation, provided that such expenses have been approved in writing in advance by an executive officer of the Company. 11. Applicable Law. This Agreement shall be interpreted and construed by the laws of the State of Delaware, without regard to conflict of laws provisions. You hereby irrevocably submit to and acknowledge and recognize the jurisdiction of the courts of the State of Delaware, or, if appropriate, a federal court within Delaware (which courts, together with all applicable appellate courts, for purposes of this agreement, are the only courts of competent jurisdiction), over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof. 12. Entire Agreement/Severability. You understand and agree that this Agreement and the plan and stock option agreement pursuant to which the Option was issued contain and constitute all understandings and agreements between the parties hereto and cancel any and all other oral and written negotiations, agreements, commitments, and writings between the parties. The parties agree that the Agreement may not be modified, altered or changed except by a written agreement signed by the parties, hereto. If any provision of the Agreement is held by a Court to be invalid, the remaining provisions will remain in full force and effect, unless the finding of invalidity results in a failure of consideration for the promise sought to be enforced. 13. Acceptance. You shall have twenty-one (21) days from the date set forth above to consider the terms of this Agreement. In order to receive the benefits and payments provided for by Section 2 of this Agreement, you must execute this Agreement and return it to the Company addressed to Bonnie Klugman, Esq., at 669 River Drive, Elmwood Park, New Jersey 07407 so that it is received any time on or before the expiration of the 21-day period. After executing the Agreement, you shall have seven (7) days (the "Revocation Period") to revoke it by indicating your desire to do so in writing addressed to and received by Bonnie Klugman, Esq., at 669 River Drive, Elmwood Park, New Jersey 07407 no later than the seventh (7th) day following the date you executed the Agreement. In the event you do not accept this Agreement, or in the event you revoke this Agreement during the Revocation Period, the obligations of the Company to make the payments and provide the benefits set forth in Section 2 shall automatically be deemed null and void. No payments or benefits will be paid or provided under Section 2 of this Agreement until expiration of the Revocation Period. 14. Voluntary Assent. You affirm that you have read this Agreement, and understand all of its terms, including the full and final release of claims set forth in Section 3. You further acknowledge that you have knowingly and voluntarily entered into this Agreement; that you have -5- not relied upon any representation or statement, written or oral, not set forth in this Agreement; that the consideration received for executing this Agreement is greater than that to which you may otherwise be entitled; and that this document gives you the opportunity and encourages you to have this Agreement reviewed by your attorney and/or tax advisor. 15. Counterparts. The Agreement may be executed in two (2) signature counterparts, each of which shall constitute an original, but all of which taken together shall constitute but one and the same instrument. 16. Taxes. All payments hereunder shall be subject to all applicable federal, state and local tax withholding obligations. 17. This Agreement shall be binding upon, and shall inure to the benefit of, any successor to the Company. WebMD Corporation /s/ Bonne R. Klugman ------------------------- Name: Bonnie R. Klugman AGREED TO: Dated: September 21, 2001 /s/ Patricia Fili-Krushel ------------------------- Patricia Fili-Krushel -6- EX-10.54 10 g75760ex10-54.txt FORM OF AMENDED AND RESTATED STOCK OPTION AGREE. EXHIBIT 10.54 [FORM OF STOCK OPTION AGREEMENT] STOCK OPTION AGREEMENT dated as of August 21, 2000 (the "Agreement") between Medical Manager Corporation, a Delaware corporation (the "Company"), and _________________ (the "Participant"). WHEREAS, in light of the extraordinary services that will be required of the Participant in integrating the businesses of the companies following the merger of the Company and CareInsite, Inc., a Delaware corporation, with Healtheon/WebMD Corporation, a Delaware corporation ("Healtheon"), the Company has granted to the Participant nonqualified stock options to purchase _____ shares of common stock, $.01 par value, of the Company (the "Common Shares") upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto agree as follows: 1. Confirmation of Grant of Options; Effectiveness. Pursuant to a determination by the Stock Option Committee (the "Committee") of the Board of Directors of the Company (the "Board"), the Company hereby confirms that the Participant has been granted, effective as of the date hereof (the "Date of Grant"), and subject to the terms and conditions of this Agreement, the number of nonqualified stock options (the "Options") specified at the foot of the signature page hereof. Each such Option shall entitle the Participant to purchase, upon payment of the option price specified at the foot of the signature page hereof (the "Option Price"), one Common Share. The Options shall be exercisable as hereinafter provided. 2. Certain Restrictions. None of the Options may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of, except by will or the laws of descent and distribution; provided, however, that the Committee shall permit the transfer of an Option to the Participant's family members, to one or more trusts established in whole or in part for the benefit of one or more of such family members or to any other entity that is owned by such family members. During the Participant's lifetime, an Option shall be exercisable only by the Participant or by the Participant's guardian, legal representative or permitted transferee. Each transferee of an Option by will or the laws of descent and distribution or other permitted transferee shall, as a condition to the transfer thereof, execute an agreement pursuant to which it shall become a party to this Agreement. Any attempt to sell, transfer, assign, pledge or otherwise encumber or dispose of any Option contrary to the provisions of this Agreement, and any levy, attachment or similar process upon any Option shall be null and void and without effect. 3. Terms and Conditions of Options. The Options evidenced hereby are subject to the following terms and conditions: (a) Vesting. Subject to Section 3(b), the Options shall vest and become exercisable ("Vested Options") as follows: 2.0833% of the Options shall vest and become exercisable on the first day of each month following the Date of Grant, commencing September 1, 2000, with 100% of the Options being vested and exercisable on August 1, 2004. (b) Option Period. (i) The Options shall not be exercisable following the tenth anniversary of the Date of Grant, and shall be subject to earlier termination as provided in Section 3(b)(iii). (ii) In the event that the Participant's employment with the Company and its subsidiaries is terminated (A) as a result of the Participant's death or the Participant becoming Disabled (as defined below), (B) by the Company without Cause (as defined below) or (C) by the Participant for Good Reason (as defined below), the Options shall be fully vested and exercisable as of the date on which such employment terminates. (iii) In the event that the Participant's employment with the Company and its subsidiaries is terminated by the Company for Cause or by the Participant without Good Reason, any Options which have not become Vested Options as of the date of termination shall terminate and be cancelled without any consideration being paid therefor. (iv) In the event that the Participant's employment with the Company and its subsidiaries terminates for any reason, the Participant (or the Participant's estate) shall be entitled to exercise any Options which have become Vested Options as of the date of termination until the tenth anniversary of the Date of Grant. (c) Certain Definitions. (i) For purposes of this Agreement, "Cause" has the meaning set forth in an employment agreement between the Participant and the Company (or a subsidiary of the Company), or if there is no such employment agreement that defines "Cause", means a final, non-appealable court adjudication in a civil or criminal proceeding that the Participant has during his employment committed a fraud or felony directed against the Company relating to or adversely affecting his employment. (ii) For purposes of this Agreement, the Participant shall be "Disabled" if the Participant becomes incapacitated by bodily injury or disease (including as a result of mental illness) so as to be unable to regularly perform the duties of his position for a period in excess of 180 days in any consecutive twelve-month period. (iii) For purposes of this Agreement, "Good Reason" has the meaning set forth in an employment agreement between the Participant and the Company (or a subsidiary of the Company), or if there is no such employment agreement that defines "Good Reason", means any of the following conditions or events: 1. a reduction in the Participant's title or responsibilities with the Company or the Surviving Corporation (as defined in the Agreement and Plan of Merger dated February 13, 2000 between Healtheon and the Company, as amended by Amendment No. 1 thereto dated as of June 18, 2000), or if he is required to report to any person other than Martin J. Wygod or any person designated by Martin J. Wygod; 2. any reduction in any compensation or fringe benefits provided by the Company; 2 3. any breach by the Company of this Agreement or any other material agreement between the Company and the Participant; 4. the failure of the Surviving Corporation to assume the obligations of the Company hereunder and agree to be bound by the terms hereof; or 5. a change in the location from which the Participant performs his services for the Company or the Surviving Corporation to a location more than 25 miles from his current residence. (d) Notice of Exercise. Subject to Sections 3(e) and 5(a) hereof, the Participant may exercise any or all of the Vested Options by giving written notice to the Chief Financial Officer of the Company at its principal business office. The date of exercise of a Vested Option shall be the later of (i) the date on which the Chief Financial Officer of the Company receives such written notice or (ii) the date on which the conditions provided in Sections 3(e) and 5(a) hereof are satisfied. (e) Payment. Prior to the issuance of a certificate pursuant to Section 3(h) hereof evidencing Common Shares, the Participant shall have paid to the Company the Option Price of all Common Shares purchased pursuant to exercise of such Options, in cash or by certified or official bank check, and all applicable tax withholding obligations as provided in Section 5(a) of this Agreement. The Option Price may also be payable by a customary "cashless" exercise procedure through a broker or in such other form as the Committee may approve. (f) Shareholder Rights. The Participant shall have no rights as a shareholder with respect to any Common Shares issuable upon the exercise of an Option until a certificate or certificates evidencing such shares shall have been issued to the Participant, and, except as provided in Section 6, no adjustment shall be made for dividends or distributions or other rights in respect of any share for which the record date is prior to the date upon which the Participant shall become the holder of record thereof. (g) Compliance with Securities Laws. The Company shall, on or prior to the date on which an Option becomes exercisable, use its best efforts to (A) file a registration statement with the Securities and Exchange Commission on Form S-8 with respect to the Common Shares subject to such Option and cause such registration statement to be declared effective and remain effective for so long as any Option remains outstanding and (B) qualify such Common Shares under applicable state "blue sky" laws (or determine that an exemption under such blue sky laws is available) and cause such Common Shares to remain so qualified (or exempt) for so long as any Option remains outstanding. (h) Issuance of Certificate. As soon as practicable following the exercise of any Options, a certificate evidencing the number of Common Shares issued in connection with such exercise shall be issued in the name of the Participant. 4. Representations and Warranties. The Company and the Participant represent that this Agreement has been duly executed and delivered by such party and constitutes 3 a legal, valid and binding agreement of such party, enforceable against such party in accordance with its terms, except as limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally and by general principles of equity. 5. Miscellaneous. (a) Tax Withholding. The Company and its subsidiaries shall have the right to require the Participant to remit to the Company, prior to the delivery of any certificates evidencing Common Shares pursuant to the exercise of an Option, any amount sufficient to satisfy any minimum federal, state or local tax withholding requirements. Prior to the Company's determination of such withholding liability, the Participant shall have the right to make an irrevocable election to satisfy, in whole or in part, such obligation to remit taxes by directing the Company to withhold Common Shares that would otherwise be received by the Participant. (b) No Restriction on Right of Company to Effect Corporate Changes. Subject to Section 6, this Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital structure or business of the Company, or any merger or consolidation of the Company, or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Shares or the rights thereof or which are convertible into or exchangeable for Common Shares, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the assets or business of the Company, or any other corporate act or proceeding, whether of a similar character or otherwise. 6. Adjustment. The number and price per Common Share covered by any Option, and any other rights under any Option, shall be appropriately adjusted by the Board or the Committee, as the case may be, to reflect any subdivision (stock split) or consolidation (reverse split) of the issued Common Shares, or any other recapitalization of the Company, or any business combination or other transaction involving the Company (including, without limitation, rights offerings and issuances of securities for consideration that is less than the fair market value thereof), which shall affect the rights of holders of Common Shares. The Committee or the Board, as the case may be, shall provide for appropriate adjustment of the Options in the event of stock dividends or distributions of assets or securities owned by the Company to its stockholders. Without limiting the foregoing, any adjustment pursuant to this Section 6 shall (i) be on terms that are no less favorable to the Participant than those applicable to any other holder of stock options or convertible securities issued by the Company and (ii) entitle the Participant to receive, upon exercise of the Options, in addition to the Common Shares that remain subject to such Options, such stock, securities, other property and rights that the Participant, as a holder of Common Shares, would have received if such Options had been exercised prior to the date of the applicable event or transaction described in this Section 6. 4 7. Survival; Assignment. All agreements, representations and warranties made herein and in any certificates delivered pursuant hereto shall survive the issuance to the Participant of the Options and the Common Shares and, notwithstanding any investigation heretofore or hereafter made by the Participant or the Company or on the Participant's or the Company's behalf, shall continue in full force and effect. Without the prior written consent of the Company, the Participant may not assign any of his rights hereunder except as permitted by Section 2. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the heirs and permitted successors and assigns of such party; and all agreements herein by or on behalf of the Company, or by or on behalf of the Participant, shall bind and inure to the benefit of the heirs and permitted successors and assigns of such parties hereto. 8. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or sent by certified or registered mail, return receipt requested, postage prepaid, addressed, if to the Participant, to his attention at the most recent mailing address that the Company has on record and, if to the Company, to it at River Drive Center 2, 669 River Drive, Elmwood Park, New Jersey 07407-1361, Telecopier No.: (201) 703-3401, Attention: Chief Financial Officer. All such notices shall be conclusively deemed to be received and shall be effective, if sent by hand delivery, upon receipt, or if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed. 9. Waiver. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement. 10. Source of Rights. This Agreement shall be the sole and exclusive source of any and all rights which the Participant, and the Participant's personal representatives or heirs at law, may have in respect of the Options as granted hereunder. 11. Captions. The captions contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 12. Entire Agreement; Governing Law; Jurisdiction. This Agreement sets forth the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement. The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of this Agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey (without reference to the choice of law provisions of New Jersey law) applicable to contracts executed and to be wholly performed within such State, and the State or Federal court sitting in San Diego County, California shall have exclusive jurisdiction of the Company and the Participant for purposes of adjudicating any disputes under this Agreement. The Participant and the Company hereby consent to personal jurisdiction and venue in the State or Federal court sitting in San 5 Diego County, California and hereby waive any claim or defense that the party lacks minimum contacts with the forum, that such State or Federal court lacks personal jurisdiction of the parties, or that such State or Federal court is an improper or inconvenient venue. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Participant has executed this Agreement, both as of the day and year first above written. MEDICAL MANAGER CORPORATION By: ------------------------ Name: Title: PARTICIPANT --------------------------- Number of Options: (1) ------------ Option Price: ------------------ - ------------- (1) Under this form of agreement, 200,000 options, with an Option Price of $12.75, were issued to each of Messrs. Cameron, Mele and Vuolo (such number of options and Option Price give effect to the conversion of the options to purchase Medical Manager common stock into options to purchase WebMD common stock as a result of the merger of Medical Manager Corporation and WebMD Corporation). 6 -----END PRIVACY-ENHANCED MESSAGE-----


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended December 31, 2001

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to


Delaware		94-3236644
(State of incorporation)		(I.R.S. employer identification no.)

669 River Drive, Center 2 Elmwood Park, New Jersey (Address of principal executive office)		07407-1361 (Zip code)


PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
	Item 12. Security Ownership of Certain Beneficial Owners and Management
	Item 13. Certain Relationships and Related Transactions
PART IV
	Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
SIGNATURES
INDEX TO EXHIBITS
Amended & Restated 1998 Employee Stock Purchase
2001 Employee Non-Qualified Stock Option Plan
Employment Agreement
Letter Agreement
Employment Agreement
Employment Agreement
Agreement
Form of Amended and Restated Stock Option Agree.



						Number of
						Securities Underlying				Value of Unexercised
						Unexercised Options				In-the-Money Options
	Shares		Value			at December 31, 2001				at December 31, 2001
	Acquired on		Realized
Name	Exercise(#)		($)			Exercisable		Unexercisable		Exercisable($)		Unexercisable($)

Martin J. Wygod		—	$	—			1,334,000		3,746,000	$	—	$	5,063,850
Kevin M. Cameron		—		—			352,917		1,422,083		—		1,815,000
Roger C. Holstein		20,000		9,800	(1)		1,406,100		1,327,900		—		1,815,000
Charles A. Mele		—		—			1,193,617		1,324,383		—		1,815,000
Michael A. Singer		—		—			1,906,250		1,343,750		—		1,815,000
Anthony Vuolo		—		—			1,001,917		1,445,583		1,202,250		1,815,000
Patricia Fili-Krushel		—		—			550,000		—		—		—


Exhibit No.		Description

	2.1	Agreement and Plan of Reorganization dated as of February 24, 1998 among Registrant, MedNet Acquisition Corp. and ActaMed Corporation (incorporated by reference to Exhibit 2.0 to Registrant’s Registration Statement on Form S-1 (No. 333-70553) filed January 14, 1999)
	2.2	Agreement and Plan of Reorganization dated as of April 20, 1999, as amended, among Registrant, Merc Acquisition Corp. and MedE America Corporation (incorporated by reference to Exhibit 2.2 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 17, 1999)
	2.3	Agreement and Plan of Reorganization dated as of May 20, 1999, as amended, among Registrant, WebMD, Inc. and Water Acquisition Corp. (incorporated by reference to Exhibit 2.1 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 17, 1999)
	2.4	Agreement and Plan of Merger dated as of June 30, 1999, as amended, among Registrant, WebMD, Inc., Healtheon/ WebMD Corporation, GNN Merger Corp. and Greenberg News Networks, Inc. (incorporated by reference to Exhibit 2.3 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 17, 1999)
	2.5	Purchase Agreement dated as of December 20, 1999 among Electronic Data Systems Corporation, Eli Lilly and Company, Integrated Medical Systems, Inc., Kinetra LLC and Registrant (incorporated by reference to Exhibit 2.1 to Registrant’s Report on Form 8-K filed February 10, 2000)
	2.6	Agreement and Plan of Merger dated as of January 22, 2000 among Registrant, Envoy Corporation, Quintiles Transnational Corp. and QFinance, Inc. (incorporated by reference to Exhibit 2.1 to Registrant’s Report on Form 8-K filed January 27, 2000)
	2.7	Agreement and Plan of Merger dated as of February 13, 2000 between Registrant and Medical Manager Corporation (incorporated by reference to Exhibit 2.1 to Registrant’s Report on Form 8-K/A filed February 24, 2000), as amended by Amendment No. 1 dated as of June 18, 2000 (incorporated by reference to Exhibit 2.1 to Registrant’s Report on Form 8-K filed July 24, 2000)
	2.8	Agreement and Plan of Merger dated as of February 13, 2000 among Registrant, Avicenna Systems Corporation and CareInsite, Inc. (incorporated by reference to Exhibit 2.2 to Registrant’s Report on Form 8-K/A filed February 24, 2000), as amended by Amendment No. 1 dated as of June 18, 2000 (incorporated by reference to Exhibit 2.2 to Registrant’s Report on Form 8-K filed July 24, 2000)
	2.9	Agreement and Plan of Merger dated as of February 15, 2000 among Registrant, Tech Acquisition Corporation and OnHealth Network Company (incorporated by reference to Exhibit 2.1 to Registrant’s Report on Form 8-K/A filed February 22, 2000)
	2.10	Asset Purchase Agreement dated as of December 26, 2001 by and among Registrant, Medscape, Inc., Medscape Enterprises, Inc., and MedicaLogic/ Medscape, Inc. (incorporated by reference to Exhibit 2.1 to MedicaLogic/ Medscape, Inc.’s Report on Form 8-K filed January 10, 2002)
	3.1	Tenth Amended and Restated Certificate of Incorporation of Registrant, as currently in effect (incorporated by reference to Exhibit 3.1 to Registrant’s Report on Form 8-K filed September 13, 2000), as amended by Certificate of Change of Registered Agent and Location of Registered Office (incorporated by reference to Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001)
	3.2	Amended and Restated Bylaws of Registrant, as currently in effect (incorporated by reference to Exhibit 3.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001)
	4.1	Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)

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Name	Age		Position

Martin J. Wygod(1)		62	Chairman of the Board of Directors and Chief Executive Officer
Mark J. Adler, M.D.(2)(3)		45	Director
Paul A. Brooke(1)		56	Director
L. John Doerr(1)(2)(3)		50	Director
James V. Manning(1)		55	Director
Herman Sarkowsky		76	Director
Michael A. Singer		54	Director and Member of the Office of the President
Joseph E. Smith(1)(2)(3)		63	Director


										Long-Term
										Compensation

				Annual Compensation						Awards

										Securities
										Underlying			All Other
Name and Principal Position		Year		Salary($)			Bonus($)			Options(#)			Compensation($)

Martin J. Wygod			2001	$	350,750	(1)	$	—			1,395,000		$	—
	Chairman of the Board of		2000		300	(2)		—			—	(3)		—
	Directors and Chief
	Executive Officer
Kevin M. Cameron			2001		450,000			100,000			500,000			—
	Executive Vice President,		2000		135,000	(2)		—			—	(4)		—
	Business Development(5)
Roger C. Holstein			2001		450,000			175,000			500,000			—
	Chief Executive Officer,		2000		121,250	(2)		—			—	(6)		—
	WebMD Health(5)
Charles A. Mele			2001		450,000			100,000			500,000			—
	Executive Vice President,		2000		135,000	(2)		—			—	(7)		—
	General Counsel and
	Secretary
Michael A. Singer			2001		450,000			100,000			500,000			—
	Chief Executive Officer		2000		135,000	(2)		—			—	(8)		—
	and President, WebMD Medical Manager(5)
Anthony Vuolo			2001		450,000			100,000			500,000			—
	Executive Vice President		2000		135,000	(2)		—			—	(9)		—
	and Chief Financial Officer
Patricia Fili-Krushel(10)			2001		541,667			136,986	(11)		—			343,750	(12)
	Former Chief Executive		2000		727,564	(13)		363,014	(13)		550,000			—
	Officer, Consumer Sales and Services


	Number of Securities			Percent of Total			Exercise or
	Underlying Options			Options Granted to			Base Price Per				Grant Date
Name	Granted(#)			Employees in 2001(1)			Share		Expiration Date		Present Value(2)

Martin J. Wygod		1,395,000	(3)		6.1	%	$	3.43		9/20/11	$	3,104,108
Kevin M. Cameron		500,000	(3)		2.2	%		3.43		9/20/11		1,112,584
Roger C. Holstein		500,000	(3)		2.2	%		3.43		9/20/11		1,112,584
Charles A. Mele		500,000	(3)		2.2	%		3.43		9/20/11		1,112,584
Michael A. Singer		500,000	(3)		2.2	%		3.43		9/20/11		1,112,584
Anthony Vuolo		500,000	(3)		2.2	%		3.43		9/20/11		1,112,584
Patricia Fili-Krushel		—			—			—		—		—


	Common
Name and Address of Beneficial Owner	Stock			Warrants		Options		Percent

Mark J. Adler, M.D.		32,000	(1)		—		43,917		*
Paul A. Brooke		371,667	(2)		—		17,917		*
Kevin M. Cameron		25,000			—		498,750		*
L. John Doerr(3)		8,410,459			29,359		35,001		2.7
Patricia Fili-Krushel		—			—		550,000		*
Roger C. Holstein		20,436			—		1,406,100		*
James V. Manning		859,047	(4)		—		55,917		*
Charles A. Mele		564,581	(5)		—		1,253,450		*
Herman Sarkowsky		570,994	(6)		—		317,917		*
Michael A. Singer		9,222,625	(7)		—		1,906,250		3.5
Joseph E. Smith		29,250			—		43,917		*
Anthony Vuolo		27,029	(8)		—		1,086,750		*
Martin J. Wygod		7,943,090	(9)		—		1,646,500		3.1
All executive officers and directors as a group (16 persons)		27,618,498			29,359		9,604,781		11.6


Exhibit No.			Description

	4.2		Form of Convertible Promissory Note (incorporated by reference to Exhibit 4.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001)
	10.1		Form of Indemnification Agreement to be entered into by Registrant with each of its directors and officers (incorporated by reference to Exhibit 10.1 to Registrant’s Registration Statement on Form S-1 (No. 333-70553) filed January 14, 1999)
	10.2		Form of Series B Preferred Stock Purchase Warrant between Registrant and certain of Registrant’s Investors (incorporated by reference to Exhibit 10.22 to Registrant’s Registration Statement on Form S-1 (No. 333-70553) filed January 14, 1999)
	10.3		Amended and Restated Investors’ Rights Agreement dated as of January 28, 1998 among Registrant and certain of Registrant’s Security Holders (incorporated by reference to Exhibit 10.10 to Registrant’s Registration Statement on Form S-1 (No. 333-70553) filed January 14, 1999)
	10.4		Services Agreement dated January 27, 1999 between WebMD, Inc. and Gleacher NatWest, Inc., currently known as Gleacher & Co. LLC (incorporated by reference to Exhibit 10.37 to Amendment No. 1 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 30, 1999)
	10.5		Warrant to purchase shares of common stock of Registrant dated December 29, 2000 issued to Gleacher & Co. LLC (incorporated by reference to Exhibit 10.43 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999)
	10.6		Warrant to purchase shares of common stock of Registrant dated March 9, 2000 issued to Eric J. Gleacher (incorporated by reference to Exhibit 10.44 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999)
	10.7*		Distribution and Cross Promotion Agreement dated May 6, 1999 among Microsoft Corporation, WebTV Networks, Inc., MSNBC Interactive News, L.L.C. and WebMD, Inc. (incorporated by reference to Exhibit 10.33 to Amendment No. 1 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 30, 1999)
	10.8		Investment Agreement dated May 12, 1999 among WebMD, Inc., Microsoft Corporation and each of the other persons listed on Schedule I thereto (incorporated by reference to Exhibit 10.36 to Amendment No. 1 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 30, 1999)
	10.9		Warrant to Purchase Shares of Common Stock of WebMD, Inc. dated May 12, 1999 issued to Microsoft Corporation (incorporated by reference to Exhibit 10.9 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)
	10.10	*	Agreement dated May 19, 1999 among Registrant, WebMD, Inc. and Microsoft Corporation (incorporated by reference to Exhibit 10.34 to Amendment No. 1 to Registrant’s Registration Statement on Form S-4 (No. 333-86685) filed September 30, 1999)
	10.11		Letter Agreement dated March 27, 2000 between Registrant and Microsoft Corporation (incorporated by reference to Exhibit 10.29 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999)
	10.12		Stock Purchase Agreement dated January 26, 2000 between Registrant and Janus Capital Corporation (incorporated by reference to Exhibit 10.10 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000)
	10.13		Healtheon/ WebMD Corporation Registration Rights Agreement dated January 26, 2000 among Registrant, Eastrise Profits Limited, AHN/FIT Cable, LLC, AHN/FIT Internet, LLC, News America Incorporated and Fox Broadcasting Company (incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000), as amended by Amendment dated February 15, 2001 (incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)


Exhibit No.			Description

	10.14		Healtheon/WebMD Media Services Agreement dated January 26, 2000 among Registrant, Eastrise Profits Limited and Fox Entertainment Group, Inc. (incorporated by reference to Exhibit 10.5 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000) , as amended by Amendment dated February 15, 2001 (incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
	10.15		Content License Agreement dated January 26, 2000 between The News Corporation Limited and Registrant (incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000)
	10.16		Letter Agreement dated December 29, 2000 between Registrant and The News Corporation Limited (incorporated by reference to Exhibit 10.17 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)
	10.17		Data Rights Agreement dated as of May 26, 2000, as amended, between Registrant and Quintiles Transnational Corp. (incorporated by reference to Exhibit 10.18 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)
	10.18		Internet Product Development and Marketing Agreement dated as of May 26, 2000 between Registrant and Quintiles Transnational Corp. (incorporated by reference to Exhibit 10.19 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)
	10.19	**	Amended and Restated Stock Option Agreement dated August 21, 2000 between Registrant (as successor to Medical Manager Corporation) and Martin J. Wygod (incorporated by reference to Exhibit 10.21 to Registrant’s Amendment on Form 10-K/A to Annual Report on Form 10-K for the year ended December 31, 2000)
	10.20	**	Healtheon Corporation 1996 Stock Plan and Form of Stock Option Agreement (incorporated by reference to Exhibit 10.2 to Amendment No. 2 to Registrant’s Registration Statement on Form S-1 (No. 333-70553) filed February 10, 1999)
	10.21	**	WebMD Corporation Amended and Restated 1998 Employee Stock Purchase Plan
	10.22	**	WebMD Corporation 2000 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to Registrant’s Registration Statement on Form S-4 (No. 333-39592) filed August 1, 2000)
	10.23	**	WebMD, Inc. Amended and Restated 1997 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to Registrant’s Registration Statement on Form S-8 (No. 33-90795) filed November 12, 1999)
	10.24	**	Envoy Stock Plan (incorporated by reference to Exhibit 99.1 to Registrant’s Registration Statement on Form S-8 (No. 333-42616) filed July 31, 2000)
	10.25	**	Amended and Restated 1989 Class A Non-Qualified Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 10.1 to Medical Manager Corporation’s Registration Statement on Form S-1 (No. 333-28654) filed May 18, 1989)
	10.26	**	Amended and Restated 1989 Class B Non-Qualified Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 10.2 to Medical Manager Corporation’s Registration Statement on Form S-1 (No. 333-28654) filed May 18, 1989)
	10.27	**	1991 Director Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.2 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-46640) filed March 24, 1992)
	10.28	**	Amended and Restated 1991 Special Non-Qualified Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.3 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-36041) filed September 19, 1997)
	10.29	**	Form of Stock Option Agreement made as of December 7, 1994 between Medical Manager Corporation and certain individuals (incorporated by reference to Exhibit 4.5 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-21555) filed February 11, 1997)


Exhibit No.			Description

	10.30	**	Medical Manager Corporation’s 1996 Amended and Restated Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Medical Manager Corporation’s (Commission File No. 0-29090) Quarterly Report on Form 10-Q for the quarter ended September 30, 1998)
	10.31	**	Medical Manager Corporation’s 1996 Amended and Restated Non-Employee Director’s Stock Plan (incorporated by reference to Exhibit 10.2 to Medical Manager Corporation’s (Commission File No. 0-29090) Annual Report on Form 10-K for the fiscal year ended December 31, 1997)
	10.32	**	1996 Class C Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.1 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-36041) filed September 19, 1997)
	10.33	**	1997 Class D Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.2 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-36041) filed September 19, 1997)
	10.34	**	1998 Class E Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.1 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-72517) filed March 15, 1999)
	10.35	**	The 1999 Medical Manager Corporation Stock Option Plan for Employees of Medical Manager Systems, Inc. (incorporated by reference to Exhibit 10.28 to Medical Manager Corporation’s Annual Report on Form 10-K for the year ended June 30, 1999)
	10.36	**	Form of Stock Option Agreement between Registrant (as successor to Medical Manager Corporation) and Michael A. Singer (incorporated by reference to Exhibit 99.5 to Amendment No. 1 to Medical Manager Corporation’s Registration Statement on Form S-4 (No. 333-81123) filed June 24, 1999)
	10.37	**	1995 Avicenna NQ Stock Option Plan, as amended (incorporated by reference to Exhibits 4.1 and 4.2 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-19043) filed December 31, 1996)
	10.38	**	1998 Porex Technologies Corp. Stock Option Plan of Medical Manager Corporation (incorporated by reference to Exhibit 4.2 to Medical Manager Corporation’s Registration Statement on Form S-8 (No. 333-72517) filed March 15, 1999)
	10.39	**	CareInsite, Inc. 1999 Officer Stock Option Plan (incorporated by reference to Exhibit 10.18 to Amendment No. 6 to CareInsite, Inc.’s Registration Statement on Form S-1 (No. 333-75071) filed June 11, 1999)
	10.40	**	CareInsite, Inc. 1999 Employee Stock Option Plan (incorporated by reference to Exhibit 10.17 to Amendment No. 6 to CareInsite, Inc.’s Registration Statement on Form S-1 (No. 333-75071) filed June 11, 1999)
	10.41	**	CareInsite, Inc. 1999 Director Stock Option Plan (incorporated by reference to Annex H to the Proxy Statement/ Prospectus included in Registrant’s Registration Statement on Form S-4 (No. 333-39592) filed June 19, 2000)
	10.42	**	Amendment to the Company Stock Option Plans of Medical Manager Corporation and CareInsite, Inc. (incorporated by reference to Exhibit 99.28 to Registrant’s Registration Statement on Form S-8 (No. 333-47250) filed October 4, 2000)
	10.43		Domestic Assignment Agreement dated as of February 15, 2001 among Registrant, Healtheon/ WebMD Cable Corporation, Healtheon/ WebMD Internet Corporation, The News Corporation Limited, Fox Entertainment Group, Inc. AHN/FIT Cable, LLC and AHN/FIT Internet, LLC (incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)
	10.44		International Assignment Agreement dated as of February 15, 2001 among Registrant, HW International Holdings, Inc., The News Corporation Limited, Eastrise Profits Limited and IJV Holdings Inc. (incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001)


Exhibit No.			Description

	10.45		Settlement Agreement dated October 12, 2001 between Registrant and Quintiles Transnational Corp. (incorporated by reference to Exhibit 10.01 to Quintiles Transnational Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001)
	10.46	**	WebMD Corporation 2001 Employee Non-Qualified Stock Option Plan, as amended
	10.47	**	Employment Agreement dated as of April 4, 2000 between Registrant (as successor to Medical Manager Corporation) and Kevin Cameron
	10.48	**	Employment Agreement dated as of November 6, 1997 between Registrant (as successor to Synetic, Inc.) and Roger C. Holstein (incorporated by reference to Exhibit 10.13 to Synetic, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 30, 1998)
	10.49	**	Employment Agreement dated as of May 16, 1999 between Registrant (as successor to Synetic, Inc.) and Michael A. Singer (incorporated by reference to Exhibit 10.26 to Medical Manager Corporation’s Annual Report on Form 10-K for the fiscal year ended June 30, 1999)
	10.50	**	Letter Agreement dated as of September 5, 2000 between Registrant (as successor to Medical Manager Corporation) and Michael A. Singer
	10.51	**	Employment Agreement dated as of July 1, 2000 between Registrant (as successor to Medical Manager Corporation) and Charles A. Mele, as amended
	10.52	**	Employment Agreement dated as of July 1, 2000 between Registrant (as successor to Medical Manager Corporation) and Anthony Vuolo, as amended
	10.53	**	Agreement dated as of July 2, 2001 between Registrant and Patricia Fili-Krushel
	10.54	**	Form of Amended and Restated Stock Option Agreement dated August 21, 2000 between Registrant (as successor to Medical Manager Corporation) and each of Kevin Cameron, Charles A. Mele and Anthony Vuolo
	10.55	**	Agreement dated October 8, 2001 between Registrant and Martin J. Wygod***
	21		Subsidiaries of Registrant***
	23.1		Consent of Ernst & Young LLP, Independent Auditors***
	24.1		Power of Attorney***


***	Previously filed as an exhibit to this Annual Report on Form 10-K.


	*Arrangements with Martin J. Wygod*


	*Arrangements with Kevin M. Cameron*


	*Arrangements with Roger C. Holstein*


	*Arrangements with Charles A. Mele*