Exhibit 10.7
HEALTHPORT TECHNOLOGIES,
LLC
First Amendment to Employment
Agreement
Dated: December 30, 2008
WHEREAS, HealthPort Technologies, LLC (together with any
successors and assigns hereunder, the “Company”)
, and Brian M. Grazzini ( “Executive ”) entered
into an Executive Employment Agreement, dated March 3, 2008
(the “Agreement ”): and
WHEREAS, the Company and Executive now wish to amend the
Agreement to comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended (the
“Code ”), and the treasury regulations and other
official guidance promulgated thereunder in accordance with the
provisions of Section 16(c) of the Agreement.
NOW, THEREFORE,
in consideration of the foregoing,
of the mutual promises contained herein and of other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree to amend the
Agreement as set forth herein.
FIRST : The second sentence of Section 15 of the
Agreement is deleted in its entirety and replaced with the language
underscored below such that, as amended, Section 15 reads as
follows:
“Section 15. 280G Parachute
Payments . In the event the Company determines in good faith
that any payments or benefits (whether made or provided pursuant to
this Agreement or otherwise) provided to Executive constitute
‘parachute payments’ within the meaning of
Section 280G of the Code (‘ Parachute Payments
’), and will be subject to an excise tax imposed pursuant to
Section 4999 of the Code, the Executive’s Parachute
Payments will be reduced to an amount determined by the Company in
good faith to be the maximum amount that may be provided to the
Executive without resulting in any portion of such Parachute
Payments being subject to such excise tax (the amount of such
reduction, ‘ Cutback Benefits ’), except that no
such reduction shall be made to the extent that the amounts
receivable by Executive net of all such taxes (including, without
limitation, any excise taxes) on such amounts before such
reductions would be greater than the amounts receivable by the
Executive net of all such taxes after such reduction. The Parachute
Payment reduction contemplated by the preceding sentence, if
applicable, shall be implemented by determining the
‘Parachute Payment Ratio’ (as defined below) for each
Parachute Payment and then reducing the Parachute Payment in order
beginning with the Parachute Payment with the highest Parachute
Payment Ratio. For Parachute Payments with the same Parachute
Payment Ratio, such Parachute Payments shall be reduced based on
the time of payment of such Parachute Payments, with amounts having
later payment dates being reduced first. For Parachute Payments
with the same Parachute Payment Ratio and the same time of payment,
such Parachute Payments shall be reduced on a pro rata basis (but
not below zero) prior to reducing Parachute Payments with a lower
Parachute Payment Ratio. For purposes hereof, the term
‘Parachute Payment Ratio’ shall mean a fraction the
numerator of which is the value of the
1
applicable Parachute Payment for purposes of
Section 280G of the Code and the denominator of which is the
intrinsic value of such Parachute Payment. Notwithstanding the
foregoing, the Company shall use reasonable efforts to obtain the
approval of the Cutback Benefits by the Company’s
shareholders in the manner contemplated by Q&A 7 of Treas. Reg.
Section 1.280G, it being understood and agreed that the
Company does not guarantee that such approval will be obtained. If,
and only if, the Company submits the Cutback Benefits for such
approval by the Company’s shareholders and such approval is
obtained, the Executive shall be entitled to receive the Cutback
Benefits without regard to the first sentence of this
paragraph.”
SECOND : The following provision shall be added as a
new Section 17 to the Agreement:
“17. Section 409A
.
(a) The intent of the parties is
that payments and benefits under this Agreement comply with
Section 409A of the Internal Revenue Code, as amended (the
‘ Code ’), and, accordingly, to the maximum
extent permitted, this Agreement shall be interpreted to be in
compliance therewith. To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such
modification shall be made in good faith and shall, to the maximum
extent reasonably possible, maintain the original intent and
economic benefit to the parties hereto of the applicable provision
without violating the provisions of Code Section 409A. In no
event whatsoever shall the Company be liable for any additional
tax, interest or penalty that may be imposed on the Executive by
Code Section 409A or damages for failing to comply with Code
Section 409A.
(b) Notwithstanding any other
payment schedule provided herein to the contrary, if the Executive
is deemed on the date of termination to be a ‘specified
employee’ within the meaning of that term under Code
Section 409A(a)(2)(B), then each of the following shall
apply:
(i) With regard to any payment that
is considered deferred compen
