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Published: 2008-03-26

Employment Agreement - Healtheon/WebMD Corp. and Jack Dennison



                           HEALTHEON/WEBMD CORPORATION
                            3399 PEACHTREE STREET NE
                             400 THE LENOX BUILDING
                             ATLANTA, GEORGIA 30326

September 12, 2000


Mr. Jack Dennison
Healtheon/WebMD Corporation
3399 Peachtree Street NE
400 The Lenox Building
Atlanta, Georgia 30326

Dear Jack:

         This purpose of this letter is to evidence the agreement between you
and Healtheon/WebMD Corporation (the "Company") concerning changes to your
employment arrangements with the Company.

         You are currently employed as Executive Vice President, General Counsel
and Secretary of the Company without a written employment agreement. Your
employment arrangements are modified as of the date hereof as follows:

         1.       DUTIES AND RESPONSIBILITIES.

                  (a) IN GENERAL. You shall have all of the responsibilities,
duties, powers and authorities which are consistent with your position as
Executive Vice President, General Counsel and Secretary of the Company, and in
this regard shall be responsible for all legal affairs of the Company and its
subsidiaries, and shall have such other reasonable and lawful responsibilities
commensurate with your position as shall be assigned to you by the Chief
Executive Officer of the Company (or Co-Chief Executive Officers, if there are
more than one), all of which shall be consistent with the responsibilities of
similarly situated executives of comparable companies in similar lines of
business.

                  (b) REPORTING RELATIONSHIPS. You will report directly and
solely to the Chief Executive Officer of the Company or Co-Chief Executive
Officers if there shall be more than one. All other employees of the Company and
its subsidiaries whose principal function is the performance of legal services
will report to you, either directly or indirectly through other persons
reporting to you.

                  (c) BASE OF OPERATIONS; RESIDENCE. Your base of operations
shall be in Atlanta, Georgia, but you shall be entitled to reside in Austin,
Texas, and the Company shall pay your reasonable commuting expenses between
Atlanta and Austin and living expenses in Atlanta.


>PAGE>   3


         2. BASE SALARY; BONUS. Effective on the date hereof your annual base
salary is increased to $450,000, which amount shall be subject to increase upon
periodic review by the Company. You shall also be entitled to participate in any
bonus program established for the benefit of senior executive officers of the
Company.

         3. ADDITIONAL OPTION GRANTS. On September 12, 2000, the Compensation
Committee of the Board of Directors of the Company granted to you additional
stock options to acquire 425,000 shares of the common stock of the Company at an
exercise price of $16.125 per share (the "New Options"). The New Options were
granted under the Company's 2000 Long-Term Incentive Plan (the "Plan"), which
together with the terms contained in this letter, sets forth the terms and
conditions of the New Options and is incorporated herein by reference. The New
Options are non-qualified stock options and have a term of ten years from the
date of grant. The New Options will vest and become exercisable as to 1/48th of
the shares covered thereby on the 12th day each month from October 2000 to and
including September 2004, subject to Paragraph 3 below.

         4. ACCELERATED VESTING AND SEVERANCE COMPENSATION FOLLOWING
TERMINATION. Upon the termination of your employment as a result of the event
described in the first column below, your Equity Compensation (defined below)
shall vest as set from in the corresponding second column (vesting to include
the waiver of repurchase rights with respect to any restricted stock) and you
shall become entitled to severance compensation and benefits as set forth in the
corresponding third column, except that the provisions of the plans or
agreements under which Equity Compensation has previously been awarded to you
currently provide for vesting, post-termination exercisability or severance
compensation and benefits more favorable to you than those described in this
paragraph 4., those provisions shall apply.


>TABLE>
>CAPTION>
               EVENT                    VESTING OF EQUITY COMPENSATION          SEVERANCE COMPENSATION
-------------------------------------------------------------------------------------------------------------
>S>                                   >C>                                 >C>
Termination by the Company for        Any Equity Compensation that has    No further compensation or
Cause (defined below)                 not already vested shall be         benefits except as currently
                                      forfeited; any vested Equity        provided in your existing written
                                      Compensation shall continue to be   employment arrangement, if any.
                                      exercisable until the 10th
                                      anniversary of the date of grant.
>/TABLE>


                                      -2-
>PAGE>   4


>TABLE>
>CAPTION>
               EVENT                  VESTING OF EQUITY COMPENSATION           SEVERANCE COMPENSATION
-------------------------------------------------------------------------------------------------------------
>S>                                   >C>                                 >C>
Termination by the Company without    All Equity Compensation shall       (1)  Base salary (less applicable
Cause                                 become immediately vested and       withholding) shall continue to be
                                      exercisable and shall continue to   paid for 12 months following 
                                      be exercisable until the 10th       termination; and
                                      anniversary of the date of grant.

                                                                          (2) The Company shall continue
                                                                          benefits to you and/or your family
                                                                          for 12 months following termination
                                                                          at least equal to the benefits that
                                                                          would have been provided under the
                                                                          health and welfare benefit plans
                                                                          and programs of the Company in
                                                                          effect on the date of your
                                                                          termination.

-------------------------------------------------------------------------------------------------------------
Resignation by you for Good Reason    Same as termination by the          Same as termination by the
(defined below)                       Company without Cause.              Company without Cause.

-------------------------------------------------------------------------------------------------------------
Resignation by you without Good       Same as termination by the          Same as termination by the
Reason (defined below)                Company with Cause.                 Company with Cause.

-------------------------------------------------------------------------------------------------------------
Your death or Disability (defined     Same as termination by the          Same as termination by the
below)                                Company without Cause.              Company without Cause.
>/TABLE>

         For purposes of this paragraph 4., the following definitions shall
         apply:

         a.       "Cause" shall mean (i) the willful and continued failure to
                  perform substantially your duties with the Company (other than
                  any such failure resulting from incapacity due to physical or
                  mental illness, and specifically excluding any failure, after
                  reasonable efforts, to meet performance expectations), after a
                  written demand for substantial performance is delivered to you
                  by the Chief Executive Officer or the Board of Directors of
                  the Company which specifically identifies the manner in which
                  the Chief Executive Officer or the Board believes that you
                  have not substantially performed your duties, or (ii) willful
                  engaging in illegal conduct or gross misconduct which is
                  materially and demonstrably injurious to the Company. For
                  purposes of this provision, no act or failure to act, shall be
                  considered "willful" unless it is done, or


                                       -3-


>PAGE>   5


                  omitted to be done, by you in bad faith or without reasonable
                  belief that your action or omission was in the best interests
                  of the Company.

         b.       "Good Reason" shall mean any of the following, without your
                  written consent, (i) a diminution in your position, authority,
                  duties or responsibilities, (ii) a requirement that you report
                  to any person other than the Chief Executive Officer, or
                  Co-Chief Executive Officers if there are more than one, of the
                  Company, (iii) a reduction in your compensation or fringe
                  benefits, (iv) a breach by the Company of this letter or any
                  other material agreement between you and the Company, or (v) a
                  change in the location from which you are required to perform
                  your services to the Company. If you believe any of the above
                  events or circumstances has occurred, you shall give the
                  Company notice of such event or circumstance. The Company
                  shall have 30 days after such notice to cure any claimed event
                  or circumstance of Good Reason. The Company shall notify you
                  of the timely cure of any claimed event or circumstance of
                  Good Reason and the manner in which such cure was effected,
                  and upon receipt of such written notice of cure from the
                  Company and implementation of an effective cure by the Company
                  within such 30 day period, any notice by you of termination
                  based on such claimed Good Reason shall be deemed withdrawn.

         c.       "Equity Compensation" shall mean all of your outstanding
                  options to acquire common and other stock of the Company
                  (including without limitation the New Options), all of your
                  restricted stock of the Company, and all of your other
                  contingent compensation subject to vesting, in each case
                  whether currently owned or hereafter acquired by you.

5.       GROSS-UP PAYMENT.

         (i) Anything in this letter to the contrary or any termination of the
Equity Compensation notwithstanding, in the event it shall be determined that
any payment or distribution or benefit received or to be received by you
pursuant to the terms of this letter or any other payment or distribution or
benefit made or provided by the Company, or any of its subsidiaries and
affiliates, to or for your benefit (whether pursuant to this letter or otherwise
and determined without regard to any additional payments required under this
Paragraph 5) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") or any
interest or penalties are incurred by you 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 you shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by you 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 the Excise Tax imposed upon the Gross-Up Payment, you retain 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 your 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,
you shall be deemed to (i) pay federal income taxes at the highest marginal
rates of 


                                      -4-

>PAGE>   6


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.

                  (ii) Subject to the provisions of Paragraphs 5(i) and 5(iii),
all determinations required to be made under this Paragraph 5, 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 you
within 15 business days of the receipt of notice from you 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 Paragraph 5, shall
be paid by the Company to you 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 you. 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 Paragraph 5(iii) and you thereafter
are 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 your benefit.

                  (iii) You 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 you are
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. You shall
not pay such claim prior to the expiration of the 30-day period following the
date on which you gave 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 you in writing prior to the expiration of such period that it
desires to contest such claim, you shall:

                  (a) give the Company any information reasonably requested by
the Company relating to such claim;

                  (b) 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

                  (c) 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 


                                      -5-

>PAGE>   7


indemnify and hold you 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 Paragraph
5(iii), 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 you to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and you 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 you to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to you, on an interest-free basis and shall
indemnify and hold you 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 your taxable year 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 you shall be entitled to settle or contest, as the case may be,
any other issue (an "Other Issue") raised by the IRS or any other taxing
authority; provided, however, that if, solely as a result of any contest by the
Company pursuant to this Paragraph 5(iii), your ability to settle or otherwise
resolve any such Other Issue is delayed, then the Company will reimburse you, on
an after-tax basis, for any additional interest incurred by you as a result of
such delay.

                  (iv) If, after the receipt by you of an amount advanced by the
Company pursuant to Paragraph 5(iii), you becomes entitled to receive any refund
with respect to such claim, you shall (subject to the Company's complying with
the requirements of Paragraph 5(iii) 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 you of an amount advanced by the
Company pursuant to Paragraph 5(iii), a determination is made that you shall not
be entitled to any refund with respect to such claim and the Company does not
notify you 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.

         6.       RESTRICTIONS ON YOUR CONDUCT.

                  (a) GENERAL. You understand and agree that the purpose of the
provisions of this Paragraph 6 is to protect legitimate business interests of
the Company, as more fully described below, and is not intended to eliminate
your post-employment competition with the Company per se, nor is it intended to
impair or infringe upon your right to work, earn a living, or acquire and
possess property from the fruits of your labor. You hereby acknowledge that the
post-employment restrictions set forth in this Paragraph 6 are reasonable and
that they do not, and will not, unduly impair your ability to earn a living
after the termination of this Agreement. Therefore, subject to the limitations
of reasonableness imposed by law, you shall be subject to the restrictions set
forth in this Paragraph 6.


                                      -6-

>PAGE>   8


                  (b) DEFINITIONS. The following capitalized terms used in this
Paragraph 6 shall have the meanings assigned to them below, which definitions
shall apply to both the singular and the plural forms of such terms:

                  "COMPETITIVE SERVICES" means the delivery of information and
communications services to the healthcare industry.

                  "DETERMINATION DATE" means the date of termination of your
employment with the Company for any reason whatsoever or any earlier date
(during your employment) of an alleged breach of the Restrictive Covenants by
you.

                  "PERSON" means any individual or any corporation, partnership,
joint venture, limited liability company, association or other entity or
enterprise.

                  "PRINCIPAL OR REPRESENTATIVE" means a principal, owner,
partner, shareholder, joint venturer, investor, member, trustee, director,
officer, manager, employee, agent, representative or consultant.

                  "PROTECTED CUSTOMERS" means any Person to whom the Company has
sold its products or services or solicited to sell its products or services
during the twelve (12) months prior to the Determination Date; provided,
however, that Protected Customer shall not include any Person with which you can
reasonably demonstrate that you had a pre-existing professional relationship
prior to the commencement of your employment with the Company.

                  "PROTECTED EMPLOYEES" means employees of the Company who were
employed by the Company at any time within six months prior to the Determination
Date and with whom you had direct, personal and continuing dealings on behalf of
the Company or whom you directly supervised.

                  "RESTRICTED PERIOD" means the Employment Period and a period
extending two years from the termination of your employment with the Company.

                  "RESTRICTIVE COVENANTS" means the restrictive covenants
contained in Paragraph 6(c) hereof.

                  (c) RESTRICTIVE COVENANTS.

                      (i) Nonsolicitation of Protected Employees. You understand
and agree that the relationship between the Company and each of its Protected
Employees constitutes a valuable asset of the Company and may not be converted
to your own use. Accordingly, you hereby agree that during the Restricted Period
you shall not directly or indirectly on your own behalf or as a Principal or
Representative of any Person or otherwise solicit or induce any Protected
Employee to terminate his or her employment relationship with the Company or to
enter into employment with any other Person.


                                      -7-


>PAGE>   9


                      (ii) Restriction on Relationships with Protected
Customers. You understand and agree that the relationship between the Company
and each of its Protected Customers constitutes a valuable asset of the Company
and may not be converted to your own use. Accordingly, you hereby agrees that,
during the Restricted Period, you shall not, without the prior written consent
of the Company, directly or indirectly, on your own behalf or as a Principal or
Representative of any Person, solicit, divert, take away or attempt to solicit,
divert or take away a Protected Customer for the purpose of providing or selling
Competitive Services; provided, however, that the prohibition of this covenant
shall apply only to Protected Customers with whom you had Material Contact on
the Company's behalf during the twelve (12) months immediately preceding the
termination of your employment. For purposes of this Agreement, you had
"MATERIAL CONTACT" with a Protected Customer if (a) you had direct business
dealings with the Protected Customer on the Company's behalf or (b) you were
responsible for supervising or coordinating the dealings between the Company and
the Protected Customer.

                  (d) ENFORCEMENT OF RESTRICTIVE COVENANTS.

                      (i) Rights and Remedies Upon Breach. In the event you
breach, or threaten to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the right and remedy to enjoin,
preliminarily and permanently, you from violating or threatening to violate the
Restrictive Covenants and to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, it being agreed that any breach
or threatened breach of the Restrictive Covenants would cause irreparable injury
to the Company and that money damages would 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. In
addition, the Restricted Period shall be extended for the period of any such
breach or threatened breach.

                      (ii) Severability of Covenants. You acknowledge and agree
that the Restrictive Covenants 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. 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.

         7.       MISCELLANEOUS. This letter constitutes the entire agreement of
the parties and shall supercede any and all previous contracts, arrangements or
understandings between the parties relating to the subject matter hereof, and
shall not be amended except in writing signed by each of the parties. This
Agreement shall be governed and construed in accordance with the laws of the
State of Delaware.


                                      -8-


>PAGE>   10


                                    Sincerely,

                                    Healtheon/WebMD Corporation

                                    By: /s/ W. Michael Long
                                        ------------------------------------
                                         Authorized Representative


Accepted and agreed:


     /s/ Jack Dennison
-------------------------------
Jack Dennison

September 12, 2000


                                      -9-