SEVERANCE AGREEMENT
Exhibit 10.1
This
SEVERANCE AGREEMENT (the “Agreement”) is made as of July
30, 2009 (the “Effective
Date”), by and among WELLCARE HEALTH PLANS, INC., a Delaware corporation
(“WellCare”),
COMPREHENSIVE HEALTH MANAGEMENT, INC., a Florida corporation (the “Corporation”), and Xxxx
Xxxxxx, an individual (“Executive”), with respect to
the following facts and circumstances:
ARTICLE
1
TERM
This
Agreement shall continue from the Effective Date for a term (the “Term”) of three (3)
years, unless earlier terminated under Article 3; provided, that the
Term shall automatically renew for additional one-year periods unless either the
Corporation or Executive gives notice of non-renewal at least ninety (90) days
prior to expiration of the Term (as it may have been extended by any renewal
period). In the event of a Change of Control (as defined in Section 3.1.4), if the remaining Term is less than one (1) year, the
Term will be extended so that the Term is a one-year period from the date of the
Change of Control; provided, however, that in the occurrence of a Change of
Control, the Term will not automatically renew for any additional period
thereafter.
ARTICLE
2
INDEMNIFICATION
WellCare,
the Corporation and Executive have heretofore entered into a separate
indemnification agreement (the “Indemnification
Agreement”).
ARTICLE
3
TERMINATION
3.1 Grounds for
Termination.
3.1.1
Death or
Disability. Executive’s employment shall terminate immediately
in the event of Executive’s death or Disability. “Disability” means Executive is
unable to engage in any substantial gainful business activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or that has rendered Executive unable effectively to carry
out his duties and obligations under this Agreement or unable to participate
effectively and actively in the management of WellCare and the Corporation for a
period of ninety (90) consecutive days or for shorter periods aggregating to one
hundred twenty (120) days (whether or not consecutive) during any consecutive
twelve (12) months of the Term.
3.1.2 Cause. The
Corporation shall have the right to terminate Executive’s employment by giving
written notice of such termination to Executive upon the occurrence of any one
or more of the following events (“Cause”):
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(a)
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any
willful act or willful omission, other than as a result of Executive’s
disability, that represents a breach of any of the terms of this Agreement
to the material detriment of the
Corporation;
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(b)
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bad
faith by the Executive in the performance of his duties, consisting of
willful acts or willful omissions, other than as a result of Executive’s
disability, to the material detriment of the Corporation;
or
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(c)
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Executive’s
conviction of, or pleading nolo contendere to, a crime that constitutes a
felony involving fraud, conversion, misappropriation, or embezzlement
under the laws of the Untied States or any political subdivision thereof,
which conviction has become final and
non-appealable.
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3.1.3 Good
Reason. Executive may terminate his employment under this
Agreement by giving written notice to the Corporation upon the occurrence of any
one or more of the following events following a Change of Control (“Good Reason”):
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(a)
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a
material diminution during the Term in Executive’s authority, duties or
responsibilities;
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(b)
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a
material diminution during the Term in Executive’s base salary or annual
bonus opportunity;
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(c)
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a
material breach by the Corporation or WellCare of any term of the
Agreement; or
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(d)
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the
Corporation’s or WellCare’s requiring Executive to be based at any office
or location outside of fifty miles from Executive’s current employment,
except for travel reasonably required in the performance of Executive’s
responsibilities.
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provided, however, that prior to a Change of Control only the occurrence
of any one or more of the following events will constitute Good
Reason:
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(a)
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a material diminution during the Term in
Executive’s base salary or annual bonus opportunity, except as applicable
generally to other similarly situated senior executives of the
Corporation;
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(b)
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a material breach by the Corporation or WellCare
of any term of the Agreement; or
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(c)
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the Corporation’s or WellCare’s requiring
Executive to be based at any office or location outside of fifty miles
from Executive’s current employment, except for travel reasonably required
in the performance of Executive’s
responsibilities.
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3.1.4 Change of
Control. For purposes of this Agreement, a “Change of Control” shall mean
the occurrence of any of the following events:
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(a)
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if
any person or group is or becomes the beneficial owner, directly or
indirectly, of securities of WellCare representing more than 50% of either
the then fair market value of the then outstanding securities
of WellCare or the combined voting power of the then
outstanding securities of WellCare;
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(b)
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the
direct or indirect sale or transfer by WellCare of substantially all of
its assets in a single transaction or a series of related
transactions;
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(c)
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the
merger, consolidation or reorganization of WellCare with or into another
corporation or other entity, in which the shareholders of more than 50% of
the voting power of WellCare’s voting securities immediately before such
merger, consolidation or reorganization do not own more than 50% of the
voting power of the voting securities of the surviving corporation or
other entity immediately after such merger, consolidation or
reorganization; or
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(d)
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during
any consecutive 12-month period, individuals who at the beginning of such
period constitute the Board of Directors of WellCare (the “Board”) (together with
any new directors whose election by the Board or nomination for election
by the stockholders of WellCare was approved by a vote of a majority of
the directors on the Board then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board then in
office.
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Notwithstanding
the terms of this Section 3.1.4, none of the foregoing events shall constitute a
Change of Control if such event is not a “Change in Control Event” under
Treasury Regulations Section 1.409A-3(i)(5) or successor guidance of the
Internal Revenue Service.
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For purposes of determining whether a Change of Control has occurred, a Person
or Group shall not be deemed to be “unrelated” if: (a) such Person or Group
directly or indirectly has Beneficial Ownership of more than 50% of the issued
and outstanding voting power of WellCare’s voting securities immediately before
the transaction in question, (b) WellCare has Beneficial Ownership of more than
50% of the voting power of the issued and outstanding voting securities of such
Person or Group, or (c) more than 50% of the voting power of the issued and
outstanding voting securities of such Person or Group are owned, directly or
indirectly, by Beneficial Owners of more than 50% of the issued and outstanding
voting power of WellCare voting securities immediately before the transaction in
question.
The
terms “Person,” “Group,” “Beneficial Owner,” and “Beneficial Ownership” shall
have the meanings used in the Securities Exchange Act of 1934, as
amended. Notwithstanding the foregoing, (a) Persons will not be
considered to be acting as a “Group” solely because they purchase or own stock
of WellCare at the same time, or as a result of purchases in the same public
offering, (b) Persons will be considered to be acting as a “Group” if they are
owners of a corporation that enters into a merger, consolidation,
reorganization, purchase or acquisition of stock, or similar business
transaction, with WellCare, and (c) if a Person, including an entity, owns stock
both in WellCare and in a corporation that enters into a merger, consolidation,
reorganization, purchase or acquisition of stock, or similar transaction, with
WellCare, such Person shall be considered to be acting as a Group with other
shareholders only with respect to the ownership in such corporation prior to the
transaction.
3.1.5
Opportunity to
Cure. Notwithstanding Sections 3.1.2 and 3.1.3, it shall be a
condition precedent to a party’s right to terminate Executive’s employment for
Cause or Good Reason, as applicable, that (a) such party shall have first given
the other party written notice stating with reasonable specificity the breach on
which such termination is premised within ninety (90) days after the party
providing such notice becomes aware of such breach, and (b) if such breach is
susceptible of cure or remedy, such breach has not been cured or remedied within
forty-five (45) days after receipt of such notice.
3.1.6 Any Other
Reason. Notwithstanding anything to the contrary herein, the
Corporation shall have the right to terminate Executive’s employment under this
Agreement at any time without Cause by giving written notice of such termination
to Executive, and Executive shall have the right to terminate Executive’s
employment under this Agreement at any time without Good Reason by giving
written notice of such termination to the Corporation.
3.2 Termination
Date. Except as provided in Section 3.1.1 with respect to
Executive’s death or Disability, and subject to Section 3.1.5, any termination
under Section 3.1 shall be effective upon receipt of notice by Executive or the
Corporation, as the case may be, of such termination or upon such other later
date as may be provided herein or specified by the Corporation or Executive in
the notice (the “Termination
Date”).
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3.3 Effect of
Termination.
3.3.1 Termination with Cause or
without Good Reason. In the event that Executive’s employment
is terminated by the Corporation with Cause or by Executive without Good Reason,
the Corporation shall pay all Accrued Obligations to Executive in a lump sum in
cash within ten (10) days after the Termination Date. “Accrued Obligations” means the
sum of (a) Executive’s base salary hereunder through the Termination Date to the
extent not theretofore paid, (b) the amount of any incentive compensation,
deferred compensation and other cash compensation accrued by Executive as of the
Termination Date to the extent not theretofore paid, and (c) any vacation pay,
expense reimbursements and other cash entitlements accrued by Executive as of
the Termination Date to the extent not theretofore paid; provided, however, vacation pay
will not in any event be based on more than the maximum number of vacation days
that Executive may be entitled to in a single year.
3.3.2 Termination without Cause or
with Good Reason. In the event that Executive’s employment is
terminated by the Corporation without Cause or by the Executive with Good
Reason:
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(a)
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The
Corporation shall pay all Accrued Obligations to Executive in a lump sum
in cash within ten (10) days after the Termination
Date;
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(b)
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The
Corporation shall pay to Executive, no later than the Severance Payment
Deadline (as defined in Section 3.3.4) an amount equal to one (1) times
the Executive’s Annual Salary as in effect on the Termination Date, as
salary continuation, payable over a period of twelve (12) months in equal
installments per the Corporation’s regular payroll dates and procedures,
less deductions as required by law or authorized by the
Executive. The first installment shall be paid on the first
regular payroll date of the Company after the effective date of the
Release set forth in Section 3.3.4, and the last installment when the
entire amount is paid. To the extent any such payment is not
“deferred compensation” for purposes of Section 409A of the Code and the
regulations promulgated thereunder (“Section 409A”), then
such payment shall commence upon the first due date for such salary
continuation immediately after the date the release is executed and no
longer subject to revocation (the “Release Effective
Date”). The first such payment shall include payment of
all amounts that otherwise would have been due prior to the Release
Effective Date under the terms of this Agreement applied as though such
payments commenced immediately upon the Termination Date, and any payments
made thereafter shall
continue
as provided herein;
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(c)
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The
Corporation shall pay to Executive, in a lump sum in cash, on the one (1)
year anniversary of the Termination Date, and in any event, no later than
the Severance Payment Deadline, the average of the two (2) highest annual
cash bonuses earned by Executive for the three (3) prior years or, if
Executive has not been employed for three (3) years, the annual cash
target bonus for the year of the Termination Date;
and
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(d)
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For
a one (1) year period beginning on the Termination Date, the Corporation
shall reimburse Executive for the COBRA premiums above Executive’s
employee contribution in order to provide medical and dental insurance
benefits to Executive and/or Executive’s family at least equal to those
which were provided at the Termination Date; provided, further, that
Executive agrees to elect COBRA coverage to the extent available under the
Corporation’s health insurance plans. Any payment or
reimbursement under this Section 3.3.2(d) that is taxable to Executive or
any of his family members shall be made (subject to the provisions of such
health care plans that may require earlier payment) by December 31 of the
calendar year following the calendar year in which Executive or such
family member incurred the expense.
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“Annual Salary” shall mean
Executive’s highest annual salary over the 12 months prior to the Termination
Date.
3.3.3 Termination Due to Death or
Disability. In the event that Executive’s employment is
terminated due to Executive’s death or Disability the Corporation shall pay all
Accrued Obligations to Executive or Executive’s estate in a lump sum in cash
within ten (10) days after the Termination Date.
3.3.4 Waiver and Release
Agreement. In consideration of the severance payments and
other benefits described in clauses (b), (c) and (d) of Section 3.3.2, to which
severance payments and benefits Executive would not otherwise be entitled, and
as a precondition to Executive becoming entitled to such severance payments and
other benefits under this Agreement, Executive agrees to execute and deliver to
the Corporation within thirty (30) days after the applicable Termination Date a
Waiver and Release Agreement in the form attached hereto as Exhibit A without
alteration or addition other than to include the date (the “Release”). If
Executive fails to execute and deliver the Release Agreement within thirty (30)
days after the applicable Termination Date, or if Executive revokes such Release
as provided therein, the Corporation shall have no obligation to provide any of
the severance payments and other benefits described in clauses (b), (c) and (d)
of Section 3.3.2. The timing of severance payments under clause (b)
and (c) of Section 3.3.2 upon Executive’s execution and delivery of the Release
shall be further governed by the following provisions (the last date on which
such payments may be made, the “Severance Payment
Deadline”):
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(a)
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In
any case in which the Release (and the expiration of any revocation rights
provided therein) could only become effective in a particular tax year of
Executive, payments conditioned on execution of the release shall be made
by the end of the year in which the Release becomes effective and such
revocation rights have lapsed.
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(b)
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In
any case in which the Release (and the expiration of any revocation rights
provided therein) could become effective in one of two (2) taxable years
of Executive depending on when Executive executes and delivers the
Release, payments conditioned on execution of the Release shall be made by
the end of the year in which the Release becomes effective and such
revocation rights have lapsed, but not earlier than the first business day
of the later of such tax years.
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3.4 Required Delay For Certain
Deferred Compensation and Section 409A. In the event that any
compensation with respect to Executive’s termination is “deferred compensation”
within the meaning of Section 409A, the stock of WellCare, the Corporation or
any affiliate is publicly traded on an established securities market or
otherwise, and Executive is determined to be a “specified employee,” as defined
in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be
delayed as required by Section 409A. Such delay shall last six (6)
months from the date of Executive’s termination, except in the event of
Executive’s death. Within thirty (30) days following the end of such
six (6)-month period, or, if earlier, Executive’s death, the Corporation shall
make a catch-up payment to Executive equal to the total amount of such payments
that would have been made during the six (6)-month period but for this Section
3.4. Such catch-up payment shall bear simple interest at the prime
rate of interest as published by the Wall Street Journal’s
bank survey as of the first day of the six (6)-month period, which such interest
shall be paid with the catch-up payment. Wherever payments under this
Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section
409A. Notwithstanding any provision of this Agreement to the
contrary, for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits upon or following a termination of employment
that are considered deferred compensation under Section 409A, references to
Executive’s “termination of employment” (and corollary terms) with the
Corporation shall be construed to refer to Executive’s “separation from service”
(within the meaning of Treas. Reg. Section 1.409A-1(h)) with the
Corporation.
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3.5 Non-Exclusivity of
Rights. Nothing in this Agreement shall prevent or limit Executive’s
continuing or future participation in any plan, program, policy or practice
provided by the Corporation or its subsidiaries and for which Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as
Executive may have under any other contract or agreement with the Corporation or
its subsidiaries at or subsequent to the Termination Date, which shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement, except as explicitly modified by this Agreement.
3.6 No Set-Off or
Mitigation. The Corporation’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any setoff, counterclaim, recoupment,
defense, or other claim, right or action that the Corporation may have against
Executive or others, except to the extent of the mitigation and setoff
provisions provided for in this Agreement. In no event shall
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under any of the provisions of
this Agreement and such amounts shall not be reduced whether or not Executive
obtains other employment. The Corporation agrees to pay as incurred,
to the full extent permitted by law, all legal fees and expenses that Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Corporation, Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by
Executive about the amount of any payment pursuant to this Agreement), plus, in
each case, interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code.
ARTICLE
4
RESTRICTIVE
COVENANTS
4.1 Confidential Information and
Trade Secrets.
4.1.1 Obligation to Maintain
Confidentiality. Executive acknowledges that, by reason of
Executive’s employment by the Corporation, the Executive will have access to
trade secrets and other confidential, proprietary, and non-public information
concerning the business or affairs of WellCare, the Corporation, and their
respective subsidiaries (collectively, the “WellCare Companies”),
including but not limited to methods or systems of their operation or
management, any information regarding their financial matters, or any other
material information (including member, subscriber, and provider lists and
identifying information regarding members and subscribers) concerning the
business of the WellCare Companies, their manner of operation, or their plans or
other material data (collectively, “Confidential
Information”). Executive acknowledges that such trade secrets
and Confidential Information are valuable and unique assets of the WellCare
Companies and covenants that, both during and after the Term, Executive shall
not disclose any trade secrets or Confidential Information to any person or
entity (except as Executive’s duties as a director, officer or employee of
WellCare and the Corporation require) without the prior written authorization of
the Board. The obligation of confidentiality imposed by this Section
4.1 shall not apply to trade secrets or Confidential Information that otherwise
become known to the public through no act of Executive in breach of this
Agreement or which are required to be disclosed by court order, applicable law
or regulatory requirements, nor shall it apply to Executive’s disclosure of
trade secrets or Confidential Information to his attorneys and advisors in
connection with a dispute between Executive and a WellCare Company.
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4.1.2 WellCare Company
Property. All records, designs, business plans, financial
statements, customer lists, manuals, memoranda, lists, research and development
plans, Intellectual Property and other property delivered to or compiled by
Executive by or on behalf of any WellCare Company or its providers, clients or
customers that pertain to the business of any WellCare Company shall be and
remain the property of such WellCare Company and be subject at all times to its
discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities, research and development, Intellectual Property or future
plans of a WellCare Company that is collected by the Executive shall be
delivered promptly to such WellCare Company without request by it upon
termination of Executive’s employment. For purposes of this Section
4.1.2, “Intellectual
Property” shall mean patents, copyrights, trademarks, trade dress, trade
secrets, other such rights, and any applications therefor.
4.2 Inventions. Executive
is hereby retained in a capacity such that Executive’s responsibilities may
include the making of technical and managerial contributions of value to the
WellCare Companies. Executive hereby assigns to the applicable
WellCare Company all rights, title and interest in such contributions and
inventions made or conceived by Executive alone or jointly with others during
the Term that relate to the business of such WellCare Company. This
assignment shall include (a) the right to file and prosecute patent applications
on such inventions in any and all countries, (b) the patent applications filed
and patents issuing thereon, and (c) the right to obtain copyright, trademark or
trade name protection for any such work product. Executive shall
promptly and fully disclose all such contributions and inventions to the
Corporation and assist the Corporation or any other WellCare Company, as the
case may be, in obtaining and protecting the rights therein (including patents
thereon), in any and all countries; provided, however, that said
contributions and inventions shall be the property of the applicable WellCare
Company, whether or not patented or registered for copyright, trademark or trade
name protection, as the case may be. Notwithstanding the foregoing,
no WellCare Company shall have any right, title or interest in any work product
or copyrightable work developed outside of work hours and without the use of any
WellCare Company’s resources that does not relate to the business of any
WellCare Company and does not result from any work performed by Executive for
any WellCare Company.
4.3 Unfair
Competition.
4.3.1 Scope of
Covenant. Executive acknowledges that in the course of
employment with the Company, Executive has had
access to and gained knowledge of the trade secrets and other Confidential
Information of the WellCare Companies; has had substantial relationships with the
WellCare Companies’ customers; and has performed services of special, unique,
and extraordinary value to the WellCare Companies. Therefore, and in
consideration of the severance payments and other benefits described in clauses
(b), (c) and (d) of Section 3.3.2, to which severance payments and benefits
Executive would not otherwise be entitled, and as a precondition to Executive
becoming entitled to such severance payments and other benefits under this
Agreement, Executive agrees that notwithstanding any termination or non-renewal
of this Agreement, during any period Executive is employed by the Corporation
and for a period of one (1) year after termination of employment, Executive shall not,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person or entity, without the prior written consent of the
Board:
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(a)
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work
for, become employed by, or provide services to (whether as an employee,
consultant, independent contractor, officer, director, or board member)
any business that sells, markets, or provides any benefits or services
within any state in which a WellCare Company is doing business at the time
Executive ceases to be employed by the Corporation that are in direct
competition with the benefits or services provided by such WellCare
Company in such state, where Executive’s position or service for such
business is competitive with or otherwise similar to any of Executive’s
positions or services for the WellCare
Companies;
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(b)
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induce
or solicit any employee of any WellCare Company to leave the employ of
such WellCare Company, or recruit or hire any employee or
former employee of any WellCare Company, unless such former employee has
not been employed by the WellCare Group for a period in excess of six (6)
months; provided, however, that
the provisions of this clause (b) shall not apply to any member of
Executive’s immediate family;
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(c)
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call
upon any provider, customer, or agent of any WellCare Company about whom
Executive has gained Confidential Information or with whom Executive, by
virtue of his/her employment with the Corporation, has established a
relationship or had frequent contact, for the purpose of
soliciting or selling benefits or services similar to those benefits or
services that the provider, customer, or agent provides to or purchases
from the WellCare Companies; provided however, that the provisions of this
clause (c) only apply
to those persons or entities who are providers, customers, or agents of
any WellCare Company at the time Executive ceases to be employed by the
Corporation or who were providers, customers, or agents of any WellCare
Company during the one-year period prior to the date Executive ceases to
be employed by the Corporation;
or
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(d)
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induce,
solicit, request, or advise any provider, customer, or agent of any
WellCare Company about whom Executive has gained Confidential Information
or with whom Executive, by virtue of his/her employment with the
Corporation, has established a relationship or had frequent contact, to
withdraw, curtail, or cancel its business dealings with such WellCare
Company;
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provided, however, that nothing
in this Section 4.3.1 shall be construed to preclude Executive from making any
investment in the securities of any business enterprise whether or not engaged
in competition with any WellCare Company, to the extent that such securities are
actively traded on a national securities exchange or in the over-the-counter
market in the United States or on any foreign securities exchange, but only if
such investment does not exceed two percent (2%) of the outstanding voting
securities of such enterprise, provided that such permitted activity shall not
relieve the Executive from any other provisions of this Agreement.
4.3.2 Nondisparagement. Executive
agrees that he will not talk about or otherwise communicate to any third parties
in a malicious, disparaging, or defamatory manner regarding any WellCare
Company, and will not make or authorize to be made any written or oral statement
that may disparage or damage the reputation of the WellCare Companies or their
past or present employees, officers or other representatives.
4.3.3 Reasonableness. It
is agreed by the parties that the foregoing covenants in this Section 4.3 impose
a reasonable restraint on Executive in light of the activities and business of
the WellCare Companies. Executive acknowledges that the covenants in
this Section 4.3 shall not prevent Executive from earning a livelihood upon the
termination of employment hereunder, but merely prevent unfair competition with
the WellCare Companies for a limited period of time.
4.3.4 Severability. The
covenants in this Section 4.3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant or of any other provision of this Agreement. In the
event any court of competent jurisdiction shall determine that any provision of
this Section 4.3 is invalid, illegal, or unenforceable, then it is the intention
of the parties that such restrictions be enforced to the fullest extent that
such court deems reasonable, and this Agreement shall thereby be
reformed.
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4.3.5 Enforcement by the
Corporation not Limited. All of the covenants in this Section
4.3 shall be construed as an agreement independent of any other provision in
this Agreement, and the existence of any claim or cause of action of Executive
against any WellCare Company, whether predicated in this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Corporation or WellCare
of such covenants.
4.4 Breach of Restrictive
Covenants. The parties agree that a breach or violation of
this Article 4 will result in immediate and irreparable injury and harm to the
innocent party, and that the WellCare Companies shall have, in addition to any
and all remedies of law and other consequences under this Agreement, the right
to seek a temporary, preliminary, or permanent injunction, specific performance,
or other equitable relief to enforce the obligations hereunder or prevent the
violation of the obligations hereunder. In addition, in the event of
an alleged breach or violation by Executive of the obligations in Section 4.3,
the one-year period shall be tolled until such breach or violation has been
cured.
ARTICLE
5
ARBITRATION
5.1 General. Except
for an action for equitable relief that is permitted to be sought pursuant to
Section 4.4, any
controversy, dispute, or claim between the parties to this Agreement, including
any claim arising out of, in connection with, or in relation to the formation,
interpretation, performance or breach of this Agreement shall be settled
exclusively by arbitration, before a single arbitrator, in accordance with this
Article 5 and the then most applicable rules of the American Arbitration
Association. Judgment upon any award rendered by the arbitrator may
be entered by any state or federal court having jurisdiction
thereof. Such arbitration shall be administered by the American
Arbitration Association. Arbitration shall be the exclusive remedy
for determining any such dispute, regardless of its
nature. Notwithstanding the foregoing, either party may in an
appropriate matter apply to a court for provisional relief, including a
temporary restraining order or a preliminary injunction, on the ground that the
award to which the applicant may be entitled in arbitration may be rendered
ineffectual without provisional relief. Unless mutually agreed by the
parties otherwise, any arbitration shall take place in Tampa,
Florida.
5.2 Selection of
Arbitrator. In the event the parties are unable to agree upon
an arbitrator, the parties shall select a single arbitrator from a list of nine
arbitrators drawn by the parties at random from the “Independent” (or “Gold
Card”) list of retired judges or, at the option of Executive, from a list of
nine persons (which shall be retired judges or corporate or litigation attorneys
experienced in executive employment agreements) provided by the office of the
American Arbitration Association having jurisdiction over Tampa,
Florida. If the parties are unable to agree upon an arbitrator from
the list so drawn, then the parties shall each strike names alternately from the
list, with the first to strike being determined by lot. After each
party has used four strikes, the remaining name on the list shall be the
arbitrator. If such person is unable to serve for any reason, the
parties shall repeat this process until an arbitrator is selected.
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5.3 Applicability of
Arbitration; Remedial Authority. This agreement to resolve any
disputes by binding arbitration shall extend to claims against any parent,
subsidiary or affiliate of each party, and, when acting within such capacity,
any officer, director, stockholder, employee or agent of each party, or of any
of the above, and shall apply as well to claims arising out of state and federal
statutes and local ordinances as well as to claims arising under the common
law. In the event of a dispute subject to this paragraph the parties
shall be entitled to reasonable discovery subject to the discretion of the
arbitrator. The remedial authority of the arbitrator (which shall
include the right to grant injunctive or other equitable relief) shall be the
same as, but no greater than, would be the remedial power of a court having
jurisdiction over the parties and their dispute. The arbitrator
shall, upon an appropriate motion, dismiss any claim without an evidentiary
hearing if the party bringing the motion establishes that he or it would be
entitled to summary judgment if the matter had been pursued in court
litigation. In the event of a conflict between the applicable rules
of the American Arbitration Association and these procedures, the provisions of
these procedures shall govern.
5.4 Fees and
Costs. Any filing or administrative fees shall be borne
initially by the party requesting arbitration. The Corporation shall
be responsible for the costs and fees of the
arbitration. Notwithstanding the foregoing, the prevailing party in
such arbitration, as determined by the arbitrator, and in any enforcement or
other court proceedings, shall be entitled, to the extent permitted by law, to
reimbursement from the other party for all of the prevailing party’s costs
(including but not limited to the arbitrator’s compensation), expenses, and
attorneys’ fees, subject to the requirement that such costs, expenses and
attorneys’ fees are reasonable, as determined by the arbitrator.
5.5 Award Final and
Binding. The arbitrator shall render an award and written
opinion, and the award shall be final and binding upon the
parties. If any of the provisions of this paragraph, or of this
Agreement, are determined to be unlawful or otherwise unenforceable, in whole or
in part, such determination shall not affect the validity of the remainder of
this Agreement, and this Agreement shall be reformed to the extent necessary to
carry out its provisions to the greatest extent possible and to insure that the
resolution of all conflicts between the parties, including those arising out of
statutory claims, shall be resolved by neutral, binding
arbitration. If a court should find that the arbitration provisions
of this Agreement are not absolutely binding, then the parties intend any
arbitration decision and award to be fully admissible in evidence in any
subsequent action, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law.
ARTICLE
6
MISCELLANEOUS
6.1 Amendments. The
provisions of this Agreement may not be waived, altered, amended or repealed in
whole or in part except by the signed written consent of the parties sought to
be bound by such waiver, alteration, amendment or repeal.
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6.2 Entire
Agreement. This Agreement, the Indemnification Agreement, any
agreements pertaining to restricted stock and options and any agreements
pertaining to any other equity awards granted to Executive constitute the total
and complete agreement of the parties with respect to the subject matter hereof
and thereof and supersede all prior and contemporaneous understandings and
agreements heretofore made, and there are no other representations,
understandings or agreements.
6.3 Counterparts. This
Agreement may be executed in one of more counterparts, each of which shall be
deemed and original, but all of which shall together constitute one and the same
instrument.
6.4 Severability. Each
term, covenant, condition or provision of this Agreement shall be viewed as
separate and distinct, and in the event that any such term, covenant, condition
or provision shall be deemed by an arbitrator or a court of competent
jurisdiction to be invalid or unenforceable, the court or arbitrator finding
such invalidity or unenforceability shall modify or reform this Agreement to
give as much effect as possible to the terms and provisions of this
Agreement. Any term or provision which cannot be so modified or
reformed shall be deleted and the remaining terms and provisions shall continue
in full force and effect.
6.5 Waiver or
Delay. The failure or delay on the part of the Corporation or
Executive to exercise any right or remedy, power or privilege hereunder shall
not operate as a waiver thereof. A waiver, to be effective, must be
in writing and signed by the party making the waiver. A written
waiver of default shall not operate as a waiver of any other default or of the
same type of default on a future occasion.
6.6 Successors and
Assigns. This Agreement shall be binding on and shall inure to
the benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns, except as otherwise provided
herein. Neither this Agreement nor any of the rights, benefits,
obligations or duties hereunder may be assigned or transferred by Executive
except by operation of law. Without the prior written consent of
Executive, this Agreement shall not be assigned by the
Corporation. The Corporation shall require any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such succession
had taken place.
6.7 Necessary
Acts. Each party to this Agreement shall perform any further
acts and execute and deliver any additional agreements, assignments or documents
that may be reasonably necessary to carry out the provisions or to effectuate
the purpose of this Agreement.
6.8 Governing
Law. This Agreement shall be governed by and interpreted,
construed and enforced in accordance with the laws of the State of
Delaware.
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6.9 Notices. All
notices, requests, demands and other communications to be given under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service, if personally served on the party to whom notice is to be
given, or 48 hours after mailing, if mailed to the party to whom notice is to be
given by certified or registered mail, return receipt requested, postage
prepaid, and properly addressed to the party at his address set forth as follows
or any other address that any party may designate by written notice to the other
parties:
| To Executive: |
Xxxx
Xxxxxx
Address on file with the Corporation
|
|||
|
To
WellCare or the Corporation:
|
|
|||
|
|
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx Xxx
Xxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
|
6.10 Headings and
Captions. The headings and captions used herein are solely for
the purpose of reference only and are not to be considered as construing or
interpreting the provisions of this Agreement.
6.11 Construction. All
terms and definitions contained herein shall be construed in such a manner that
shall give effect to the fullest extent possible to the express or implied
intent of the parties hereby.
6.12 Counsel. Executive
has been advised by WellCare and the Corporation that he should consider seeking
the advice of counsel in connection with the execution of this Agreement and the
other agreements contemplated hereby and Executive has had an opportunity to do
so. Executive has read and understands this Agreement, and has sought
the advice of counsel to the extent he has determined appropriate.
6.13 Withholding of
Compensation. Executive hereby agrees that the Corporation may
deduct and withhold from the compensation or other amounts payable to Executive
hereunder or otherwise in connection with Executive’s employment any amounts
required to be deducted and withheld by the Corporation under the provisions of
any applicable Federal, state and local statute, law, regulation, ordinance or
order.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
WELLCARE
By: /s/ Xxxxx
X. Xxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxx
Title:
President and Chief Executive Officer
CORPORATION
COMPREHENSIVE
HEALTH MANAGEMENT, INC.
By: /s/ Xxxxx
X. Xxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxx
Title:
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxx
Xxxxxx
Xxxx
Xxxxxx
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