Exhibit 10.1
Execution Copy
SEVERANCE AND CONSULTING AGREEMENT
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This Severance and Consulting Agreement (the "Agreement") is entered into
and, subject to paragraph 11 hereof, shall be effective as of the 15th day of
August, 2007 by and between LHC Group, Inc. ("Company") and Xxxxx X. Xxxxxxx
("Xxxxxxx").
WHEREAS, Xxxxxxx is currently employed by Company as Executive Vice
President and Chief Financial Officer ("CFO") pursuant to an Employment
Agreement dated June 1, 2006 (the "Employment Agreement"); and
WHEREAS, Xxxxxxx desires to voluntarily resign his employment with Company
while maintaining a consulting relationship with Company; and
WHEREAS, Company has accepted Xxxxxxx'x voluntary resignation and has
agreed to provide severance benefits to Xxxxxxx, which the parties agree are
above and beyond what Xxxxxxx would be entitled to under his Employment
Agreement in the event of a voluntary resignation; and
WHEREAS, the parties to this Agreement desire to resolve all issues between
them relating to Xxxxxxx'x employment and the resignation of that employment;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Company and Xxxxxxx agree as follows:
1. Termination of Employment.
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Xxxxxxx'x last day of employment, and the termination date of the
Employment Agreement, shall be August 15, 2007 (the "Resignation Date"). Xxxxxxx
acknowledges and agrees that Company has met all of its obligations under all
agreements with Xxxxxxx governing his employment and/or compensation or
benefits, including but not limited to the Employment Agreement. The parties
agree that, except for the payments described in Paragraph 2 below, Company
shall owe no additional amounts to Xxxxxxx for wages, commissions, back pay,
severance pay, bonuses, retirement benefits, stock awards, stock options, change
of control payments, accrued vacation, benefits, insurance, sick leave, other
leave, or any other reason after the Resignation Date.
2. Severance and Consulting Benefits.
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(a) In consideration of Xxxxxxx'x promises herein, including but not
limited to the release and covenant not to xxx contained in Paragraph 3 of this
Agreement and the performance of consulting services, Company agrees to pay
Xxxxxxx the amount of One Million Seventy Two Thousand Seven Hundred Five
Dollars ($1,072,705) (the "Separation Pay"). This Separation Pay shall be paid
out in twenty-four (24) equal monthly installments (the "Severance Period") in
accordance with Company's normal payroll practices and shall be subject to all
applicable federal, state and local tax withholdings. The first payment shall be
made on September 1, 2007.
(b) The parties acknowledge and agree that the above payments and
agreements have been negotiated and agreed upon voluntarily by both parties. The
parties also acknowledge and agree that these amounts exceed any and all pay and
benefits to which Xxxxxxx already may have been entitled by contract or law, or
for any other reason in the event of a voluntary resignation, and that they
constitute good, valuable and sufficient consideration for Xxxxxxx'x covenants
and agreements contained in this Agreement.
(c) As of the Resignation Date, Xxxxxxx owns 2,000 shares of the
Company's outstanding $0.01 par value common stock that was granted under either
the Company's 2005 Long-Term Incentive Plan (the "LTIP") or the Company's 2003
Key Employee Equity Participation Plan and which is fully vested (the "Vested
Shares"). The Vested Shares shall remain outstanding and shall continue to be
held by Xxxxxxx following the Resignation Date. As of the Resignation Date,
Xxxxxxx owns 33,000 shares of unvested restricted stock that was granted under
the LTIP (the "Unvested Shares"). As of the Resignation Date, the Unvested
Shares shall be forfeited by Xxxxxxx and shall no longer remain outstanding.
Xxxxxxx shall have no further rights with respect to the Unvested Shares.
3. Release Of All Claims And Potential Claims Against Company and
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Covenant Not To Xxx.
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In consideration of the payments made to him by Company and the other
covenants and promises contained in this Agreement, Xxxxxxx, with the intention
of binding himself and all of his heirs, executors, administrators and assigns,
does hereby release, remise, acquit and forever discharge Company and all of its
past and present officers, directors, stockholders, employees, agents, parent
corporations, predecessors, subsidiaries, affiliates, estates, successors,
assigns, partners and attorneys (hereinafter "Releasees") from any and all
claims, charges, actions, causes of action, sums of money due, suits, debts,
covenants, contracts, agreements, rights, damages, promises, demands or
liabilities (hereinafter collectively referred to as "Claims") whatsoever, in
law or in equity, whether known or unknown, suspected or unsuspected, which
Xxxxxxx, individually or as a member of any class, now has, owns or holds or has
at any time heretofore ever had, owned or held against Company or any of the
Releasees, including but not limited to those Claims arising out of or in any
way connected with Xxxxxxx'x employment with Company or any of the other
Releasees or the termination of any such employment relationship. This release
and covenant not to xxx includes, but is not limited to, claims for infliction
of emotional distress, claims for defamation, claims for personal injury of any
kind, claims for breach of contract, claims for harassment and claims arising
under federal, state or local laws prohibiting employment discrimination and
claims growing out of any legal restrictions on Company's rights to terminate
its employees or to take any other employment action, whether statutory,
contractual or arising under common law or case law. Xxxxxxx specifically
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acknowledges and agrees that his release and covenant not to xxx includes, but
is not limited to, any and all rights under federal and state employment laws
including without limitation the Age Discrimination in Employment Act of 1967
("ADEA"), as amended, 29 U.S.C. ss. 621, et seq., the Civil Rights Act of 1964
("Title VII"), as amended (including amendments made through the Civil Rights
Act of 1991), 42 U.S.C. ss. 2000e, et seq., 42 U.S.C. ss. 1981, as amended, the
Americans With Disabilities Act ("ADA"), as amended, 42 U.S.C. ss. 12101, et
seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. ss. 701, et seq.,
the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29
U.S.C. ss. 301, et seq., the Worker Adjustment and Retraining Notification Act,
29 U.S.C. ss. 2101, et seq., the Family and Medical Leave Act of 1993 ("FMLA"),
as amended, 29 U.S.C. ss. 2601 et seq., the Fair Labor Standards Act ("FLSA"),
as amended, 29 U.S.C. ss. 201 et seq. the Employee Polygraph Protection Act of
1988, 29 U.S.C. ss. 2001, et seq., and all state and federal workers'
compensation laws. Xxxxxxx warrants that he has not filed any type of claim
against Company.
4. Non-Admission of Liability.
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Xxxxxxx and Company agree that this Agreement shall not in any way be
construed or interpreted as an admission of liability or wrongdoing by Company
or Xxxxxxx, any such liability or wrongdoing being expressly denied.
5. Nondisparagement.
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Xxxxxxx agrees and covenants that he will not make any derogatory or
disparaging statements about or relating to Company, its business practices, its
products or its employment practices. Company agrees to provide the letters of
reference attached hereto as Exhibits A and B and further agrees that neither
Xxxxx Xxxxx, Xxxx Xxxxxx nor any Vice President or Director of the Company will
make any derogatory or disparaging statements about or relating to Xxxxxxx.
6. Return of Materials.
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Xxxxxxx agrees to return all documents, materials, equipment, keys,
Company credit cards, financial information, customer information, Trade Secrets
(as defined by applicable state or federal law), sales information, contracts,
order information, customer contact information, correspondence relating to
Company, a customer or any Releasee, computer data and other material and
information relating to Company, any of the Releasees or Company's business and
not to retain or provide to anyone else any copies thereof. By executing this
Agreement, Xxxxxxx warrants and agrees that he shall return all such information
and material to the Company no later than 5 p.m. on August 15, 2007.
Notwithstanding the foregoing, Xxxxxxx shall maintain his Company issued
"Blackberry" or similar device until September 1, 2007 in order to assist with
transition issues.
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7. Consulting Services.
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(a) During the Severance Period, Xxxxxxx agrees to provide consulting
services to Company on an as needed basis. The timing and scope of work shall be
agreed upon by Company and Xxxxxxx. If Xxxxxxx is unable to perform any single
project due to time restrains resulting from his other business endeavors, the
failure to perform such single project shall not be considered a breach of this
Agreement; provided, that if Xxxxxxx fails or refuses to perform projects on a
consistent basis that shall give the Company grounds to claim a breach of this
Agreement. In carrying out such consulting services, Xxxxxxx shall determine his
own hours and days and methods of work, but shall meet all deadlines set by
Company. Consultant shall be responsible for using his discretion, experience
and knowledge to accomplish his tasks in a timely fashion and to the best of his
ability. Company will reimburse Xxxxxxx for reasonable business expenses
directly related to Xxxxxxx'x performance of consulting services under this
Agreement, provided that (1) Company approves such expenses in advance; and (2)
Xxxxxxx submits accurate reports and receipts documenting such expenses. Xxxxxxx
understands that, during the Severance Period, he is not eligible for any
benefit that Company provides to its employees, including but not limited to
life, disability, dental, vision and medical insurance; vacation and sick pay;
and pension or retirement plans or benefits; outside of normal "COBRA" benefits
accorded to all prior employees; provided, that Company shall not be obligated
to pay any COBRA premiums nor shall the COBRA period be extended as a result of
this consulting relationship.
(b) During the Severance Period, Xxxxxxx may be provided with access
to certain Confidential Information (which Company shall designate as
confidential) pertaining to Company and its business operations that is not
generally known to persons not employed by Company and that is not generally
disclosed by Company practice or authority to persons not employed by Company.
Accordingly, during the Severance Period and for a period of one (1) year
thereafter, Xxxxxxx shall not directly or indirectly transmit or disclose any
Confidential Information to any person, concern or entity, or make use of any
use of any such Confidential Information, directly or indirectly, for herself or
for others, without the prior written consent of Company.
8. Restrictive Covenants.
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Xxxxxxx acknowledges and agrees that the Restrictive Covenants set
forth in Paragraph 14 of the Employment Agreement shall remain in full force and
effect during the Severance Period. Xxxxxxx further acknowledges and agrees
that, if he violates any of the Restrictive Covenants, Company shall be entitled
to all of the relief and remedies set forth in Paragraph 14 of the Employment
Agreement and, if he materially breaches any of the Restrictive Covenants,
Company shall also be entitled to terminate monthly payment of the Separation
Pay set forth in Paragraph 2 above.
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9. Confidentiality of this Agreement.
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The provisions of this Agreement shall be held in strictest
confidence by Xxxxxxx and Xxxxxxx shall not publicize or disclose the terms of
this Agreement, including any communications leading up to the execution of this
Agreement, in any manner whatsoever; provided, however, that Xxxxxxx may
disclose the terms of this Agreement: (a) to Xxxxxxx'x immediate family; (b) to
Xxxxxxx'x attorney, accountant, and financial advisor; and (c) as required by
order of a court of competent jurisdiction or as otherwise required by law;
provided, further, the parties acknowledge that this Agreement shall be filed by
the Company with the Securities and Exchange Commission (the "SEC") and the
Company will be permitted to discuss the express terms of this Agreement,
including, without limitation, the financial terms thereof, in its periodic
filings with the SEC and will be permitted to discuss the express terms of this
Agreement to the extent reasonably necessary. If Xxxxxxx is requested by the SEC
to discuss the terms of this Agreement, he shall be permitted to do so;
provided, Xxxxxxx must first provide notice of such request to Company and shall
keep Company informed of the substance of all such discussions and shall provide
copies of all correspondence related thereto to Company.
10. Acknowledgment.
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Company hereby advises Xxxxxxx to consult with an attorney prior to
executing this Agreement. Xxxxxxx expressly acknowledges and agrees that he has
read this Agreement carefully, that he has had ample time and opportunity to
consult with an attorney or other advisor of his choosing concerning his
execution of this Agreement, that Company has advised him, and hereby does
advise him, of his opportunity to consult an attorney or other advisor and has
not in any way discouraged him from doing so, that he fully understands that
this Agreement is final and binding, that this Agreement contains a release of
potentially valuable claims, and that the only promises or representations he
has relied upon in signing this Agreement are those specifically contained in
the Agreement itself. Xxxxxxx also acknowledges and agrees that he has been
offered at least twenty-one (21) days to consider this Agreement before signing
and that he is signing this Agreement voluntarily, after consulting with his
attorney, with the full intent of releasing Company from all claims.
11. Effective Date and Revocation.
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This Agreement shall become effective and enforceable at five o'clock
(5:00) Central Standard Time on the eighth (8th) day immediately following the
date of execution of this Agreement and the parties agree that Xxxxxxx may
revoke the Agreement at will prior to that time by giving written notice of the
revocation to Company. Such notice must be delivered to Xxxxx Xxxxx, President
and Chief Executive Officer, before the above-mentioned eighth-day deadline.
Xxxxxxx agrees that, if he revokes the Agreement prior to that time, he will
return to Company any and all payments already received pursuant to this
Agreement. The Agreement may not be revoked after expiration of the
above-described revocation period and, if after such time, Xxxxxxx attempts to
rescind, revoke or annul this Agreement or if he attempts at any time to make,
assert or prosecute any claim(s) covered by the release contained in Paragraph 3
above, he will, prior to filing or instituting such claim(s), return to Company
any all payments already received by him under this Agreement, plus a reasonable
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rate of interest, and, if Company prevails in defending the enforceability of
any portion of the Agreement or in defending itself against any such claim
brought by Xxxxxxx, he will pay Company `s attorney's fees and costs incurred in
defending itself against the claim(s) and/or the attempted revocation, recission
or annulment; provided, however, that Xxxxxxx shall not be required to repay the
monies paid to him under the terms of this Agreement or pay Company all of its
attorneys' fees and costs incurred in its defense of Xxxxxxx'x action (except
those attorneys' fees or costs specifically authorized under federal or state
law) in the event that Xxxxxxx seeks to challenge his waiver of claims under the
ADEA. If after the date set forth in the first sentence of this paragraph 11
Company attempts to rescind, revoke or annul this Agreement, and, if Xxxxxxx
prevails in defending the enforceability of this Agreement, Company will pay
Xxxxxxx'x attorney's fees and costs incurred in defending himself against the
attempted revocation, recission or annulment. Nothing in this Agreement shall
limit Company's rights to seek and obtain other remedies for breach of this
Agreement.
12. Governing Law.
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This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware.
13. Voluntary and Knowing Execution.
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The parties to this Agreement certify that they have read this
Agreement in its entirety and fully understand its contents and effect. Each of
the parties to this Agreement acknowledges that this Agreement is made and
executed by and of their own free will. The parties recognize that this
Agreement is a full, final and complete release of all claims.
14. Authority.
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Xxxxxxx and Company represent and warrant each to the other that (i)
each has all requisite power and authority to enter into this Agreement, and
(ii) this Agreement has been duly authorized, executed and delivered by each of
them and constitutes a legal, valid and binding obligation of each of them,
enforceable against each of them in accordance with its terms.
15. Counterparts.
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The parties agree that this Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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16. Severability.
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With the exception of the release contained in Paragraph 3 above, if
any provision of this Agreement is unenforceable or is held to be unenforceable,
such provision shall be fully severable, and this Agreement and its terms shall
be construed and enforced as if such unenforceable provision had never comprised
a part hereof, the remaining provisions hereof shall remain in full force and
effect, and the court construing the provisions shall add as a part hereof a
provision as similar in terms and effect to such unenforceable provision as may
be enforceable in lieu of the unforceable provision. In the event that the
release contained in Paragraph 3 above is unenforceable or is held to be
unforceable, the parties understand and agree that the remaining provisions of
the Agreement shall be rendered null and void and that neither party shall have
any further obligation under any provision of this Agreement.
17. Entire Agreement.
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Except as otherwise provided in this Agreement, the parties hereto
acknowledge and agree that this Agreement contains the entire agreement between
Xxxxxxx and Company with respect to the subject matter hereof and that it
supersedes and invalidates any previous agreements or contracts to the contrary,
including but not limited to the Employment Agreement. No representations,
inducements, promises or agreements, oral or otherwise, which are not embodied
herein shall be of any force or effect. Nothwithstanding the foregoing, nothing
contained in this Agreement shall invalidate or otherwise impair the
enforceability of the Restrictive Covenants set forth in Paragraph 14 of the
Employment Agreement, which shall remain in full force and effect.
[SIGNATURES ON FOLLOWING PAGE]
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The parties hereby agree to all of the above terms and signify their
agreement by their signatures below.
XXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxxx
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DATE: August 15, 2007
LHC GROUP, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
DATE: August 15, 2007
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