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EXHIBIT 10.35
AGREEMENT AND RELEASE
This Agreement and Release is made as of the 29th day of May, 1998, by
and between Xxxxxx X. Xxxxx ("Employee"), Coventry Corporation, a Tennessee
corporation, ("Coventry") and HealthAmerica Pennsylvania, Inc., a Pennsylvania
corporation with its principal place of business at 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Employer"), relating to termination of
Employee's employment with Employer.
WHEREAS, the Employee voluntarily resigned from his position with
Employer effective as of May 1, 1998. Employer and Employee desire to enter into
a full and final settlement of all matters between them arising out of
Employee's employment and the termination thereof.
NOW, THEREFORE, in consideration of the terms, conditions, mutual
promises, and covenants herein contained, the sufficiency of which is
acknowledged by the signatures of the parties hereto, Employee and Employer
agree as follows:
1. TERMINATION
Effective May 1, 1998, Employee's employment with Employer in any and
all capacities automatically terminated (the "Termination Date") and Employee
resigned all positions held as an officer or director of Employer or any of its
subsidiaries or affiliates as of the Termination Date. Employee has turned over
to Employer all property of Employer and any of its affiliates or subsidiaries
in Employee's possession, including but not limited to all keys, business cards,
files, documents and records (and any copies thereof), information, memberships,
credit cards, computer hardware and software, and portable telephones, if any,
on the Termination Date.
2. SEVERANCE COMPENSATION
Notwithstanding Employee's termination, Employer shall provide Employee
with certain severance compensation commencing on the Termination Date and
continuing for a period of fifteen months through July 31, 1999 (the "Severance
Period"), as follows:
(i) continued payment during the Severance Period of that portion of
Employee's full base salary in effect at the Date of Termination
(annualized at $250,000), subject to legal withholds and
deductions, in such equal installments as are consistent with
Employer's customary salary payment practices, and subject to an
offset for relocation expenses; and
(ii) continued coverage under all Welfare Plans (as that term is
defined in that certain Employment Agreement entered into
effective as of January 24, 1997, and amended as of March 12,
1997, between Employee and Employer (the "Employment Agreement")
maintained by Employer in which Employee or his spouse or family
were participating immediately prior to the Termination Date.
If, however, Employee obtains other coverage through his spouse
or obtains employment with another employer during the Severance
Period, Employer's coverage shall be provided until the earlier
of: (i) the end of the Severance Period or (ii) the date on
which the Employee and his spouse and family can be covered
under the plans of his spouse or a new employer without being
excluded from full coverage because of any actual pre-existing
condition.
Executive's eligibility for, and the Employer match to, the
401(k) Plan (the "401(k) Plan"), the Supplemental Executive
Retirement Plan (the "SERP") and/or any other retirement savings
program in which the Employee participates shall end at
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the Termination Date. Employee's balances in the SERP shall be
distributed to him as soon as practicable, less tax
withholdings, in accordance with the terms of the SERP.
3. STOCK OPTIONS
Notwithstanding anything to the contrary contained in any prior
agreements, either oral or written, between the parties or in any stock option
plan of Coventry, the parties hereby agree that Employee is fully vested in the
following options for shares of Common Stock of Coventry Health Care, Inc.
(formerly Coventry Corporation):
No. of Options
Date of Grant Exercise Price Exercisable
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2/10/97 $ 7.3125 33,333
3/27/97 $11.6250 12,500
4/14/97 $11.1250 12,500
In addition, on February 10, 1999, Employee shall be deemed to vest in
the next increment of stock options representing 33,333 shares of Common Stock
of Coventry Health Care, Inc. Employee shall have the right to exercise his
stock options, to the extent vested, at any time during the Severance Period.
4. CONFIDENTIALITY
At all times hereafter, Employee will not, directly or indirectly,
reveal, communicate or divulge the contents of this Agreement or any
information, knowledge, data, records or documents to any person, firm,
corporation or entity which relate to the confidential business of Employer or
its affiliates, including but not limited to, any strategic plans, customer
lists, contract terms, financial information, pricing terms, sales data or
business opportunities, trade secrets, modes of operation, product information,
member and Employer subscriber lists, names of firms or services, information
regarding prospective, existing and former member and Employer subscribers,
providers and employees, and all business and other records of Employer or its
affiliates; provided, however, that the foregoing shall not apply to information
which is generally known to the public or appears as a matter of public record
or matters as to which disclosure is required by law or appropriate judicial or
investigative proceeding.
5. RELEASES
In further consideration of the severance compensation provided for in
Section 2, above, Employee hereby agrees, on behalf of himself and his
administrators, heirs, assigns and anyone claiming through him, to completely
release and forever discharge Employer and its officers, directors,
subsidiaries, Affiliates, agents, servants, representatives, underwriters,
successors, heirs and assigns, and Employer on its behalf and behalf of its
subsidiaries agrees to completely release and discharge Employee, from any and
all claims, demands, obligations, or causes of action of any nature whatsoever,
whether known or unknown, which either of them ever had, or in the future may
have, arising out of or in any way connected with the Employee's employment with
Employer and the termination thereof provided for hereunder, including, but not
limited to, any claim relating to violation of any federal or state statute or
regulation, any claim for wrongful discharge or breach of contract, or any claim
relating to the state or federal employment laws (including, but not limited to,
the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act, the Employee Retirement Income Security Act, the Older
Workers' Benefit Protection Act, and the Rehabilitation Act); provided, however,
that nothing herein shall be construed as a release of any of either party's
obligations hereunder or under the applicable terms of the Employment Agreement
not otherwise amended herein.
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Employee expressly acknowledges that he was advised to consult with an attorney
prior to signing this Agreement and acknowledges that he has been given a period
of at least twenty-one (21) days in which to consider this Agreement, which
period by his signature hereto he expressly waives.
Employee understands and agrees that if he breaches this release or files any
claim, charge or lawsuit seeking payment of any money or benefits in excess of
the payments provided under this Agreement or seeking any equitable relief,
Employer may discontinue the payment of any amount payable hereunder and be
entitled to recover any amount already paid hereunder.
6. REVOCATION PERIOD
The parties herein expressly agree that for a period of seven (7) days
following the date of Employee's execution of this Agreement, Employee may
revoke this Agreement. The Agreement shall not become effective or enforceable
until such revocation period has expired. Should Employee elect to revoke this
Agreement pursuant to this paragraph, written notice of such revocation must be
received at Employer's corporate offices no later than the close of business on
the final day of the revocation period.
7. THIRD PARTY COMMUNICATIONS
In consideration of the mutual promises and covenants contained herein,
each of the parties expressly agrees that they will not make statements to or
initiate or participate in discussions with any other person which are
derogatory, disparaging or injurious to the reputation of Employee or of
Employer or any of its affiliates or which in any way characterize Employee or
Employer or any of its affiliates in an unfavorable light. This provision shall
in no way be construed to prohibit either party from responding truthfully to
any question or interrogatory which such party is required to answer in
connection with any court or other legal proceeding.
8. MISCELLANEOUS
EFFECT OF THIS AGREEMENT: With the exception of applicable provisions of
the Employment Agreement not revised by this Agreement, this Agreement
supersedes any other agreement, express or implied, between the parties as to
the matters herein. To the extent any inconsistencies exist between this
Agreement and any earlier employment agreements executed by Employee and
Employer, including the Employment Agreement, the terms and conditions of this
Agreement will supersede and control.
BINDING NATURE OF AGREEMENT: This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, trustees,
administrators, successors and assigns.
SEVERABILITY: If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is unenforceable, and in all other
respects this Agreement shall remain in full force and effect; provided,
however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be
enforceable to the maximum extent permitted by applicable law.
ENTIRE AGREEMENT: This Agreement represents the entire and final
Agreement between the parties regarding the subject matter of Employee's
employment with Employer and the termination thereof. All prior negotiations,
understandings, conversations, and communications, if any, are merged into this
Agreement and have no force and effect other than as expressed in the body
hereof.
GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the state of Pennsylvania.
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AMENDMENTS: This Agreement may not be modified, amended, or waived
without the express prior written consent of all parties hereto.
FREE ACTS: The parties have relied solely upon their own judgment and
the advice of their own counsel in making this Agreement. Employee acknowledges
that he has read and fully understands the Agreement and has executed the same
under his own free act and will.
CAPTIONS: The captions appearing in this Agreement are inserted only as
a matter of convenience and in no way define, limit, construe, or describe the
scope or intent of such paragraphs.
IN WITNESS WHEREOF, the parties have executed this Agreement and Release
as of the day and year first above written.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
COVENTRY CORPORATION
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President and Chief Executive Officer
HEALTHAMERICA PENNSYLVANIA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
President and Chief Executive Officer
