Exhibit 10.1
CONFIDENTIAL
April 27, 2004
Xxxxxxx X. Xxxxx
00 Xxxxxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Re: Separation from Employment
Dear Xx. Xxxxx:
This letter ("Agreement") sets forth the agreement reached concerning the
termination of your employment with Curative Health Services, Inc., including
its current and former parents, subsidiaries and affiliated entities, and their
respective current and former successors, assigns, representatives, agents,
attorneys, shareholders, officers, directors and employees, both individually
and in their official capacities (collectively "Curative").
1. You acknowledge and agree that effective April 23, 2004 you were no
longer an executive officer of Curative, that you had waived any requirement
relating to receipt of a written Notice of Termination pursuant to your Amended
and Restated Employment Agreement effective as of June 1, 1999, as amended or
modified (the "Employment Agreement"), and that your employment with Curative
will terminate on May 14, 2005. You acknowledge and agree that during the period
of May 14, 2004 through May 14, 2005, you will be available as may be requested
from time to time by Curative (understanding that Curative anticipates that such
requests would involve a minimal amount of time) are not required to, nor shall
you, report to work regularly for Curative. In that connection, you will not
have access to Curative's computer, facsimile or telephonic services.
2. Curative will continue to pay your salary, less applicable withholdings
and deductions, and provide you with the benefits that you are currently
receiving through May 14, 2004. You hereby waive the payment of your base salary
from the period May 15, 2004 through May 14, 2005. Curative will also provide
you with a lump-sum payment, less applicable withholdings and deductions,
representing the value of your accrued unused vacation through May 14, 2004, if
any.
3. In consideration for signing this Agreement and in exchange for the
promises, covenants and waivers set forth herein, Curative will, provided you
have not revoked this Agreement as set forth below, provide you with the
following:
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(a) Within thirty (30) days of the later of May 14, 2004 or the
expiration of the period during which you may revoke this Agreement
("Revocation Period"), a lump sum severance payment in the amount of
One Hundred Thousand ($100,000) Dollars;
(b) Commencing the first regular pay period after May 14, 2004 and
provided that you shall not revoke this Agreement, you will receive
as severance an amount equal to your Base Salary of $280,712.38 in
bi-weekly payments for a period of twelve (12) months, less
applicable withholdings and deductions. You hereby waive the amount
of Base Salary which you would otherwise receive in connection with
your employment through May 14, 2005;
(c) Commencing after May 14, 2004 provided that you shall not revoke
this Agreement, and until the earlier of May 14, 2005 or when you
obtain full-time employment, welfare benefits (including disability,
life and health insurance benefits) of substantially similar design
and cost to you as the welfare benefits available to you prior to
your date of termination;
(d) Commencing after May 14, 2004 provided that you shall not revoke
this Agreement, and until the earlier of May 14, 2005 or when and if
you obtain other full-time employment, auto allowance payments in
the same amount received prior to May 14, 2004;
(e) Six (6) months of executive outplacement services with a firm
engaged by Curative;
(f) During the twelve (12) month period from May 14, 2004 through May
14, 2005 all of your unvested stock option awards will continue to
vest and become exercisable. You will have three months from May 14,
2005 to exercise all vested stock option awards;
(g) You and Curative acknowledge and agree that if any Change of Control
(as defined in the Employment Agreement) occurs on or prior to May
14, 2005, then any unvested stock options would be accelerated
pursuant to the terms of the respective stock option agreement and
the Employment Agreement, but that Curative shall not be obligated
to make any cash payment which might otherwise have been provided
for under the Employment Agreement upon such change of control; and
(h) Note that you are required to promptly notify Curative in writing if
and when you obtain any other employment prior to May 14, 2005.
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4. In consideration of the benefits described above and for other good and
valuable consideration, you hereby release and forever discharge, and by this
instrument release and forever discharge Curative from all debts, obligations,
promises, covenants, agreements, contracts, endorsements, bonds, controversies,
suits, actions, causes of action, judgments, damages, expenses, claims or
demands, in law or in equity, which you ever had, now have, or which may arise
in the future, regarding any matter arising on or before the date of your
execution of this Agreement, including but not limited to all claims (whether
known or unknown) regarding your employment at or termination of employment from
Curative, any contract (express or implied), any claim for equitable relief or
recovery of punitive, compensatory, or other damages or monies, attorneys' fees,
any tort, and all claims for alleged discrimination based upon age, race, color,
sex, sexual orientation, marital status, religion, national origin, handicap,
disability, or retaliation, including any claim, asserted or unasserted, which
could arise under Title VII of the Civil Rights Act of 1964; the Equal Pay Act
of 1963; the Age Discrimination in Employment Act of 1967 ("ADEA"); the Older
Workers Benefit Protection Act of 1990; the Americans With Disabilities Act of
1990; the Civil Rights Act of 1866, 42 U.S.C. ss. 1981; the Xxxxxxxx-Xxxxx Act;
the Employee Retirement Income Security Act of 1974; the Family and Medical
Leave Act of 1993; the Civil Rights Act of 1991; the New York State Human Rights
Law, the New York City Human Rights Law and any other federal, state or local
laws, rules or regulations, whether equal employment opportunity laws,
nondiscrimination statutes and regulations, or otherwise, or any right under any
Curative pension, welfare, or stock plans. This Agreement may not be cited as,
and does not constitute any admission by Curative of, any violation of any such
law or legal obligation with respect to any aspect of your employment or
termination therefrom. To the extent that the terms of this letter may conflict
with any provision of the Employment Agreement, the terms of this letter shall
prevail.
5. You represent and agree that you have not filed any lawsuits against
Curative, or filed or caused to be filed any charges or complaints against
Curative with any municipal, state or federal agency charged with the
enforcement of any law. Pursuant to and as a part of your release and discharge
of Curative, as set forth herein, with the sole exception of your right to bring
a proceeding pursuant to the Older Workers Benefit Protection Act to challenge
the validity of your release of claims pursuant to the ADEA, you agree, not
inconsistent with EEOC Enforcement Guidance On Non-Waivable Employee Rights
Under EEOC-Enforced Statutes dated April 11, 1997, and to the fullest extent
permitted by law, not to sue or file a charge, complaint, grievance or demand
for arbitration against Curative in any forum or assist or otherwise participate
willingly or voluntarily in any claim, arbitration, suit, action, investigation
or other proceeding of any kind which relates to any matter that involves
Curative, and that occurred up to and including the date of your execution of
this Agreement, unless required to do so by court order, subpoena or other
directive by a court, administrative agency, arbitration panel or legislative
body, or unless required to enforce this Agreement. To the extent any such
action may be brought by a third party, you expressly waive any claim to any
form of monetary or other damages, or any other form of recovery or relief in
connection with any such action. Nothing in this paragraph shall prevent you (or
your attorneys) from (i) commencing an action or proceeding to enforce this
Agreement or (ii) exercising your right under the Older Workers
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Benefit Protection Act of 1990 to challenge the validity of your waiver of ADEA
claims set forth in paragraph 4 of this Agreement.
6. You represent and affirm that you have not reported any purported
improper, unethical or illegal conduct or activities to any supervisor, manager,
department head, Human Resources representative or other representative of
Curative, and have no knowledge of any such improper, unethical or illegal
conduct or activities.
7. The provisions set forth in Section 5 of the Employment Agreement are
incorporated herein and remain in full force and effect, excluding Section 5.4
which shall be amended as indicated in Exhibit A. Specifically, you agree to
adhere to the requirements of Section 5.1 Trade Secrets and Confidential
Information, Section 5.2 Transfer of Inventions and Section 5.5 Disclosure to
Prospective Employers. You agree that in the event of a breach by you of any of
the covenants set forth above, Curative has no adequate remedy at law and shall
be entitled to injunctive and equitable relief, in addition to all other
remedies available, without the requirement of posting any bond. The restrictive
periods reflected on Exhibit A shall be tolled during any period that you are
engaged in any activity in violation of the covenants reflected in Section 5.4.
8. The Employment Agreement shall be amended as set forth in Exhibit A to
this Agreement and you agree to adhere to such requirements as amended. You
further agree that in the event of a breach by you of any of the covenants set
forth in Exhibit A, Curative has no adequate remedy at law and shall be entitled
to injunctive and equitable relief, in addition to all other remedies available,
without the requirement of posting any bond.
9. You represent, warrant and acknowledge that Curative owes you no wages,
commissions, bonuses, sick pay, personal leave pay, severance pay, vacation pay
or other compensation or benefits or payments or form of remuneration of any
kind or nature, other than that specifically provided for in this Agreement.
10. You and the Company each agree to not disparage or criticize the
other, or issue any communication, written or otherwise, that reflects adversely
on or encourages any adverse action against the other, except if testifying
truthfully under oath pursuant to any lawful court order or subpoena or
otherwise responding to or providing disclosures required by law.
11. You agree not to disclose the terms, contents or execution of this
Agreement, the claims that have been or could have been raised against Curative,
or the facts and circumstances underlying this Agreement, except in the
following circumstances:
a. You may disclose the terms of this Agreement to your immediate
family, so long as such family member agrees to be bound by the confidential
nature of this Agreement;
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b. You may disclose the terms of this Agreement to (i) your tax
advisors so long as such tax advisors agree in writing to be bound by the
confidential nature of this Agreement, (ii) taxing authorities if requested by
such authorities and so long as they are advised in writing of the confidential
nature of this Agreement, (iii) your legal counsel or (iv) as required under
Section 5.5 of your Employment Agreement; and
c. Pursuant to the order of a court or governmental agency of
competent jurisdiction, or for purposes of securing enforcement of the terms and
conditions of this Agreement.
12. Nothing in this Agreement shall prohibit or restrict you from making
any disclosure of information required by law or testifying, participating or
otherwise assisting in a proceeding relating to an alleged violation of the
Xxxxxxxx-Xxxxx Act.
13. Upon service on you, or anyone acting on your behalf, of any subpoena,
order, directive or other legal process requiring you to engage in conduct
encompassed within paragraphs 10 or 11 of this Agreement, you or your attorney
shall immediately notify Curative of such service and of the content of any
testimony or information to be provided pursuant to such subpoena, order,
directive or other legal process and within two (2) business days send to the
undersigned representative of Curative via overnight delivery (at Curative's
expense) a copy of said documents served upon you.
14. You agree that you will assist and cooperate with Curative in
connection with the defense or prosecution of any claim that may be made against
or by Curative, or in connection with any ongoing or future investigation or
dispute or claim of any kind involving Curative, including any proceeding before
any arbitral, administrative, judicial, legislative, or other body or agency,
including testifying in any proceeding to the extent such claims, investigations
or proceedings relate to services performed or required to be performed by you,
pertinent knowledge possessed by you, or any act or omission by you. You further
agree to perform all acts and execute and deliver any documents that may be
reasonably necessary to carry out the provisions of this paragraph.
15. This Agreement constitutes the entire agreement between Curative and
you, and supersedes and cancels all prior and contemporaneous written and oral
agreements between Curative and you, excluding the applicable provisions of your
Employment Agreement (a) that are not modified or superseded by this Agreement
and which shall remain in place until May 15, 2005, and (b) that survive the
termination of your employment with Curative and which shall survive beyond May
15, 2005]. You affirm that, in entering into this Agreement, you are not relying
upon any oral or written promise or statement made by anyone at any time on
behalf of Curative.
16. This Agreement is binding upon you and your successors, assigns,
heirs, executors, administrators and legal representatives.
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17. If any of the provisions, terms or clauses of this Agreement are
declared illegal, unenforceable or ineffective in a legal forum, those
provisions, terms and clauses shall be deemed severable, such that all other
provisions, terms and clauses of this Agreement shall remain valid and binding
upon both parties.
18. Without detracting in any respect from any other provision of this
Agreement:
a. You, in consideration of the benefits provided to you as
described in paragraph 3 of this Agreement, agree and acknowledge that this
Agreement constitutes a knowing and voluntary waiver of all rights or claims you
have or may have against Curative as set forth herein, including, but not
limited to, all claims of age discrimination in employment, all claims of
retaliation and all claims of breach of contract; and you have no physical or
mental impairment of any kind that has interfered with your ability to read and
understand the meaning of this Agreement or its terms, and that you are not
acting under the influence of any medication or mind-altering chemical of any
type in entering into this Agreement.
b. You understand that, by entering into this Agreement, you do not
waive rights or claims that may arise after the date of your execution of this
Agreement, including without limitation any rights or claims that you may have
to secure enforcement of the terms and conditions of this Agreement.
c. You agree and acknowledge that the consideration provided to you
under this Agreement is in addition to anything of value to which you are
already entitled.
d. Curative hereby advises you to consult with an attorney prior to
executing this Agreement.
e. You acknowledge that you had at least forty-five (45) days in
which to review and consider this Agreement, and to consult with an attorney
regarding the terms and effect of this Agreement.
19. You may revoke this Agreement within seven (7) days from the date you
sign this Agreement, in which case this Agreement shall be null and void and of
no force or effect on either Curative or you. Any revocation must be in writing
and received by Curative by 5:00 p.m. on or before the seventh (7th) day after
this you execute Agreement. Such revocation must be sent to Xxxxx X. Xxxxx,
Executive Vice President, General Counsel and Secretary, Curative Health
Services, Inc., 000 Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
20. This Agreement may not be changed or altered, except by a writing
signed by Curative and you. This Agreement is entered into in the State of New
York and the laws of the State of New York will apply to any dispute concerning
it.
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YOU EXPRESSLY ACKNOWLEDGE, REPRESENT, AND WARRANT THAT YOU HAVE READ
THIS AGREEMENT CAREFULLY; THAT YOU FULLY UNDERSTAND THE TERMS, CONDITIONS, AND
SIGNIFICANCE OF THIS AGREEMENT; THAT CURATIVE HAS ADVISED YOU TO CONSULT WITH AN
ATTORNEY CONCERNING THIS AGREEMENT; THAT YOU HAVE HAD A FULL OPPORTUNITY TO
REVIEW THIS AGREEMENT WITH AN ATTORNEY; THAT YOU UNDERSTAND THAT THIS AGREEMENT
HAS BINDING LEGAL EFFECT; AND THAT YOU HAVE EXECUTED THIS AGREEMENT FREELY,
KNOWINGLY AND VOLUNTARILY.
PLEASE READ CAREFULLY. THIS AGREEMENT HAS IMPORTANT LEGAL
CONSEQUENCES.
Date: 5/15/04 /s/ Xxxxxxx. X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
On this 15th day of May 2004, before me personally came Xxxxxxx X.
Xxxxx, to me known to be the individual described in the foregoing instrument,
who executed the foregoing instrument in my presence, and who duly acknowledged
to me that he executed the same.
/s/ Xxxxxxxxx Xxxxxxxxxxx
---------------------------
Xxxxxxxxx Xxxxxxxxxxx
Notary Public
CURATIVE HEALTH SERVICES, INC.
Date: 5/17/04 By: /s/ Xxxxxx Xxxxxxxx
------------------------
Name: Xxxxxx Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT A
AMENDMENT TO AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
This Amendment to the Amended and Restated Employment Agreement (this
"Amendment"), effective as of May 14, 2004, is made and entered into between
Curative Health Services, Inc., a Minnesota corporation ("Employer"), and
Xxxxxxx X. Xxxxx, an individual resident of the State of New York ("Employee").
WHEREAS, Employer and Employee entered into an Amended and Restated
Employment Agreement, effective as of June 1, 1999 (the "Employment Agreement");
and
WHEREAS, Employer and Employee wish to amend the Employment Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Employer and Employee agree to amend the Employment Agreement as
follows:
1. Delete Section 5.4 in its entirety and replace with the following:
5.4 Restrictive Covenants. Employee agrees to be bound and abide by the
following (for purposes of this Section 5.4, Company shall include all parents,
subsidiaries and affiliates of the Company):
(a) Covenant Not to Compete. During his employment with the Company and
for a period of two (2) years following the termination of Employee's employment
(the "Non-Compete Restricted Period"). Employee shall not, directly or
indirectly, engage in any "Competing Business Activity" (as hereinafter
defined), in any manner or capacity, including but not limited to as an advisor,
principal, agent, partner, officer, director, shareholder, employee, employer,
consultant or member of any association, unless Employee is acting in such
manner or capacity solely for a division of a corporation where such division
does not conduct a Competing Business Activity. The Non-Compete Restricted
Period shall be tolled during any period that Employee is engaged in activity in
violation of this covenant.
(i) Geographical Extent of Covenant. The obligations of Employee
under this Section 5.4 shall apply in any state in which the
Company is located, operates, provides or intends to provide
products or services, or does business in on the date of
termination. Employee hereby acknowledges that the geographic
boundaries, scope of prohibited activities and the time
duration of the provisions of this Section are reasonable and
are no broader than necessary to protect the legitimate
business interests of the Company
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(ii) Limitation on Covenant. Ownership by Employee, as a passive
investment, of less than three percent of the outstanding
shares of capital stock of any corporation listed on a
national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this
Section 5.4.
(iii) Competing Business Activity. As used in this Section 5.4,
"Competing Business Activity" shall mean (a) the business of
wholesale and/or retail pharmacy operations including without
limitation relating to the provision of drugs and/or
biopharmaceuticals for delivery to or use in the home or
physician offices, of the following infusible or injectable
therapy products and services: anti-infectives, TPN (Total
Parenteral Nutrition) therapy, hemophilia clotting factor
products, IVIG (Immune Globulin) therapy,
Synagis(R)(collectively, "Specialty Pharmacy Operations"); (b)
disease management programs related to Specialty Pharmacy
Operations; (c) the establishment, operation, promotion or
management of any facility, program, department or services
that has as its primary business the treatment of chronic,
non-healing wounds ("Specialty Healthcare Operations"); (d)
business development, clinical services, reimbursement
services and delivery services in connection with Specialty
Pharmacy Operations and/or Specialty Healthcare Operations,
and (e) any other business conducted by Employer, its
subsidiaries or affiliates.
(b) Nonsolicitation, Non-Hire and Noninterference. During his employment
with the Company and for a period of one (1) year following the termination of
Employee's employment (the "Nonsolicitation Restricted Period"), Employee shall
not, directly or indirectly (a) induce or attempt to induce any employee of the
Company to leave the employ of the Company, or in any way interfere adversely
with the relationship between any such employee and the Company; (b) induce or
attempt to induce any employee of the Company to work for, render services to,
provide advice to, or supply confidential business information or trade secrets
of the Company to any third person, firm or corporation; (c) employ, or
otherwise pay for services rendered by, any employee of the Company in any
business enterprise with which Employee may be associated, connected or
affiliated, or (d) induce or attempt to induce any customer, supplier, licensee,
licensor, referral source or other business relation of the Company to cease
doing business with the Company, or in any way interfere with the then existing
business relationship between any such customer, supplier, licensee, licensor,
referral source or other business relation and the Company; or (e) induce or
attempt to induce any actual or prospective customer, supplier, licensee,
licensor, referral source or other business relation of the Company or its
affiliates, for whom Employee performed any services, with whom Employee had any
business contact, or whose identity or other specific information Employee
discovered or gained access to as a result of Employee's employment with the
Company to cease doing business with the Company or any affiliate or in any way
interfere with the then existing business relationship between any such
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customer, supplier, licensee, licensor, referral source or other business
relation and the Company, its subsidiaries or affiliates. The Nonsolicitation
Restricted Period shall be tolled during any period that Employee is engaged in
activity in violation of this covenant.
(c) Judicial Action. Employee and the Company agree that, if the period of
time of the restrictive covenants contained in this Section 5.4 shall be judged
unreasonable in any court proceeding then the period of time and/or scope shall
be reduced accordingly, so that the covenant may be enforced in such scope and
during such period of time as is judged by the court to be reasonable. In the
event of a breach or violation of Section 5.4 by Employee, the parties agree
that in addition to all other remedies, the Company shall be entitled to
equitable relief for specific performance (without having to post any bond), and
Employee hereby agrees and acknowledges that the Company has no adequate remedy
at law for the breach of the covenants contained herein.
IN WITNESS WHEREOF, the parties have executed this Amendment as of May 14,
2004.
CURATIVE HEALTH SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Executive Vice President and
CFO
EMPLOYEE
/s/ Xxxxxxx. X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
