SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
SEPARATION
AGREEMENT AND GENERAL RELEASE
This
Separation Agreement and General Release (the “Agreement”),
is
entered into on this 15th day of May, 2007 by and between Comprehensive Health
Management, Inc., a Florida corporation, on behalf of itself and any of its
affiliates, parent companies or subsidiaries (collectively the “Company”),
and
Xxxxxx Xxxxxxx, an individual (“Executive”).
WHEREAS,
Executive entered into a Restrictive Covenant Agreement on December 12, 2003
(the “Restrictive
Covenant Agreement”)
with
the Company which generally prohibits Executive, for a one year period, from
(1)
accepting employment with a competitor; (2) soliciting, hiring or recruiting
employees of the Company; (3) requesting or advising any provider, member
or
agent of the Company to withdraw, curtail, alter, modify or cancel its dealings
with the Company; and (4) disparaging the Company at any time after the
termination of his employment;
WHEREAS,
Executive entered into a Confidentiality Agreement with the Company on December
12, 2003 (the “Confidentiality
Agreement”)
which
(1) obligates Executive to return all Company property and materials and
any
copies thereof, whether in electronic or hard copy form; and (2) prohibits
Executive from ever using or disclosing any confidential information of the
Company;
WHEREAS,
Executive entered into numerous stock option agreements and restricted stock
agreements (the “Equity
Agreements”)
during
his employment which required Executive, in exchange for the right to vest
and
exercise valuable stock options and shares of restricted stock, to agree
to
certain covenants including but not limited to the commitment not to compete
with the Company for a period of up to one year after his termination of
employment;
WHEREAS,
the parties have agreed to resolve certain matters related to Executive’s
termination of service and to ensure that Executive complies with his duties
and
obligations to the Company;
WHEREAS,
the Company wishes to provide certain termination consideration, in exchange
for
Executive’s covenants contained in this Agreement;
WHEREAS,
Executive represents and warrants that he has not engaged in any action which
would violate his existing commitments regarding non-solicitation and
recruitment of Company employees as reflected in the Restrictive Covenant
Agreement; and
WHEREAS,
Executive and the Company would like to formalize their agreement regarding
the
termination of their relationships.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, which covenants and agreements constitute good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Unconditional
and Full General Release of All Claims.
In
exchange for the financial consideration set forth in Section 2 below, Executive
on his behalf and on behalf of his agents, heirs, administrators, executors,
attorneys and assigns, and anyone acting or claiming on each of their respective
behalves, hereby covenants never to xxx, releases, waives, acquits, and forever
discharges the Company, its divisions, subsidiaries, affiliates, parents,
related entities, and their respective past or present employees, officers,
directors, stockholders, partners, investors, executives, managers, agents,
attorneys, representatives, successors and assigns, and anyone acting on
their
joint or several behalf (collectively, the “Releasees”),
from
any and all claims, actions, causes of action, demands, damages, suits in
equity, costs, expenses, liabilities, or other losses, of any kind whatsoever,
whether known or unknown, which exist or may exist from the beginning of
time up
to and including the date of Executive’s execution of this Agreement or which in
any way arise from, grow out of, or are related to events or circumstances
that
occurred on or prior to the date of Executive’s execution of this Agreement,
including but not limited to any matter related to Executive’s employment with
the Company or the termination thereof. By way of example only and without
limiting the immediately preceding sentence, as used herein the terms “claims,”
“causes of action” and “demands” shall include, and Executive agrees that
neither Executive nor Executive’s representative(s) shall file, or cause to be
filed, a charge, complaint, lawsuit, or any other claim against the Releasees
with respect to, (a) any federal, state, or local employment law or
statute, including, but not limited to Title VII of the Civil Rights Act(s)
of
1964, as amended, the Americans with Disabilities Act, the Age Discrimination
in
Employment Act, the Older Workers’ Benefit Protection Act, the Family and
Medical Leave Act, the Employee Retirement Income Security Act or Chapters
448
or 760 of the Florida Statutes, or (b) any claim based on the existence or
breach of oral or written contracts of employment, the negligence of any
Releasee, negligent or intentional misrepresentations, promissory estoppel,
interference with contract or employment, defamation or damage to business
or
personal reputation, assault and battery, negligent or intentional infliction
of
emotional distress, unlawful discharge in violation of public policy,
discrimination, retaliation, wrongful discharge, sexual harassment,
whistleblowing, breach of implied covenant of good faith, fraud, stock fraud,
equity, tort, intellectual property, personal injury, spoliation of evidence,
wage and hour law, statute or common law, claims for severance pay, claims
related to equity compensation and/or fringe benefits, claims for attorneys’
fees, vacation pay, debts, accounts, compensatory damages, punitive or exemplary
damages or liquidated damages. Notwithstanding the foregoing, Executive shall
not be deemed to have released any of the following claims: (i) claims for
indemnity or contribution or claims for coverage under any D&O insurance
policies maintained by the Company or its subsidiaries, in each case, in
respect
of claims asserted against Executive in his capacity as an employee or officer
of the Company or its subsidiaries, (ii) claims for vested retirement benefits
or continued welfare coverage, (iii) claims based on events occurring after
this
agreement is executed by Executive or (iv) claims for payments from the Escrow
(as defined below) in accordance with the terms of this Agreement and the
Escrow
Agreement (as defined below).
2. Financial
Consideration.
(a) In
exchange for Executive’s commitments as outlined in this Agreement, the Company
shall provide to Executive a lump-sum separation payment in the amount of
$135,000, less all applicable withholding taxes and will reimburse Executive
for
the monthly premium costs incurred by Executive during the 12 month period
commencing May 1, 2007 in connection with continuing the health insurance
coverage of Executive and his eligible dependents pursuant to Section 4980B
of
the Internal Revenue Code of 1986, as amended. The Company shall make such
payment to Executive within ten days of the later of (i) the Effective
Date
or (ii)
the date of execution of this Agreement by Executive. Executive shall not
accrue
or be eligible for any salary, pay, benefits, or other consideration from
the
Company other than as outlined herein. Executive acknowledges and agrees
that
Executive is not otherwise entitled to any severance pay.
(b) Executive
acknowledges that, absent this Agreement, Executive has no legal, contractual
or
other entitlement to the consideration set forth in this Section 2 and that
such
consideration constitutes valid and sufficient consideration for Executive’s
release of claims and other obligations set forth in this Agreement.
3. Severance
of Employment.
Pursuant to this Agreement, Executive agrees and recognizes that Executive
voluntarily resigned his employment relationship with the Company on April
6,
2007 (the “Separation
Date”).
4. Acceptance
of Agreement; Revocation.
This
Agreement was received by Executive on April 6, 2007. Executive may accept
this
Agreement by returning a signed original to the Company. This Agreement shall
be
withdrawn if not accepted as provided in the previous sentence on or before
May
18, 2007. Executive shall have seven days after signing this Agreement to
revoke
it by delivering written confirmation of revocation to the Company within
such
seven day period. This Agreement will not become effective until the revocation
period has expired without revocation of this Agreement by Executive (the
“Effective
Date”).
5. Future
Employment.
Executive agrees that Executive will not seek reinstatement or apply for
future
employment with the Company or any of its present or future affiliates.
6. Non-Competition;
Non-Solicitation.
(a) Executive
agrees that he will abide by all covenants he has previously agreed to observe,
including but not limited to the Covenants (as hereinafter defined).
(b) Executive
agrees that, to the extent Executive intends to accept employment with, or
provide consulting or other services to, any entity that is engaged, directly,
indirectly or through an affiliate, in the healthcare industry (the
“Employer”)
during
the Restricted Period (as hereinafter defined), Executive shall: (1) provide
copies to the Employer of the Covenants prior to accepting employment with,
or
providing services to, the Employer; (2) provide reasonable notice to the
Company (no less than one month prior to assuming any employment
responsibilities with, or providing services to, the Employer) of Executive’s
intent to provide employment or other services of any kind; (3) provide
information reasonably satisfactory to the Company regarding the nature of
the
work Executive intends to perform for the Employer and the nature of the
business of the Employer and its affiliates to enable the Company to make
a
reasoned determination as to whether Executive’s services will violate any of
the Covenants; (4) provide monthly certifications during the Restricted Period
that Executive’s duties and responsibilities with the Employer are consistent
with those described in clause (3) above and otherwise do not violate any
of the
Covenants; and (4) obtain from the Employer monthly certifications during
the
Restricted Period that are addressed directly to the Company that state that
Executive’s duties and responsibilities with the Employer are consistent with
those described in clause (3) above and otherwise do not violate any of the
Covenants.
7. Confidential
Information and Return of Company Property
Executive has returned any and all Company property, including but not limited
to laptop computer, blackberry, cell phone and any other equipment provided
by
the Company to Executive. Executive further agrees that neither Executive
nor
Executive’s affiliates will at any time for any reason, in any fashion, form or
manner, either directly or indirectly, divulge, disclose or communicate to
any
person, firm, corporation or other business entity, in any manner whatsoever,
any confidential information or trade secrets concerning the business of
the
Company or any of its affiliates, including without limiting the generality
of
the foregoing, methods or systems of its or their operation or management,
any
information regarding its or 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
Company or any of its affiliates, its or their manner of operation, its or
their
plans or other material data (the “Business”).
Executive agrees that neither Executive nor any of Executive’s affiliates shall
retain any confidential or proprietary information, including, without
limitation, any member, subscriber or provider lists, identifying information
regarding members or subscribers, pricing methods, financial structures,
correspondence, accounts, records, or any other documents or property made
or
held by Executive or any of Executive’s affiliates, or under Executive’s or any
of Executive’s affiliates’ control, in relation to the Business of the Company
or its affiliates, nor shall Executive or any of Executive’s affiliates retain
any copy of any such confidential or proprietary information, all
of
which (whether in hard copy or electronic format and including all originals
and
copies) shall immediately be returned to the Company prior to mutual execution
of this Agreement.
8. Nondisclosure
of Terms.
(a)
Except
as
otherwise required by law, the parties agree that the terms and conditions
of
this Agreement are and shall remain confidential, it being understood that
the
Company shall be permitted to publicly file this Agreement if required by
law.
Except as specifically set forth herein, Executive shall not disclose the
terms
of this Agreement in whole or in part to any individual or entity without
prior
written consent of the Company.
(b)
Executive
agrees that he will not disclose the terms of this Agreement to any person
except (i) to members of Executive’s immediate family and Executive’s
professional advisors, who shall be advised of the confidentiality provisions
of
this Section 8, (ii) to the extent required by a final and binding court
order or other compulsory process, (iii) to any federal, state, or local
taxing authority, or (iv) any entity with which Executive seeks employment
consistent with the terms of Section 6. Upon Executive’s receipt of any order,
subpoena, or other compulsory process demanding production or disclosure
of this
Agreement, Executive agrees that no later than ten business days prior to
the
date that such disclosure is to be made, Executive will notify the Company
in
writing of the requested disclosure, including the proposed date of the
disclosure, the reason for the requested disclosure, and the identity of
the
individual or entity requesting the disclosure.
(c) Executive
further understands and agrees that this Agreement shall not be admissible
as
evidence in any court proceeding or administrative proceeding, except that
the
Company or Executive may submit this Agreement to any appropriate forum in
the
event of an alleged breach of this Agreement.
9. Future
Cooperation.
(a) Executive
agrees to fully and completely cooperate with the Company, its advisors,
and its
legal counsel with respect to any litigation that is pending against the
Company
and any claim or action that may be filed against the Company in the future,
in
each case, to the extent Executive has knowledge relevant to such action.
Such
cooperation shall include making Executive available at reasonable times
and
places, taking into account Executive’s personal and business schedule, for
interviews, reviewing documents, testifying in a deposition or a legal or
administrative proceeding, and providing advice to the Company in preparing
defenses to any pending or potential future claims against the
Company.
(b)
If
Executive is legally required to appear or participate in any proceeding
that
involves or is brought against the Company, Executive agrees to disclose
to the
Company no later than ten business days prior to the date that such disclosure
is to be made what Executive plans to say or produce and otherwise cooperate
fully with the Company.
(c)
The
Company agrees to pay Executive at an hourly rate of $350 for services rendered
by Executive at the request of the Company pursuant to this Section 9 (a)
or
(b).
(d)
Executive
agrees to reasonably cooperate with the Company as necessary for the Company
to
comply with its public disclosure requirements, including providing information
necessary to complete any D&O Questionnaire or any similar
document.
10. Nondisparagement;
No Communication Regarding the Company.
Executive agrees that he shall not talk about or otherwise communicate to
any
third parties in a malicious, disparaging, or defamatory manner regarding
the
Company or any aspect of Executive’s prior employment therewith. Executive shall
not make or authorize to be made any written or oral statement that may
disparage or damage the reputation of the Company or its past or present
employees, officers, or other representatives. Further, Executive agrees
that
Executive will not talk about or otherwise communicate to any third parties
regarding the Company, including but not limited to any aspect of Executive’s
employment or the termination thereof, unless legally compelled to do so.
The
Company shall not authorize, and shall direct its executive officers and
senior
vice presidents to not make, any statements inconsistent with the statements
set
forth on Exhibit A. Nothing herein shall prevent either party from making
truthful statements required to be made pursuant to applicable law.
11. Provisions
Necessary and Reasonable.
Executive agrees that (a) the provisions of Sections 6, 7 and 10 of this
Agreement are necessary and reasonable to protect the Company’s confidential
information and goodwill; and (b) in the event of any breach of any of the
covenants set forth herein, the Company would suffer substantial irreparable
harm and would not have an adequate remedy at law for such breach. The Company
agrees that (a) the provisions of Section 10 of this Agreement are necessary
and
reasonable to protect the Executive’s reputation; and (b) in the event of any
breach of any of the covenants set forth herein, Executive would suffer
substantial irreparable harm and would not have an adequate remedy at law
for
such breach. In recognition of the foregoing, the Executive and the Company
agree that in the event of a breach or threatened breach of any of these
covenants, in addition to such other remedies as the Company and Executive
may
have at law, without posting any bond or security, the Company and Executive
shall be entitled to seek and obtain equitable relief, in the form of specific
performance, and/or temporary, preliminary or permanent injunctive relief,
or
any other equitable remedy which then may be available. The seeking of such
injunction or order shall not affect the Company’s or Executive’s right to seek
and obtain damages or other equitable relief on account of any such actual
or
threatened breach.
12. Treatment
of Options.
Exhibit
B sets forth options to acquire shares of the Company’s common stock
(“Shares”),
that
have been previously granted to Executive pursuant to the Wellcare Holdings,
LLC
2002 Employee Option Plan (the “2002
Options”)
and
the Wellcare Health Plans, Inc. 2004 Equity Incentive Plan (the ”2004
Options”
and,
together with the 2002 Options, the “Options”),
in
each case, that are vested and exercisable on the date hereof. The Options
shall
remain outstanding and exercisable in accordance with their terms. All other
unvested equity awards or options to acquire Shares granted to Executive
shall
be terminated as of the Separation Date. Promptly after, but in any event
within
ten business days after, any and all exercises of the Option(s), 40% of the
net
proceeds of such exercise(s) (i.e., after taking into account the payment
of the
applicable exercise price, any associated brokerage and interest costs and
applicable taxes) (the “Escrowed
Funds”)
shall
be deposited in escrow (the “Escrow”)
and
held until paid out in accordance with the Escrow Agreement (as hereinafter
defined). The parties shall, in good faith, use commercially reasonable efforts
to select a mutually agreeable Escrow agent and to negotiate and execute
an
Escrow Agreement (the “Escrow
Agreement”)
substantially in the form attached as Exhibit C, with such modifications
as the
Escrow Agent shall reasonably request, as soon as reasonably practicable
after
the date hereof. In the event the Escrow Agreement has not been executed
by the
date Executive exercises any Options, WellCare shall hold the Shares that
would
have been deposited in the Escrow and deposit such Shares in the Escrow promptly
after full execution of the Escrow Agreement. The Escrowed Funds shall be
paid
to Executive in accordance with Section 5 of the Escrow Agreement if, during
the
period ending on the first anniversary of the Separation Date (or such shorter
period during which the applicable Covenants contained in each such Agreement
apply in accordance with their terms) (the “Restricted
Period”),
Executive complies with his duties and obligations imposed under this Agreement
and under the Restrictive Covenant Agreement, Confidentiality Agreement and
Equity Agreements (collectively, the “Agreements”)
(including, without limitation, the non-competition, non-solicitation,
non-interference and confidentiality covenants set forth in the Agreements)
(the
“Covenants”).
Without in any way limiting other remedies available to the Company, the
Escrowed Funds shall be paid to the Company in accordance with Section 5
of the
Escrow Agreement, and Executive will forfeit any right or entitlement to
any
portion of the Escrowed Funds if, during the Restricted Period, the Executive
fails to comply with this Agreement or the Covenants during the Restricted
Period. This Section 12 shall supersede and replace the repurchase provisions
included in the 2002 Options. For the sake of clarity, any amount that would
have been paid to Executive pursuant to this Section 12 shall be paid, in
the event of Executive’s death, to his estate or designated
beneficiaries.
13. No
Admission of Wrongful Conduct.
Executive hereby acknowledges and agrees that, by the Company providing the
financial consideration described above and entering into this Agreement,
neither the Company nor the Releasees are admitting any unlawful or otherwise
wrongful conduct or liability to Executive or Executive’s heirs, executors,
administrators, assigns, agents, or other representatives.
14. Executive
Acknowledgment.
EXECUTIVE UNDERSTANDS AND AGREES THAT EXECUTIVE MAY BE WAIVING SIGNIFICANT
LEGAL
RIGHTS BY SIGNING THIS AGREEMENT, AND ACKNOWLEDGES THAT EXECUTIVE IS EXECUTING
THIS AGREEMENT VOLUNTARILY AND OF EXECUTIVE’S OWN FREE WILL AND THAT EXECUTIVE
FULLY UNDERSTANDS THE TERMS OF THIS AGREEMENT. Further, Executive acknowledges
that Executive has had an opportunity to review this Agreement fully and
to
discuss its terms with legal counsel or any other advisor of Executive’s choice
prior to its execution.
15. Ownership
of Claims; No Filing of Claims.
Executive represents, warrants and agrees that Executive has not heretofore
assigned or transferred, or purported to assign or transfer, to any person,
any
claim or portion thereof or interest therein. Executive further represents
and
warrants that Executive does not presently have on file any claims, charges,
grievances or complaints against any of the Releasees in or with any
administrative, state, federal or governmental entity, agency, board or court,
or before any other tribunal or panel or arbitrators, public or private,
based
upon any actions or omissions by the Releasees occurring prior to the
Effective
Date.
16. No
Attorneys’ Fees or Costs.
Each of
Executive and the Company acknowledges and agrees that the other shall not
be
required to pay any attorneys’ fees or any other costs incurred in connection
with the representation of either party in this matter.
17. Arbitration.
Any
dispute regarding any aspect of this Agreement, including its formation,
or any
act which would violate any provision in this Agreement (other
than disputes with respect to alleged violations of the covenants contained
in
Sections 6, 7 or 10 hereof, and the Company’s pursuit of the remedies described
in Section 11 hereof in connection therewith) shall
be
resolved in final and binding arbitration by an experienced employment law
arbitrator licensed to practice law in Florida and selected in accordance
with
the rules of the American Arbitration Association, as the exclusive remedy
for
such dispute. Judgment on any award rendered by such arbitrator may be entered
in any court having proper jurisdiction.
18. No
Representations.
Executive represents and acknowledges that in executing this Agreement Executive
is not relying upon and has not relied upon any representation or statement,
other than as set forth herein, made by the Company or any agents,
representatives, or attorneys of the Company with regard to the subject matter,
basis or effect of this Agreement or otherwise.
19. Successors.
This
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by
the parties hereto and their respective successors and assigns.
20. Governing
Law; Jurisdiction.
This
Agreement is made and entered into in the State of Florida, and shall in
all
respects be interpreted, enforced and governed by and under the internal
laws of
the State of Florida. Each of the undersigned hereby consents to the personal
jurisdiction of the state and federal courts in the County of Hillsborough,
Florida, for purposes of any action to enforce, or for a breach of, this
Agreement.
21. Counterparts
and Facsimile Execution.
This
Agreement may be executed and delivered (a) in one or more counterparts,
each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument, and/or (b) by facsimile, in which
case
(i) the instrument so executed and delivered shall be binding and effective
for
all purposes, and (ii) the parties shall nevertheless exchange substitute
hard
copies of such facsimile instruments as soon thereafter as practicable (but
the
failure to do so shall not affect the validity of the instruments executed
and
delivered by facsimile).
22. Entire
Agreement.
This
Agreement constitutes the entire agreement between the Company and Executive
and
this Agreement shall supersede any prior written or oral agreements,
understandings, or arrangements between the parties regarding any of the
items
addressed in the sections above, except the terms of the Restrictive Covenant
Agreement, the Equity Agreements and the Confidentiality Agreement, which
agreements shall remain in full force and effect. Any modifications to this
Agreement must be done in writing and signed by both parties.
23. Miscellaneous.
(a)
Should
any provision of this Agreement be declared or determined by any court to
be
illegal or invalid, the validity of the remaining parts, terms, or provisions
shall not be affected thereby and said illegal or invalid part, terms, or
provisions shall be deemed not to be a part of this Agreement.
(b) As
used
in this Agreement, the masculine, feminine or neuter gender, and the singular
or
plural number, shall be deemed to include the others whenever the context
so
indicates or requires.
IN
WITNESS WHEREOF, Executive and a duly authorized representative of the Company
hereby certify that they have read this Agreement in its entirety and
voluntarily executed it in the presence of competent witnesses, as of the
date
set forth under their respective signatures.
|
EMPLOYEE
/s/ XXXXXX XXXXXXX
Xxxxxx
Xxxxxxx
5/15/07
Date
/s/ XXXXX X. XXXXXXX
Witness
5/17/07
Date
|
COMPANY
COMPREHENSIVE
HEALTH MANAGEMENT, INC.
By:
/s/
XXXXXXXX XXXXXXX
Xxxxxxxx
Xxxxxxx, Senior Vice President and
General Counsel
5/15/07
Date
/s/ XXXXXXX
XXXXX
Witness
5/15/07
Date
|
