EXHIBIT 10.23
SEPARATION AGREEMENT
AND
GENERAL RELEASE
WellChoice, Inc. (hereinafter "WellChoice"), a New York corporation
with its principal place of business at Eleven Xxxx Xxxxx-Xxxxxx Xxxxxx, Xxx
Xxxx XX 00000, and Xxxxx X. Xxxx, Xx. (hereinafter "you") hereby agree as
follows:
1. The termination of your employment with WellChoice is hereby
agreed to have occurred by resignation effective January 3, 2003, and you will
receive your full salary payable through that date. Payment for any accrued and
unused vacation time as of the date of your termination of employment will be
made by WellChoice under the terms of the WellChoice Flexible Benefits Plan (the
"Flexible Benefits Plan") within a reasonable time period after your termination
date.
2. Except as otherwise expressly provided herein, you agree to
release WellChoice and its subsidiaries and affiliates, including but not
limited to Empire HealthChoice Assurance, Inc., d/b/a, Empire Blue Cross Blue
Shield, Empire HealthChoice HMO, Inc. and any of their related corporations,
their respective former, present and future agents, directors, officers,
employees, representatives, successors and assigns (hereinafter "those
associated with WellChoice") from any and all claims, demands, actions or
liabilities, known or unknown, and of whatever kind, that you now have or ever
had against WellChoice or those associated with WellChoice, including but not
limited to those related to your employment with WellChoice or your separation
from employment, including but not limited to, any claims arising under the Age
Discrimination in Employment Act of 1967, as amended, Title VII of the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Employee Retirement Income Security Act, and any other
federal, state or local statute, law, regulation, rule, ordinance or order, any
claims based on theories of contract or tort, whether based on common law or
otherwise, any claims under the WellChoice Long Term Incentive Plan, or any
severance or other employee benefit plan or guidelines implemented or to be
implemented by WellChoice or those associated with WellChoice at any time until
your termination date, provided, however, that this release does not include
your vested rights, if any, under the WellChoice Pension Plan, the WellChoice
401(k) Plan, the WellChoice Deferred Compensation Plan, the WellChoice Executive
Savings Plan, or the indemnification provisions set forth in WellChoice's
By-Laws, all of which survive unaffected by this separation agreement and
release. WellChoice represents and warrants that neither its Chief Executive
Officer nor its General Counsel is aware of any claims currently pending or
threatened against you in connection with your employment by WellChoice and has
no present intention of bringing any claims against you.
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3. You agree, except with respect to claims for non-monetary relief
brought under any federal, state or local anti-discrimination laws, not to
initiate any legal action, administrative charge, complaint or arbitration
against WellChoice or those associated with WellChoice in any forum whatsoever,
asserting any claims released by you under paragraph 2 above.
4. WellChoice agrees to provide you with severance in the amount of
$650,000.00, which will be apportioned into bi-weekly installments for a period
of fifty-two (52) weeks following the date of your termination of employment
(the "salary continuation period"), with the first payment to be made on the
first payroll date not less than seven (7) days nor more than twenty-one (21)
days following the date you sign and return this separation agreement and
release. In the event of your death during the salary continuation period, such
payments shall thereafter be made to your estate for the balance of the salary
continuation period.
5. WellChoice agrees to provide you with a one-time lump sum payment
of $238,926.00 in settlement of any claim you may have at any time under any
Empire or WellChoice Long Term Incentive Plan. Such payment will be made within
thirty (30) days following your execution of this separation agreement and
release.
6. WellChoice shall withhold from the payments described in
paragraphs 4 and 5 above the appropriate payroll taxes and such deductions as
have been elected by you under WellChoice's Flexible Benefits Plan.
7. Unless you revoke your existing elections of your hospital,
medical, dental and life insurance benefits under the terms of the Flexible
Benefits Plan upon termination of employment, WellChoice will continue these
benefits during the salary continuation period in the same manner as if your
employment had not been terminated (with the net cost to you of such benefits
being deducted from your salary continuation payments in the same manner as
before your termination of employment). You acknowledge that WellChoice reserves
the right to require contributions from employees for themselves and/or their
covered dependents under all of these Plans, and that any such contributions may
be increased at any time at the discretion of WellChoice. Following the salary
continuation period, you shall be entitled to continue coverage under the health
care plans at your own expense in accordance with the requirements of COBRA.
8. You shall be entitled to receive outplacement services, at
WellChoice expense, as set forth on Exhibit A hereto. WellChoice also shall
reimburse the reasonable attorneys' fees incurred by you in connection with your
consultation regarding this separation agreement and release, up to a maximum of
$16,885.00.
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9. You agree not to divulge the terms of this separation agreement
and release except to your immediate family, tax advisor(s) or counsel, unless
required by subpoena or other legal compulsion, or unless such terms become a
matter of public knowledge through no act of your own. This paragraph does not
prohibit your disclosure of the terms, amount or existence of this agreement to
the extent necessary to enforce this Agreement.
10. Entry into this separation agreement and release by WellChoice
and you and payment by WellChoice of the aforementioned consideration is not an
admission by WellChoice of any violation of any federal, state or local statute,
law, regulation, rule, ordinance or order, and is not an admission by you of any
wrongdoing or failure of performance.
11. You warrant that you are fully competent to enter into this
separation agreement and release, and you acknowledge that you have been advised
that you should review this separation agreement and release with an attorney
and that you have done so, that you have read and understand this separation
agreement and release, and that you have signed this separation agreement and
release freely and voluntarily.
12. Contemporaneous with your execution of this separation agreement
and release, you agree to return to WellChoice all office and equipment keys, ID
and access cards, and WellChoice documents, whether in hard copy, electronic or
other form (except copies of publicly available documents and copies of your
employment, compensation and benefit plan documents).
13. You acknowledge that in the course of your employment you have
had access to confidential or proprietary business information, including trade
secrets, the release of which could cause competitive harm to WellChoice, and
you agree that you will not divulge to any person any such information unless
expressly required by subpoena or other legal compulsion. You also agree that
you will not make any statement that is or may be disparaging to WellChoice or
that has the potential of causing direct or indirect harm to the WellChoice's
business or good will unless required by subpoena or other legal compulsion. You
and WellChoice further agree that any public statements made by either party
concerning your separation from employment shall be substantively consistent
with the press release issued by WellChoice on January 3, 2003, a copy of which
is attached hereto as Exhibit B, with you having further indicated to WellChoice
that your resignation was prompted by your desire to seek a position as a chief
executive officer and that you did not believe it to be fair to WellChoice to do
so while serving as its President and Chief Operating Officer. Following the
seven (7) day revocation period specified in paragraph 19 below, WellChoice
shall provide you with a letter of reference executed by its Chief Executive
officer in the form attached hereto as Exhibit C. Should you wish to have any
reference inquiry responded to orally by WellChoice, you shall advise the
prospective employer to address such inquiry directly to the WellChoice Chief
Executive Officer, whose response shall be substantively consistent with the
above-described letter of reference. Should the WellChoice Chief Financial
Officer or General Counsel receive a reference inquiry, they shall refer the
inquiry to the Chief Executive Officer for response as provided above.
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14. If you commence other employment before the end of the salary
continuation period, you agree to provide written notice to the WellChoice
Senior Vice President, Human Resources, before the employment commencement date,
and your hospital, medical, dental and life insurance benefits under the
WellChoice plans shall cease as of such employment commencement date.
15. In the event that litigation or any regulatory proceeding is
brought by or against WellChoice (or those associated with WellChoice) by any
third party and such litigation concerns you, matters within the scope of your
responsibility or knowledge, or your services to WellChoice or those associated
with WellChoice, you agree to make yourself available at reasonable times to
WellChoice and its counsel to aid in discovery, trial preparation, or responses
to any regulatory investigation, and also to provide written or oral testimony
upon WellChoice's request. WellChoice will reimburse you for your reasonable
out-of-pocket travel and expense costs to the extent such reimbursements are
permitted by law (including a reasonable per diem for consultation time, but not
for time engaged in testifying, after the end of the salary continuation period
if such consultation time interferes with other earnings opportunities).
16. You agree that if WellChoice has reasonable cause to believe that
you have violated any material obligation under this separation agreement and
release, WellChoice may suspend making further payments to you under paragraph 4
above, pending final resolution of such dispute, with the right to take an
offset for any amounts finally determined to be owing by you as provided below.
If it is finally determined that you have violated your obligations under
paragraph 3 above, you shall be liable for all costs and reasonable attorneys'
fees incurred by WellChoice and/or those associated with WellChoice in
connection with such legal proceedings. If it is finally determined that you
have violated your obligations under paragraphs 9, 13 or 15 above, you
acknowledge that WellChoice's damages will not be readily ascertainable and,
therefore, WellChoice shall be entitled to recover liquidated damages in the
amount of $100,000 together with its costs and reasonable attorneys' fees in
establishing such violation.
17. Except as provided herein, WellChoice and those associated with
WellChoice have no further obligation to you for any reason whatsoever.
18. You acknowledge that the payments and benefits described in
paragraphs 4 and 5 above constitute consideration for this separation agreement
and release, in that these are benefits to which you would not have been
entitled had you not signed this separation agreement and release.
19. You acknowledge that you have been given a period of at least
twenty-one (21) days within which to consider this separation agreement and
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release and to review the terms contained herein. This separation agreement and
release is not effective or enforceable until seven (7) days after you sign it.
You may revoke this agreement at any time during the seven (7) days after you
sign it. To revoke, you must deliver a written notice of revocation to Xxxxxxx
X. Xxxxxxx, Chief Executive Officer. This must be done prior to the conclusion
of the seventh (7th) day after you sign the separation agreement and release. If
WellChoice does not receive a written revocation by the end of the seven (7) day
period, this separation agreement and release will become fully enforceable by
WellChoice at that time.
20. This separation agreement and release constitutes the sole and
complete understanding between the parties. This separation agreement and
release may not be amended unless in a writing signed by both parties, and shall
in all respects be construed, enforced and governed by the laws of the State of
New York and any action relating to the separation agreement and release must be
instituted in New York State, with both parties hereby consenting to the
jurisdiction of its courts for such purposes.
21. In case any part of this separation agreement and release shall
be held to be invalid, illegal or otherwise unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
22. You agree that you have executed this separation agreement and
release on your own behalf, and also on behalf of any heirs, administrators,
agents, representatives, successors and assigns.
WELLCHOICE, INC.
/s/ Xxxxx X. Xxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxx
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XXXXX X. XXXX, XX. Xxxxxxx X. Xxxxxxx
Chief Executive Officer
January 13, 2003 1/13/03
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Date Date
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