SEPARATION AGREEMENT
Exhibit 10.66
This Separation Agreement (this “Agreement”) is effective as of the 1st day of January, 2013 (the “Effective Date”), by and between W. Xxxxx Xxxxxx (“Executive”) and Allscripts Healthcare Solutions, Inc., a corporation organized and existing under the laws of the State of Delaware (“Company”). Terms used in this Agreement but not specifically defined herein shall have the same meaning as in the Employment Agreement (defined below).
WHEREAS, Company and Executive entered into an Employment Agreement dated May 16, 2012 (the “Employment Agreement”), a copy of which is attached hereto as Exhibit A; and
WHEREAS, Company and Executive desire to set forth the terms of Executive’s remaining employment with Company, his termination of employment, severance benefits, and other matters related thereto.
NOW, THEREFORE, in consideration of the foregoing premises, of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Termination Date. Executive’s employment with Company will terminate effective as of the close of business on June 3, 2013 (the “Termination Date”). As of the Termination Date, Executive’s employment with Company is terminated and Executive irrevocably resigns from all other positions with any subsidiaries and affiliated companies of Company.
2. Employment Agreement. Executive’s Employment Agreement remains in full force and effect until the Termination Date, except as modified by this Agreement. Executive expressly waives his right to any payment or benefits pursuant to Sections 3.6 and 4.5.2 (“Payment upon a Change of Control with No Comparable Job” and “Severance Upon Termination following a Change of Control,” respectively) of the Employment Agreement, and such sections are hereby deleted from the Employment Agreement.
3. Transition Period. During the period beginning on the Effective Date and ending on the Termination Date (the “Transition Period”), the parties agree to the following:
(a) Duties. Executive shall serve as Company’s Senior Vice President, Finance and have the duties and responsibilities, and perform such administrative and managerial services, as shall be reasonably delegated or assigned to Executive by the Chief Financial Officer of Company or his delegate, which duties shall generally include, but not be limited to, the diligent and cooperative transition of Executive’s duties to another or others as directed. Notwithstanding the foregoing, Company shall have the right to relieve Executive of any or all duties to be performed prior to the Termination Date.
(b) Salary and Benefits. Executive shall continue to receive his Base Salary as in effect on the Effective Date and to participate in any benefit plans that were provided to Executive under Section 3.3 (“Benefits”) of the Employment Agreement.
(c) Expenses. Company shall reimburse Executive for proper and necessary expenses incurred by Executive during the Transition Period in the performance of his duties under this Agreement from time to time per the standard policies and procedures of Company with respect to such expenses.
(d) Transition Bonus. Provided Executive has remained employed by Company through the Termination Date, Company shall pay the Executive a transition bonus of $37,009 (the “Transition Bonus”), subject to all appropriate federal and state withholding taxes. The Transition Bonus shall be paid on Company’s first regular payroll date following the sixtieth (60th) day after the Termination Date.
(e) Termination of Employment during Transition Period.
(i) If during the Transition Period Executive’s employment with Company terminates pursuant to Section 4.1 or 4.2 of the Employment Agreement (“Termination upon Death or Disability of Executive” or “Termination by Company for Cause,” respectively), or Executive’s employment is terminated by the Company without Cause pursuant to Section 4.3 of the Employment Agreement (“Termination by Company without Cause; Termination by Executive without Constructive Discharge”), then this Agreement shall be void ab initio and the provisions of the Employment Agreement shall be in full force and effect and control the terms of such termination.
(ii) If during the Transition Period Executive voluntarily resigns his employment with Company pursuant to Section 4.3 of the Employment Agreement, the provisions of Section 4.5.3 of the Employment Agreement (“Termination With Cause by Company or Without Constructive Discharge by Executive”) shall control the terms of such termination and Executive shall receive no severance benefits; provided that, if Executive gives Company sixty (60) days’ prior written notice of his voluntary resignation, then, subject to Executive’s compliance with the terms of this Agreement, including without limitation Sections 6(b), 7, 8, 9, 10 and 12, Company shall pay to Executive:
(1) The payments and benefits set forth in Sections 4.5.1(i), 4.5.1(iii) and 4.5.1(iv) of the Employment Agreement, which shall be paid or provided as specified therein, following the date of Executive’s termination due to voluntary resignation (the “Voluntary Resignation Date”); and
(2) If Executive voluntarily resigns prior to his receipt of the Retention Bonus under Section 3.2.2 of the Employment Agreement, an amount equal to the Retention Bonus on the sixtieth (60th) day following the Voluntary Resignation Date.
(iii) Notwithstanding anything contained in this Agreement or the Employment Agreement to the contrary, Executive shall have no right to terminate employment pursuant to Section 4.4 of the Employment Agreement (“Termination by Executive for Constructive Discharge”).
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4. Severance Benefits after the Transition Period. Subject to Executive’s compliance with the terms of this Agreement, including without limitation Sections 6(b), 7, 8, 9, 10 and 12, after the Termination Date, Executive shall receive the payments and benefits set forth in Section 4.5.1 of the Employment Agreement, which are described and shall be paid or provided in accordance with Schedule 1 attached to this Agreement.
5. No Other Payments. Executive expressly acknowledges and agrees that, other than as specifically provided for in this Agreement, including benefits due to Executive under any employee benefit plan, no additional payments or benefits, including severance payments or benefits, are due from Company on any basis whatsoever.
6. Release.
(a) The pay and benefits provided under Sections 3(b)-(d) of this Agreement are subject to Executive’s execution of (without revocation) and delivery to Company by the forty-fifth (45th) day following the Effective Date of a release and waiver of all claims (the “Release”) up to the date of the Release with such Release in the form attached hereto as Exhibit B.
(b) The pay and benefits provided under Section 3(e)(ii) or 4 of this Agreement are subject to Executive’s execution of (without revocation) and delivery to the Company by the forty-fifth (45th) day following the Voluntary Resignation Date or Termination Date, as applicable, of a Release providing a release and waiver of all claims up to the date of the Release; the Release shall be provided to Executive by Company and shall be substantially in the form attached hereto as Exhibit B.
7. Restrictive Covenants. Executive expressly acknowledges and agrees that Section 5 (“Restrictive Covenants”) of the Employment Agreement remains in full force and effect as provided therein.
8. Return of Company Property. Executive represents and warrants that, on or before the Termination Date or Voluntary Resignation Date, as applicable, Executive shall return to Company all Company property and information in any form (whether, paper, electronic media or otherwise), and not retain copies of any such property or information (excluding, however, information relating solely to Executive’s own employment, compensation and benefits).
9. Non-Disparagement. Executive agrees not to make any adverse or disparaging comments (oral or written, including but not limited to, via any form of electronic media) about Company, its affiliates, or any of their respective officers, directors, managers or employees which may tend to impugn or injure their reputation, goodwill and relationships with their past, present and future customers, employees or vendors or with the business community generally. Nothing in this Section 9 is intended to prohibit, limit or prevent Executive from providing truthful testimony in a court of law, to a regulatory or law enforcement agency or pursuant to a properly issued subpoena, and such testimony would not be deemed to be a violation of this Section 9.
10. Cooperation. Executive agrees to cooperate, subject to reimbursement by Company of reasonable out of pocket costs and expenses, with Company and its counsel with respect to any matter (including any litigation, investigation or governmental proceeding) which relates to matters with which Executive was involved during his employment with Company.
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Such cooperation shall include appearing from time to time at the offices of Company or Company’s counsel for conferences and interviews and in generally providing the officers of Company and its counsel with the full benefit of Executive’s knowledge with respect to any such matter. Executive agrees to render such cooperation in a timely fashion and at such times and places as may be mutually agreeable to the parties.
11. Waiver of Any Re-Employment Right. Executive waives all interest in and right to reinstatement or re-employment with Company and any of its affiliates and agrees that any application for re-employment may be rejected without explanation or liability pursuant to this provision.
12. Nondisclosure. Executive shall not disclose or cause to be disclosed the terms of this Agreement or the negotiations leading to it to any person (other than to his spouse, attorneys or tax advisors, who shall also be bound by this nondisclosure provision), except pursuant to a lawful subpoena or as otherwise required by law.
13. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding upon each of the parties and upon their respective heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of each party and to their respective heirs, administrators, representatives, executors, successors and assigns.
(b) Applicable Law. This Agreement shall be construed in accordance with the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction.
(c) Dispute Resolution. Executive expressly acknowledges and agrees that Section 7.9 (“Dispute Resolution and Arbitration”) of the Employment Agreement remains in full force and effect and shall apply to this Agreement.
(d) Scope of Agreement. This Agreement and, as indicated, the Employment Agreement reflect the entire agreement between Executive and Company with respect to the terms and conditions of Executive’s employment relationship with Company and the termination of such employment relationship and, except as specifically provided herein, supersede all prior agreements and understandings, written or oral relating to the subject matter hereof.
(e) Notices. Any notice pertaining to this Agreement shall be in writing and shall be given in accordance with Section 7.6 of the Employment Agreement.
(f) Waiver of Breach. The waiver by either party to this Agreement of a breach of any provision of this Agreement shall not operate as or be deemed a waiver of any subsequent breach by such party. Continuation of benefits hereunder by Company following a breach by Executive of any provision of this Agreement shall not preclude Company from thereafter exercising any right that it may otherwise independently have to terminate said benefits based upon the same violation.
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(g) Amendment. This Agreement may not be modified or amended except by a writing signed by the parties to this Agreement. In the event the parties amend this Agreement to extend the Termination Date hereunder, Schedule 1 attached hereto shall be concurrently amended to reflect the adjusted equity vesting and forfeitures resulting from the extended Termination Date.
(h) Counterparts. This Agreement may be signed in multiple counterparts, each of which shall be deemed an original. Any executed counterpart returned by facsimile or PDF shall be deemed an original executed counterpart.
(i) No Third Party Beneficiaries. Unless specifically provided herein, the provisions of this Agreement are for the sole benefit of the parties to this Agreement and are not intended to confer upon any person not a party to this Agreement any rights hereunder.
(j) Terms and Construction. Each party has cooperated in the drafting and preparation of this Agreement. The language in all parts of this Agreement shall be in all cases construed according to its fair meaning and not strictly for or against either party.
(k) Admissions. Nothing in this Agreement is intended to be, or will be deemed to be, an admission of liability by Executive or Company to each other, or an admission that they or any of their agents, affiliates, or employees have violated any state, federal or local statute, regulation or ordinance or any principle of common law of any jurisdiction, or that they have engaged in any wrongdoing towards each other.
(l) Withholding. Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to applicable laws or regulations.
(m) Severability. The holding of any provision of this Agreement to be illegal, invalid or unenforceable by a court of competent jurisdiction shall not affect any other provisions of this Agreement, which shall remain in full force and effect.
(n) Section 409A of the Code. Executive expressly acknowledges and agrees that Section 7.14 (“Section 409A of the Code”) of the Employment Agreement remains in full force and effect and shall apply to this Agreement. Executive is a “specified employee” of Company and its affiliates (as defined in Treasury Regulation Section 1.409A-1(i)), and Executive is therefore subject to a delay in payment until six months after the date of Executive’s separation from service from Company (pursuant to Treasury Regulation Section 1.409A-3(i)(2)(ii)) to receive payments provided hereunder to the extent such amounts are subject to, and not exempt from, Section 409A. If the sixty (60)-day period following a “separation from service” begins in one calendar year and ends in a second calendar year (a “Crossover 60-Day Period”), then any severance payments that would otherwise occur during the portion of the Crossover 60-Day Period that falls within the first year will be delayed and paid in a lump sum during the portion of the Crossover 60-Day Period that falls within the second year. The Company shall not have any obligation to indemnify or otherwise protect Executive from the obligation to pay any taxes pursuant to Section 409A.
Signature page is the next page.
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Signature page to Separation Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as of the date first set forth above.
| ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. |
| /s/ XXXX XXXXXXX |
| Xxxx Xxxxxxx |
| Chief Financial Officer |
| EXECUTIVE: |
| /s/ W. XXXXX XXXXXX |
| W. Xxxxx Xxxxxx |
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SCHEDULE 1
CASH PAYMENTS
| Amount Payable |
Date[s] Payable |
Comments | ||
| $525,000 | Paid in twelve equal monthly installments with the first two installments to be paid on the sixtieth (60th) day following June 3, 2013 (the “Termination Date”) and the remaining ten installments to be paid on the ten following monthly anniversaries of such date.1 |
Constituting 12 months of payments in an amount totaling Executive’s Base Salary plus Executive’s Target Performance Bonus as required by Section 4.5.1(i) of the Employment Agreement. |
BENEFITS CONTINUATION
| Benefits Description |
Continuation Period | |
| Continuation of Executive’s enrollment in health and/or dental insurance benefits immediately prior to the Termination Date, with Executive contributing to such benefits as if he were employed by Company. | Until the earlier of: (i) the end of the 12-month period following the Termination Date (i.e., through June 3, 2013); or (ii) Executive’s failure to make a required contribution within 10 days of written notice; or (iii) the date on which Executive becomes eligible to receive comparable benefits from a subsequent employer. |
| 1 | Although Executive is a Specified Employee under Section 409A, his cash payments are structured to fall within certain exceptions to Section 409A, and so are not subject to the six-month delay applicable to payments of deferred compensation to Specified Employees. |
EQUITY AWARD VESTING AND FORFEITURE
| Award |
Vesting Per Sec. 4.5.1(iii) of Employment Agreement or Award |
Delivery of Shares |
Forfeited from Award |
|||||||||
| 1. | 8/14/2009 Option Grant (20,999 granted) | 5,250 | 2 | N/A3 | 0 | |||||||
| 2. | 8/14/2009 RSA Grant (3,500 granted) |
875 | 4 | Sixtieth (60th) day following the Termination Date |
0 | |||||||
| 3. | 2/1/2011 RSU Grant (14,138 granted) |
4,716 | Sixtieth (60th) day following the Termination Date |
2,353 | ||||||||
| 4. | 5/1/2012 RSU Grant (27,448 granted) |
7,482 | Sixtieth (60th) day following the Termination Date |
13,104 | ||||||||
| 5. | 5/1/2012 PSU Grant (4,506 granted) |
2,253 | * | Upon certification of performance by Compensation Committee (but no earlier than the sixtieth (60th) day following the Termination Date). |
0 | * | ||||||
| 6. | 5/1/2012 RSU Grant (22,873 granted)
(Retention Award; full vest upon termination without Cause, per Sec. 3.5.2 of Employment Agreement) |
17,155 | Sixtieth (60th) day following the Termination Date |
0 | ||||||||
| * | Provided Non-GAAP Net Income Per Share for 2012 is at least $0.45 and upon certification by Compensation Committee. |
| 2 | Award agreement not available; accelerated vesting based on assumed 4 year vesting schedule. |
| 3 | Post-termination exercise period unknown, as award agreement not available. |
| 4 | Award agreement not available; accelerated vesting based on assumed 4 year vesting schedule. |
EXHIBIT A
EMPLOYMENT AGREEMENT
EXHIBIT B
GENERAL RELEASE
WHEREAS, this General Release (this “Release”) is given by W. Xxxxx Xxxxxx (“Executive”) on the date indicated below at Executive’s signature, pursuant to the Separation Agreement between Allscripts Healthcare Solutions, Inc. (the “Company”) and Executive dated as of January , 2013 (the “Agreement”); and
WHEREAS, in consideration for the payments and benefits provided by Company to Executive under the Agreement, which are conditioned upon his execution of a release and waiver of claims for the benefit of Company, Executive agrees to execute this Release.
NOW THEREFORE, in consideration of the mutual covenants contained under the Agreement and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and intending to be legally bound, Executive agrees as follows:
1. In exchange for the benefits described in the Agreement, Executive hereby agrees to WAIVE any and all rights in connection with, and to fully RELEASE and forever discharge Company and its predecessors, parents, subsidiaries, divisions, related or affiliated companies, benefit plans, plan administrators and other plan fiduciaries, officers, directors, stockholders, members, employees, heirs, successors, assigns, representatives, agents and counsel (the “Released Parties”) from any and all torts, contracts, claims, suits, actions, causes of action, demands, rights, damages, costs, expenses, attorneys’ fees, and compensation in any form whatsoever, whether now known or unknown, in law or in equity, which Executive has or ever had (from the beginning of time through and including the date hereof) against any of the Released Parties, including without limitation on account of or in any way arising out of, relating to or in connection with Executive’s employment by or separation of employment from any of the Released Parties, and any and all claims for damages or injury to any entity, person, property or reputation arising therefrom, claims for wages, employment benefits, tort claims and claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Employee Retirement Income Security Act of 1974 (except that Executive does not waive his right to receive notices and vested monies and benefits due under any employee retirement or medical benefit plan), the National Labor Relations Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, the Americans with Disabilities Act of 1990 and any other federal, state or local law, statute, ordinance, guideline, regulation, order or common-law principle of any state relating to employment, employment contracts, wrongful discharge or any other matter; provided, however, that the foregoing waiver and release shall not apply to Executive’s rights in respect of any benefit or claim to which Executive is entitled under employee pension or welfare benefit plans and programs of the Released Parties in which Executive is a participant prior to the date below, or to Executive’s rights to enforce the Agreement.
1. Release of Age Discrimination Claims. In further consideration of the promises made by Company in the Agreement, Executive specifically WAIVES any and all rights in connection with, and fully RELEASES and forever discharges the Released Parties from, any and all torts, contracts, claims, suits, actions, causes of action, demands, rights, damages, costs,
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expenses, attorneys’ fees, and compensation in any form whatsoever, whether now known or unknown, in law or in equity, which Executive has or ever had (from the beginning of time through and including the date hereof) against any of the Released Parties, arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Sec. 621, et seq. (“ADEA”). Executive further agrees that:
(a) Executive’s waiver of rights under this Release is knowing and voluntary and in compliance with the Older Workers Benefit Protection Act of 1990;
(b) Executive understands the terms of this Release;
(c) the consideration provided in the Agreement represents consideration over and above that to which Executive otherwise would be entitled, that the consideration would not have been provided had Executive not signed this Release, and that the consideration is in exchange for the signing of this Release;
(d) Company is hereby advising Executive in writing to consult with Executive’s attorney prior to executing this Release;
(e) Company is giving Executive a period of at least forty-five (45) days within which to consider this Release;
(f) following the execution of this Release Executive has seven (7) days in which to revoke this Release by written notice. To be effective, the revocation must be made in writing and delivered to and received by the Senior Vice President, Human Resources, Allscripts Healthcare Solutions, Inc., 0000 Xxx Xxxxx Xxxx, Xxxxxxx, XX 00000, no later than 4:00 p.m. on the seventh day after Executive executes this Release. An attempted revocation not actually received by the Chief Executive Officer before the revocation deadline will not be effective; and
(g) this entire Release shall be void and of no force and effect if Executive chooses to so revoke, and, if Executive chooses not to so revoke, this Release shall then become fully effective and enforceable.
This Section 2 does not waive rights or claims that may arise under the ADEA after the date Executive signs this Release. In addition, nothing in this Release shall in any way affect Executive’s right to indemnification and expense advancement to the extent provided by Company’s operating agreement or other applicable policies; provided, however, that Company shall not be liable, and shall not provide a defense and indemnification for any claim wherein Executive has not satisfied the applicable standard of conduct set forth in such operating agreement or other applicable policies, or wherein Executive has committed any acts of fraud, embezzlement or gross misconduct.
2. Proceedings; No Admissions.
(a) Executive hereby represents and warrants that he has no pending claims against any of the Released Parties with any municipal, state, federal or other governmental or nongovernmental entity. Notwithstanding anything to the contrary, this Release shall not prevent Executive from (A) initiating or causing to be initiated on Executive’s behalf any complaint,
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charge, claim or proceeding against any of the Released Parties before any local, state or federal agency, court or other body challenging the validity of the waiver of Executive’s claims under the ADEA contained in this Release (but no other portions of the waivers and releases described in Sections 1 or 2); or (B) initiating or participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission with respect to the ADEA.
(b) Both parties acknowledge and agree that this Release does not constitute, is not intended to be, and shall not be construed, interpreted or treated in any respect as, and shall not be admissible in any proceeding as, an admission of liability, error, violation, omission or wrongdoing by either party for any purpose whatsoever. Further, both parties acknowledge and agree that there has been no determination that either party has violated any federal, state or local law, statute, ordinance, guideline, regulation, order or common-law principle. Executive further acknowledges that no precedent, practice, policy or usage shall be established by this Release or the offer to Executive of compensation and benefits in the Agreement.
3. Effect of Claim. Executive also understands and agrees that in the event Executive, by himself, or in conjunction with Executive’s heirs, spouse, family members, executors, or administrators attempt to institute or do institute any charge, claim, suit or action against any of the Released Parties in violation of this Release, Executive shall be obligated, as an express condition of bringing such action, to tender back to Company the full amount of the compensation and benefits that Executive has received under the Agreement; and Executive further agrees that Executive will pay all of the Released Parties’ costs, expenses and fees of defending against such action, including, among other things, reasonable attorneys’ fees. The immediately prior sentence does not apply to claims under ADEA or to challenge the release of ADEA claims under this Release; provided, however, nothing in this Release is intended to reflect any party’s belief that Executive’s waiver of claims under ADEA is invalid or unenforceable under this Release, it being the intent of Executive and Company that such claims are waived. This Section 3 does not grant Executive an option to return the money and institute an action. Instead this paragraph merely creates an additional term and condition precedent to bringing an action regardless of the fact that such action is expressly barred by this Release, and is without merit.
4. Executive’s Right to Enforce Agreement. Nothing in this Release shall be construed as a waiver or release by Executive of any claim or right to enforce the terms of the Agreement or to bring a claim for damages arising out of Company’s breach of the Agreement.
IN WITNESS WHEREOF, Executive has executed and delivered this Release on the date set forth below.
| Date: | ||||||||||
| W. Xxxxx Xxxxxx |
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