RETIREMENT AGREEMENT
Exhibit
10.1
This Retirement Agreement (“Agreement”)
is entered into as of July 1, 2010 (“Effective Date”), by and between Conmed
Healthcare Management, Inc., a Maryland corporation (the “Company”), and Xxxxxx
X. Xxxx, M.D. (“Xx. Xxxx”).
WHEREAS, the parties have previously
entered into that certain Employment Agreement dated as of January 26, 2007;
and
WHEREAS, except as otherwise expressly
provided herein, and except with respect to Paragraphs 5.2(c) and
(c)(i), (c)(ii), and (c)(iii), (d), (e) and (f) of the January 26, 2007
Agreement (relating to period of non-competition, non-solicitation, and
non-defamation, and remedies therefor), the January 26, 2007 Employment
Agreement is being terminated and this Retirement Agreement is intended to
substitute therefor.
In consideration of the mutual
covenants and conditions set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. Employment. (a) Employment. For
the period July 1, 2010 through August 31, 2010, the Company hereby employs Xx.
Xxxx in the capacity of Chief Medical Officer of the Company, reporting directly
to the President and Chief Executive Officer of the Company. Xx. Xxxx
accepts such employment and agrees to perform such roles and provide such
management and other services for the Company as are customary to such office
and such additional responsibilities, consistent with his position as the Chief
Medical Officer, as may be assigned to him from time to time by the President
and Chief Executive Officer of the Company. Employee shall be
entitled to all salary and other benefits under the January 26, 2007 Employment
Agreement during this two (2) month term. At the conclusion of this period, Xx.
Xxxx shall surrender to the Company the corporate credit card currently assigned
and shall obtain reimbursement for further expenses in accordance with Paragraph
4.3, below.
(b) Retirement. For
the period September 1, 2010 through February 28, 2011 (the “Term”), the Company
shall pay Xx. Xxxx the total sum of $125,000 (“Retirement
Payment”). The Retirement Payment shall be paid in installments
either every two weeks or twice per month based on and in accordance with the
Company’s regular payroll procedures, during the Term. Said payments shall be
treated as compensation with appropriate withholding and a Form W-2 issued for
the corresponding tax years. Additionally, said payments shall be conditioned
upon execution of the Release previously negotiated and agreed and attached to
the Employment Agreement as Exhibit A, except that Conmed, Inc. shall be
substituted for PACE Health Management Systems, Inc. as the named party
therein.
2. Independent
Contractor. Beginning September 1, 2010 until terminated in
accordance with Section 5 hereof, Xx. Xxxx shall be retained as an independent
contractor. Xx. Xxxx agrees to perform such roles and provide such
services for the Company, if any, as the Company may reasonably assign to him
from time to time by the President and Chief Executive Officer of the
Company.
3. Obligation for Co-operation in
Litigation. Xx. Xxxx agrees that so long as this Agreement
remains in effect, he shall co-operate fully in conjunction with the defense of
any litigation against the Company, any of its employees, and any of the
governmental entities to whom the Company provides healthcare services relating
to the rendering of healthcare services or the management/supervision of
healthcare personnel. Xx Xxxx will be compensated as an Independent contractor
as specified herein for his participation and
cooperation.
4. Compensation and Benefits as
Independent Contractor.
4.1 Cash
Compensation. For the performance of Xx. Xxxx’x duties
hereunder as an Independent Contractor, the Company shall pay Xx. Xxxx the total
sum of $1,200 per day or portion of a day (“I.C. Payments”). The I.C.
Payments shall be paid in installments either every two weeks or twice per
month, based on and in accordance with Company’s regular payroll procedures,
during the Term. The parties agree that the compensation under this Paragraph
shall be in addition to the Retirement Payment under Paragraph 1.b. above.
However, taxes shall be withheld and reporting shall be made consistent with the
Retirement Payments despite referral to the status herein as “Independent
Contractor.”
4.2 Bonus Plan.
(a) During
the period January 1, 2010 through August 31, 2010, Xx. Xxxx shall be entitled
to continued participation in the bonus compensation plan further defined in
Section 3.2(b). Any bonus or incentive compensation paid to Xx. Xxxx
shall be in addition to Salary and Retirement Payment. All
compensation earned by Xx. Xxxx, including any bonus as an employee, shall be
subject to all applicable state and federal tax obligations. Xx. Xxxx
shall be solely responsible for all applicable state and federal tax obligations
for the I.C. Payments.
(b) Xx.
Xxxx shall be eligible annually for a bonus to be approved by the
Board. The amount of the bonus shall be equal to a value of up to 20%
of Xx. Xxxx’x total compensation paid by Company during the period January 1,
2010 through August 31, 2010. Xx. Xxxx’x bonus, as earned, shall be
payable in the form of cash and/or shares of the Company’s capital stock issued
by the Company, as shall be determined in the sole discretion of the Board, at
the later of (i) the end of the first fiscal quarter of the Company following
the end of the period for which the bonus was earned, or (ii) upon the issuance
of the independent auditors report for the period ending when the bonus was
earned.
4.3 Reimbursement of Expenses as an
Independent Contractor. Xx. Xxxx shall be entitled to be
reimbursed for all reasonable expenses as described in accordance with Company
policy, including but not limited to expenses for travel for business, as
appropriate, and business meals and entertainment, incurred by Xx. Xxxx in
performing his tasks, duties and responsibilities under Sections 2, or otherwise
as approved in advance by the Company in connection with and reasonably related
to the furtherance of the Company’s business. The Company shall
reimburse Xx. Xxxx for travel expenses for approved or assigned business
purposes, including but not limited to, tolls, gasoline and
parking. Xx. Xxxx shall submit expense reports and receipts
documenting the expenses incurred in accordance with Company policy, and the
Company shall remit payment in accordance with its ordinary procedures through
its payroll process. The Company’s obligation to reimburse authorized
expenses incurred or accrued prior to termination of Xx. Xxxx’x service as an
independent contractor hereunder, whether by the Company with or without Cause
or by Xx. Xxxx with or without Good Reason (“Cause”, “without Cause” and “Good
Reason” are defined in Section 5.1 of the original Employment Agreement and
those definitions are incorporated herein), shall survive any such
termination.
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4.4 Additional Benefits During period of
Service as Independent Contractor. Xx. Xxxx shall be permitted
to retain at Company expense the Blackberry currently in his possession for use
during his term of service as an independent contractor. Xx. Xxxx shall also be
permitted to retain the laptop computer currently in his possession during the
period of service as an independent contractor. Further, in exchange for Xx.
Xxxx maintaining his license(s) to practice medicine, the Company agrees to
maintain the cost of such licensure(s) and shall include Xx. Xxxx on the Conmed
Malpractice Insurance coverage.
4.5 Continuation of Life Insurance.
As provided in Paragraph 3.4 of the Employment Agreement, the Company
shall continue in force and effect for six months from September 1, 2010 any
life insurance benefits to which Xx. Xxxx was entitled in his role as Chief
Medical Officer.
5. Termination. Either
party may terminate the independent contractor arrangement with 30 days’ written
notice to the other.
6. Non-Disclosure. Xx.
Xxxx agrees to execute the confidentiality Agreement attached as Exhibit B with
respect to confidential information of the Company and to abide by its
terms.
7. General
Provisions
7.1 Assignment. Neither
party may assign or delegate any of his or its rights or obligations under this
Agreement without the prior written consent of the other party.
7.2 Entire
Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior written and verbal agreements between the parties.
7.3 Modifications. This
Agreement may be changed or modified only by an agreement in writing signed by
both parties hereto.
7.4 Successors and
Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and permitted
assigns and Xx. Xxxx and Xx. Xxxx’x legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join and be bound by the terms and conditions hereof.
7.5 Governing Law. This
Agreement shall be governed by, construed and enforced in accordance with, the
laws of the State of Maryland, and venue and jurisdiction for any disputes
hereunder shall be heard in any court of competent jurisdiction in Maryland for
all purposes.
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7.6 Severability. If
any provision of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect.
7.7 Further
Assurances. The parties will execute such further instruments
and take such further actions as may be reasonably necessary to carry out the
intent of this Agreement.
7.8 Notices. Any
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed received by the recipient when delivered personally
or, if mailed, five (5) days after the date of deposit in the United States
mail, certified or registered, postage prepaid and addressed, in the case of the
Company, to its corporate headquarters, attention Chairman of the Board, and in
the case of Xx. Xxxx, to the address shown for Xx. Xxxx on the signature page
hereof, or to such other address as either party may later specify by at least
ten (10) days advance written notice delivered to the other party in accordance
herewith.
7.9 No Waiver. The
failure of either party to enforce any provision of this Agreement shall not be
construed as a waiver of that provision, nor prevent that party thereafter from
enforcing that provision of any other provision of this Agreement.
7.10 Legal Fees and
Expenses. In the event of any disputes under this Agreement,
the prevailing party or parties shall be reimbursed by the party or parties who
do not prevail for their reasonable attorneys, accountants and expert fees and
related expenses and for the costs of such proceeding.
7.11 Counterparts. This
Agreement may be executed by exchange of facsimile signature pages and/or in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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of page intentionally left blank)
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IN
WITNESS WHEREOF, the Company and Xx. Xxxx have executed this Agreement,
effective as of the day and year first above written.
By:
/s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx
X. Xxxxxx, Ph.D., Chairman and CEO
Address:
0000
Xxxxxxx Xx.
Xxxxxxx,
XX 00000
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X.
Xxxx, M.D.
Address:
000
Xxxxxxx Xxxxx Xxxxx
XxXxxxx,
XX 00000-0000
