VOLUNTARY SEPARATION AGREEMENT AND GENERAL RELEASE
This VOLUNTARY SEPARATION AGREEMENT AND GENERAL RELEASE
(the "Agreement"), dated as of the 29th day of October, 2002, is entered into by
and between Genesis Health Ventures, Inc., a Delaware corporation (together with
its subsidiaries and affiliates being collectively referred to herein as the
"Company") and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Executive and the Company are parties to an Employment
Agreement dated as of October 2, 2001 (the "Employment Agreement");
WHEREAS, the Executive has agreed to resign from his employment with the
Company and relinquish his position as Vice Chairman of the Company as of the
Effective Date (as hereinafter defined) upon the terms and conditions of this
Agreement; and
WHEREAS, the Executive and the Company desire to set forth their
understanding of the parties rights and obligations resulting from the Executive
ceasing to be employed by the Company as of the Effective Date.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, intending to be legally bound, the parties
hereto hereby agree as follows:
Section 1. Termination of Employment; Termination Payment.
(a) Termination of Employment. The Executive's employment with the
Company shall terminate as of the close of business on November 3, 2002 (the
"Effective Date"). The Executive shall relinquish his position as Vice Chairman
of the Company, including all duties and responsibilities associated with such
position, as of the Effective Date.
(b) Removal of Personal Property. In no event later than November 3,
2002, the Executive shall remove all personal property from his office at the
Company's corporate offices, including but not limited to the paintings, books
and other artifacts located in such office as of the Effective Date. On and
after November 3, 2002, the Executive shall not maintain an office or presence
at the Company's corporate offices.
(c) Payments and Benefits. In consideration for the Executive's
agreement to be bound by the terms of this Agreement, including but not limited
to Section 4(c) hereof and the Release set forth in Section 2 hereof, the
Executive shall be entitled to receive from the Company the payments and
benefits set forth in subparagraphs (i) through (v) of this Section 1(c),
provided that the Executive shall not have revoked such Release:
(i) on the later of November 3, 2002 or the eighth day after
the Executive's execution of this Agreement, to the extent there has been no
revocation of the Release by the Executive prior to such date (the "Payment
Date"), the Company shall pay the Executive in a lump sum in cash any accrued
and unpaid base salary or deferred compensation in respect of periods through
the Effective Date;
(ii) on the Payment Date, the Company shall pay the Executive a
lump sum in cash in an amount equal to $3,046,750, less applicable withholding,
of which $2,796,750 represents the severance pay the Executive would have been
entitled under Section 7.4 of the Employment Agreement as if the Executive
terminated his employment for "Good Reason" (as such term is defined in the
Employment Agreement) on the Effective Date and (2) $250,000 represents the
Executive's incentive compensation bonus with respect to the 2002 fiscal year of
the Company.
(iii) for a period of two years beginning on the Payment Date,
the Company will continue to provide, on the same basis as executive officers of
the Company generally, the health benefits (but excluding disability benefits)
provided to the Executive and his spouse and eligible dependants immediately
prior to the Payment Date (provided that the Executive continues to make all
required employee contributions). In the event that the Executive's
participation in any such plan or program is barred by the terms thereof, the
Company shall pay to the Executive an amount equal to the annual contribution,
payments, credits or allocation made by the Company to him, to his account or on
his behalf under such plans and programs from which his continued participation
is barred except that if the Executive's participation in any health or medical
insurance plan or program is barred, the Company shall obtain and pay for, on
the Executive's behalf, individual insurance plans, policies or programs that
provide to the Executive and his spouse and eligible dependants health and
medical insurance coverage which is equivalent to the insurance coverage to
which the Executive and his spouse and eligible dependants were entitled prior
to the Payment Date;
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(iv) as of the Payment Date, the Company shall provide the
Executive with a life insurance policy in accordance with the Split-Dollar
Insurance Agreement dated June 25, 1991, with a death benefit of at least
$3,000,000 to the Executive's designated beneficiaries, and which shall include
the cash surrender value thereof;
(v) the Executive's outstanding deferred stock grant of 75,000
shares of the common stock of the Company shall fully vest as of the Payment
Date;
(vi) the Executive's outstanding stock options in the amount of
50,000 shares of the common stock of the Company shall fully vest as of the
Payment Date, and
(vii) all of the Executive's stock options in the amount of
75,000 shares of the common stock of the Company must be exercised on or before
February 1, 2003 and any options not exercised on or before February 1, 2003
will be forfeited.
Section 2. Release by the Executive.
(a) The Executive knowingly and voluntarily releases and forever
discharges the Company and the Company's parents, subsidiaries and affiliates,
together with all of their respective past and present directors, managers,
officers, partners, employees and attorneys, and each of their predecessors,
successors and assigns, and any of the foregoing in their capacity as a
shareholder or agent of the Company (collectively, "Releasees") from any and all
claims, charges, complaints, promises, agreements, controversies, liens,
demands, causes of action, obligations, damages and liabilities of any nature
whatsoever, known or unknown, suspected or unsuspected, which against them the
Executive or his executors, administrators, successors or assigns ever had, now
have, or may hereafter claim to have against any of the Releasees by reason of
any matter, cause or thing whatsoever arising on or before the Effective Date
and whether or not previously asserted before any state or federal court or
before any state or federal agency or governmental entity (the "Release"). The
Release includes, without limitation, any rights or claims relating in any way
to the Executive's employment relationship with the Company or any of the
Releasees, or the termination thereof, or arising under any statute or
regulation, including the Age Discrimination in Employment Act of 1967, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act of 1990, the Employee Retirement Income Security Act of
1974, and the Family Medical Leave Act of 1993, each as amended, or any other
federal, state
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or local law, regulation, ordinance or common law, or under any policy,
agreement, understanding or promise, whether written or oral, formal or
informal, between any of the Releasees and the Executive.
(b) Nothing herein shall be deemed to release (i) any of the
Executive's rights under this Agreement, (ii) any of the Executive's rights that
have accrued prior to the date hereof under the Company's employee benefit
plans; or (iii) any of the Executive's rights to indemnification under any
indemnification agreement, applicable law and the certificates of incorporation
and bylaws of the Company and/or any subsidiary or parent of the Company.
(c) The Executive represents that the Company has advised him to
consult with an attorney of his choosing prior to signing this Agreement. The
Executive further represents that he understands and agrees that he has the
right and has in fact reviewed this Agreement and, specifically, the Release,
with an attorney of the Executive's choice, The Executive further represents
that he understands and agrees that the Company is under no obligation to offer
him this Agreement, and that the Executive is under no obligation to consent to
the Release, and that he has entered into this Agreement freely and voluntarily.
(d) The Executive shall have twenty-one (21) days to consider this
Agreement and once he has signed this Agreement, the Executive shall have seven
(7) additional days from the date of execution to revoke his consent to the
Release set forth above. Any such revocation shall be made by delivering written
notification to the Chief Executive Officer.
Section 3. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid as follows:
If to the Executive:
If to the Company:
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Interim Chief Executive Officer
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or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
Section 4. Miscellaneous.
(a) Enforcement; Governing Law; Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to its conflicts of law principles. The Company
shall have the right, without prejudice to any other rights or remedies it might
have under the law which are reserved, to obtain injunctive relief to restrain
any breach or threatened breach by the Executive of this Agreement or otherwise
to specifically enforce any provision of this Agreement; provided, however, that
such right to injunctive relief does not preclude the Company from seeking
monetary damages for a breach by the Executive of this Agreement.
(b) Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes any and all prior agreements, and understandings, both
written and oral, between the parties hereto with respect to the subject matter
hereof, including but not limited to the Employment Agreement and any separation
benefits payable thereunder, except as otherwise provided in Section 5(c) below.
(c) Survival of Certain Employment Agreement Provisions. The Company
and the Executive agree that Sections 9, 10, 11, 13.1 and 13.2 of the Employment
Agreement shall continue in full force and effect following the Effective Date
and that the non-compete term of Section 11.2 shall commence on the Effective
Date.
(d) Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect.
(e) Successors. This Agreement shall be binding upon and shall inure
to the benefit of each of the parties hereto, and their respective heirs,
legatees, executors, administrators, legal representatives, successors and
assigns.
(f) Withholding. All payments made by the Company to the Executive
pursuant to this Agreement shall be reduced by all federal, state, city or
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other taxes that are required to be withheld pursuant to any law or governmental
regulation.
(g) Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GENESIS HEALTH VENTURES, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------
Name: Xxxxxx X. Xxxx
Title: CEO
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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