Exhibit 10.10 of Item 15
CONFIDENTIAL
December 12, 2002
Xxxxxxxx Xxxxxxxxx
Re: Separation Agreement and General Release
Dear Xxx:
This letter proposes the following Separation Agreement and General Release
("Agreement") between you and Medix Resources, Inc., (the "Company") regarding
the terms of your release and separation from Medix.
I. Background
A. You were employed by the Company as Executive Vice President.
B. You and the Company have agreed to terminate your employment
relationship on an amicable basis due to the elimination of your
position.
II. Terms of Agreement
In order to effect the termination of your employment and to provide you with
certain benefits that you would not otherwise be entitled to, you and the
Company agree as follows:
(iv) On October 23. 2002 your services with the Company officially
terminated although you will continue as a paid employee with all
benefits you received while actively working for the Company
through the balance of your contract term of February 15, 2003.
You agree that Notice of termination pursuant to Section 15 of
your February 15, 2002 contract has been satisfied or is
otherwise waived.
(v) The Company will continue to pay you in accordance with it's bi
weekly payroll at the rate of $7,000.00 per payroll period until
the 15th of February 2003, when your current contract term would
have otherwise expired. The difference between your current pay
scale of $9423.00 per pay period and the $7,000.00, which will be
paid to you, will accrue until the end of the term. Commencing
the next pay period after February 15, 2003 the Company will
either pay you in full for any accrued salary and vacation (as
indicated in your last pay stub) or they will continue to pay you
at the rate of $7,000.00 per pay period until the balance of the
accrued vacation and salary has been paid in full.
(vi) Interest shall accrue on the unpaid portion of your salary at the
rate of 1% per cent above prime as published in the Wall Street
Journal on December 1, 2002, until the unpaid portion is paid in
full. Commencing February 15, 2003 interest shall also accrue on
any reduced portion of your vacation or subsequent six months
severance pay.
(vii)In the event the Company secures cash financing from any one
lender an amount in excess of $3million dollars your accrued
salary will be paid up and the bi weekly rate in section 2 above
shall revert to your full salary of $9423.000 per pay period.
(viii) In addition, in the event the Company secures cash financing
from multiple lenders which exceeds $3 million dollars
cumulatively, the Company will likewise pay any accrued salary
and commence to pay your bi weekly salary at the full rate of
$9423.00 per pay period provided, in the exercise of the
Company's reasonable business judgment they can afford to do so
and further provided there are no restrictions or covenants
prohibiting the use of new cash from lenders or investors for the
payment of prior obligations.
(ix) Your termination from the Company will be categorized as
termination-without-cause, as defined in your February 15, 2002
Employment Agreement. The Employment Agreement dated February 15,
2003 is otherwise null and void.
(x) The Company agrees to waive any confidentiality provisions,
non-competition provisions or non-solicitation provisions that
would otherwise be in effect in your employment agreement.
(xi) This Agreement shall not be in any way construed as an admission
by the Company that it has acted wrongfully with respect to you
or any other person, or that you have any rights whatsoever
against the Company.
(xii)Even if you do not sign this Agreement, you will be offered
benefits to which you are entitled under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"), and you retain all
benefits under the Company's 401(k) Plan if you are a
participant.
(xiii) In the event you do not sign this agreement or revoke your
signature after signing the Company will not convert your ISO
options to NQO's and you will have 90 days from your termination
date to exercise those options and the requisite provisions of
your employment agreement are in effect including non-
competition, confidentiality and non solicitation.
(xiv)In exchange for the promises contained in this Agreement and
release of claims as set forth below, and provided that you sign
this agreement and return it to me by December 19, 2002, and do
not revoke this Agreement as set forth in Paragraph 22(d):
a. The Company will pay you a six-month severance allowance in
the amount of your current base monthly salary of $9423.00,
beginning February 15, 2003 and ending August 15, 2003 to be
paid on a bi-weekly basis and in accordance with the
Company's normal payroll process.
b. Notwithstanding the obligation in 11 herein, the Company may
delay the commencement of the six-month payment if upon the
conclusion of the contract period of February 15, 2003 there
remains any accrued unpaid salary or vacation. In that
event, the severance shall be paid at the same rate as the
reduced salary benefit, to wit, $7,000.00 per pay period
until the entire balance due is paid in full.
c. The Company shall for all approved, untimely and not
submitted expense reports, reimburse you as and when they
can during the next 10 months in an amount not to exceed
$7,000.
d. The Company will take steps to extend the exercise dates on
your ISO stock options or convert them to NQO's, whichever
in their sole opinion is preferable.
e. Waive any non-competition, confidentiality or
non-solicitation provisions that it would otherwise claim.
(xv) In consideration of the promises contained in this Agreement, you
agree:
a. On behalf of yourself and anyone claiming through you,
irrevocably and unconditionally to release, acquit and
forever discharge the Company and/or its parent corporation,
subsidiaries, divisions, predecessors, successors and
assigns, as well as each's past and present officers,
directors, employees, shareholders, trustees, joint
venturers, partners, and anyone claiming through them
(hereinafter "Releasees" collectively), in each's individual
and/or corporate capacities, from any and all claims,
liabilities, promises, actions, damages and the like, known
or unknown, which you ever had against any of the Releasees
arising out of or relating to your employment with the
Company and/or the termination of your employment with the
Company. Said claims include, but are not limited to: (1)
employment discrimination (including claims of sex
discrimination and/or sexual harassment) and retaliation
under Title VII (42 U.S.C.A. 2000e etc.) and under 42
U.S.C.A. section 1981 and section 1983, age discrimination
under the Age Discrimination in Employment Act (29 U.S.C.A.
sections 621-634) and/or any other relevant federal, state
statutes or municipal ordinances; (2) any and all claims
under the Americans with Disability Act (3) disputed wages;
(4) wrongful discharge and/or breach of any alleged
employment contract; and (5) claims based on any tort, such
as invasion of privacy, defamation, fraud and infliction of
emotional distress.
b. That you shall not bring any legal action against any of the
Releasees for any claim waived and released under this
Agreement and that you represent and warrant that no such
claim has been filed to date. You further agree that should
you bring any type of administrative or legal action arising
out of claims waived under this Agreement, you will bear all
legal fees and costs, including those of the Releasees. You
further covenant not to bring any Claim or Testify against
the company absent legal process;
c. Notification to Company. Provided the company is not in
breach, you agree that you will not file or commence any
complaint, charge, or action against the Company alleging
wrongdoing pertaining to your employment with the Company or
the termination thereof. You agree that if any governmental
agency or any court or arbitrator hereafter assumes
jurisdiction of any complaint, charge, or action against the
Company you will not participate in such proceeding or
action, as a witness or otherwise, unless compelled by
subpoena or court order to do so and only after giving the
Company immediate advance written notice of such subpoena or
order and all cooperation reasonably required by the Company
to challenge or limit the same. Company will provide you
with defense with respect to prior conduct of your as a
company employee, but no defense will be provided respecting
conduct involving your individual, ultra xxxxx the Company
conduct or conduct otherwise prohibited herein.
d. Notwithstanding the execution of this agreement, should you
commence any action or proceeding against the Company
pertaining to the subject matter of the release or any
waiver contained in this agreement, you shall as a condition
precedent to the prosecution of such action cause to be
returned to the Company the full amount of any profits
realized by you in the course of exercising any ISO's that
were converted to NQO's and all remaining options shall
immediately expire.
e. If in the course of any litigation, the release and waiver
contained in this agreement is deemed to be valid by a court
of competent jurisdiction and is thereby a bar to your
claim, then you shall pay the Company's reasonable costs and
attorney's fees pertaining to the investigation and defense
of such action or proceeding.
(xvi)You agree to refer any and all reference checks to the Company's
Chief Executive Officer and you know that any such references
will be limited to confirmation of your dates of employment and
last position held. The obligation under this Paragraph is
separable and any failure by the Company to perform the
obligation in this Paragraph will only give rise to an action to
enforce this Paragraph.
(xvii) You agree that subsequent to executing this agreement, you will
not, directly or indirectly, disclose the fact of and terms of
this Agreement, including the severance benefits, to anyone other
than your attorney, except to the extent such disclosure may be
required for accounting or tax reporting purposes or as otherwise
required by law. You further warrant and represent that and
acknowledge that a breach of this provision would be a material
breach of this agreement.
(xviii) This agreement shall be binding on the parties and upon their
heirs, administrators, representatives, executors, successors and
assigns and shall inure to their benefit and to that of their
heirs, administrators, representatives, executors, successors and
assigns.
(xix)On or before November 26, 2003 you will return all of the
Company's property in your possession including, but not limited
to, such as financial documents, business models, contracts,
customer lists, mailing lists, account information, price lists
and pricing information and all of the tangible and intangible
property belonging to the Company and relating to your employment
with the Company. You further represent and warrant that you have
not retained any copies, electronic or otherwise, of such
property.
(xx) You will cooperate fully with the Company in its defense of or
other participation in any administrative, judicial or other
proceeding arising from any charge, complaint or other action
which has been or may be filed.
(xxi)You warrant and represent that you have not filed any complaint,
action or any other matter nor initiated any proceeding with any
administrative or regulatory body on either a municipal, state or
federal level.
(xxii) You will continue to comply with the terms of your Employment
Agreement between you and the Company, executed on February 15,
2002 and know and understand that the obligations contained in
that agreement survive execution of this Agreement and your
termination of employment.
(xxiii) You agree that you will not make any comments relating to the
Company or its employees which are critical, derogatory or which
may tend to injure the business of the Company to anyone outside
of the senior management and directors of the Company, unless
required by law.
(xxiv) In the event that you breach any of your obligations under this
agrement, any outstanding obligations of the Company hereunder
shall immediately terminate, and any payments previously made to
you pursuant to Paragraph 3 shall be returned to the Company.
(xxv)You also acknowledge that you have been informed pursuant to the
federal Older Workers Benefit Protection Act of 1990 that:
a. You have the right to consult with an attorney before
signing this Agreement;
b. You do not waive rights or claims under the federal Age
Discrimination in Employment Act that may arise after the
date this waiver is executed.
c. You have twenty-one (21) days from the date of November 11,
2002 to consider this Agreement;
d. You have seven (7) days after signing this Agreement to
revoke the Agreement, and the Agreement will not be
effective until that revocation period has expired.
(xxvi) The provisions of this Agreement are severable. If any
provision is held to be invalid or unenforceable, it shall not
affect the validity or enforceability of any other provision.
(xxvii) This Agreement, combined with the terms of your Employment
Agreement sets forth the entire agreement between you and the
Company and supersedes any and all prior oral or written
agreements or understandings between you and the Company
concerning the subject matter of this Agreement. This Agreement
may not be altered, amended or modified, except by a further
written document signed by you and the Company.
(xxviii) You represent that you fully understand your right to review
all aspects of this Agreement with an attorney of your choice,
that you have had the opportunity to consult with an attorney of
your choice, that you have carefully read and fully understand
all the provisions of this Agreement and that you are freely,
knowingly and voluntarily entering into this Separation Agreement
and General Release.
If you are willing to enter into this Agreement, please signify your
acceptance in the space indicated below, and return to me by December 12, 2002.
As I noted earlier, this Agreement will not become effective until seven (7)
days after the date you sign this Agreement.
PLEASE READ CAREFULLY. YOU ARE GIVING UP ANY LEGAL CLAIMS THAT YOU HAVE AGAINST
THE COMPANY BY SIGNING THIS AGREEMENT.
Very truly yours,
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Xxxxxx Xxxxx
Chief Executive Officer
Accepted and agreed to on this 13 day of Decemver 2002
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Xxxxxxxx Xxxxxxxx
Date:
