STOCK OPTION AGREEMENT AND GENERAL RELEASE
Exhibit 10.124
CONFIDENTIAL
This Stock Option Agreement and General
Release (the “Agreement”),
by and between Comprehensive Health Management, Inc., a Florida corporation (the
“Company”),
and Xxxx Xxxxxxx, an individual (“Employee”),
is entered into as of the “Effective Date,” as defined below in Section
11. The Company and Employee shall be referred to collectively herein
as the “Parties.”
WHEREAS, the Company wishes to provide
certain consideration in exchange for a release of liabilities by Employee and
certain other covenants and agreements by Employee; and
WHEREAS, Employee and the Company wish
to formalize their agreement.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements set forth herein, which
covenants and agreements constitute good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
1. Unconditional and Full
General Release of All Claims.
(a) In
exchange for the consideration set forth in Section 2 below, on behalf of
Employee, Employee’s agents, attorneys, heirs, administrators, executors,
assigns, and other representatives, and anyone acting or claiming on Employee’s
or their joint or several behalf, Employee hereby covenants never to xxx and
releases, waives, acquits, and forever discharges the Company, its divisions,
subsidiaries, affiliates, parents, related entities, and their respective past
or present employees, officers, directors, stockholders, partners, investors,
executives, managers, agents, attorneys, representatives, successors, and
assigns, and anyone acting on their joint or several behalf (collectively, the
“Releasees”),
from any and all claims, actions, causes of action, demands, damages, suits in
equity, costs, expenses, liabilities, or other losses, of any kind whatsoever,
whether known or unknown, that exist or may exist from the beginning of time up
to and including the date of Employee’s execution of this Agreement or that in
any way arise from, grow out of, or are related to any events or circumstances
that occurred on or prior to the date of Employee’s execution of this Agreement,
including, but not limited to, any matter related to Employee’s employment with
the Company or the termination thereof. By way of example only, and
without limiting the immediately preceding sentence, as used herein the terms
“claims,” “causes of action,” and “demands” shall include, and Employee agrees
that neither Employee nor Employee’s representative(s) shall file, or cause to
be filed, a complaint, lawsuit, or any other claim against the Releasees with
respect to (i) any federal, state, or local employment law or statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the Family and Medical Leave Act,
the Employee Retirement Income Security Act, and Chapters 448 or 760 of the
Florida Statutes, or (ii) any claim based on the existence or breach of
oral or written contracts of employment, the negligence of any Releasees,
negligent or intentional misrepresentations, promissory estoppel, interference
with contract or employment, defamation or damage to business or personal
reputation, assault and battery, negligent or intentional infliction of
emotional distress, unlawful discharge in violation of public policy,
discrimination, retaliation, wrongful discharge, sexual harassment,
whistleblowing, breach of implied covenant of good faith and fair dealing,
fraud, stock fraud, equity, tort, intellectual property, personal injury,
spoliation of evidence, wage and hour law, statute or common law, claims for
severance pay, claims related to equity compensation and/or fringe benefits,
claims for attorneys’ fees, vacation pay, debts, accounts, compensatory damages,
punitive or exemplary damages, or liquidated damages.
CONFIDENTIAL
(b) Employee
acknowledges and agrees that Employee has been properly paid for all hours
worked, that Employee has not suffered any on-the-job injury for which Employee
has not already filed a claim, that Employee has been properly provided any
leave of absence because of Employee’s or a family member’s health condition,
and that Employee has not been subjected to any improper treatment, conduct, or
actions due to or related to Employee’s request for, or Employee’s taking of,
any leave of absence because of Employee’s own or a family member’s health
condition.
(c) Nothing
in this Agreement will waive, relinquish, diminish, or in any way affect (i) any
vested rights that Employee may have under Company retirement plans, or (ii) any
rights or claims that, as a matter of law, cannot be released or waived.
Although Employee is not precluded from filing a charge with the U.S. Equal
Employment Opportunity Commission (“EEOC”) or
participating in an EEOC investigation, Employee, to the maximum extent
permitted by law, expressly waives any right to monetary recovery or any other
individual relief in connection with any EEOC charge or other administrative
charge or should any federal, state, or local administrative agency or any other
person pursue any claims on Employee’s behalf arising out of or related to
Employee’s employment with the Company and/or the termination of that
employment.
2. Consideration.
(a) In
exchange for Employee’s commitments as outlined in this Agreement, the Company
will provide Employee the right to execute amendments to each of Employee’s
stock option agreements (“Option Extension
Agreements”). Execution by Employee of the Option Extension
Agreements shall render the post-termination of service exercise period for the
stock options that are vested and unexercised as of the Termination Date
extended for any period during which Employee cannot exercise such stock
options, because such an exercise would violate an applicable Federal, state,
local, or foreign law, until 30 days after the exercise of such stock options
first would no longer violate any applicable Federal, state, local, and foreign
laws.
(b) Employee
acknowledges that any portion of any equity award, including, but not limited
to, grants of restricted stock and options to purchase shares of common stock,
par value $.01 per share, of WellCare Health Plans, Inc., that are not vested as
of the Termination Date, as defined in Section 3, shall expire and be forfeited
in accordance with the terms of Employee’s equity agreements.
(c) Employee
acknowledges that, absent this Agreement, Employee has no legal, contractual, or
other entitlement to the consideration set forth in this Section 2, and such
consideration constitutes valid and sufficient consideration for Employee’s
release of claims and other obligations set forth in this
Agreement.
CONFIDENTIAL
(d) Employee
acknowledges and agrees that the Company, including its Releasees, has made no
representations regarding the tax consequences of any consideration received by
Employee pursuant to this Agreement. Employee agrees to pay federal,
state, and/or local taxes, if any, that are required by law to be paid with
respect to the consideration received hereunder. Employee also agrees
to indemnify and hold the Company and the other Releasees harmless from any
claims, demands, deficiencies, levies, assessments, executions, judgments, or
recoveries by any government entity against the Company and the other Releasees
for any amounts claimed due as a result of this Agreement pursuant to claims
made under any federal, state, or local tax laws. Employee further
agrees to indemnify and hold the Company and the other Releasees harmless for
any deficiencies, levies, assessments, fines, penalties, and/or interest
assessed by reason of any such claim.
(e) Employee
acknowledges and agrees that, should Employee breach any of Employee’s
commitments as set forth in this Agreement, the Company may, in addition to
pursuing all legal and equitable rights and remedies that might be available,
without limitation, terminate any rights provided to Employee pursuant to this
Agreement.
3. Severance of
Employment. Pursuant to this Agreement, Employee agrees and
recognizes that Employee’s employment relationship with the Company will
terminate as of the close of business on December 19, 2008 (the “Termination
Date”).
4. Non-Competition;
Non-Solicitation. Employee acknowledges and agrees to comply
with the restrictive covenants set forth in Exhibit A, which is attached hereto
and incorporated by reference herein.
5. Confidential
Information. Employee agrees that Employee shall not at any
time for any reason, in any fashion, form or manner, either directly or
indirectly, divulge, disclose, or communicate to any person, firm, corporation,
or other business entity, in any manner whatsoever, any confidential information
or trade secrets concerning the business of the Company or any of its
affiliates, including without limiting the generality of the foregoing, methods
or systems of its or their operation or management, any information regarding
its or their financial matters, or any other material information (including
member, subscriber and provider lists and identifying information regarding
members and subscribers) concerning the business of the Company or any of its
affiliates, its or their manner of operation, its or their plans or other
material data (the “Business”). Employee
agrees that Employee shall not retain any confidential or proprietary
information, including, without limitation, any member, subscriber, or provider
lists, identifying information regarding members or subscribers, pricing
methods, financial structures, correspondence, accounts, records, or any other
documents or property made or held by Employee or under Employee’s control in
relation to the Business of the Company or its affiliates, nor shall Employee
retain any copy of any such confidential or proprietary information, all of
which (whether in hard copy or electronic format and including all originals and
copies) shall immediately be returned to the Company by Employee prior to the
Termination Date as defined above in Section 3.
CONFIDENTIAL
6. Nondisclosure of
Terms.
(a) Employee
agrees that the terms and conditions of this Agreement are and shall remain
confidential. Except as specifically set forth herein, Employee shall
not disclose the terms of this Agreement in whole or in part to any individual
or entity without prior written consent of the Company.
(b) Employee
agrees that Employee shall not disclose the terms of this Agreement to any
person except (i) to members of Employee’s immediate family and Employee’s
professional advisors, who shall be advised of the confidentiality provisions of
this Section 6, (ii) to the extent required by a final and binding court
order or other compulsory process, (iii) to any federal, state, or local
taxing authority, or (iv) upon request, to any federal, state, or administrative
enforcement agency, including, but not limited to, the United States Attorney’s
Office for the Middle District of Florida. Upon Employee’s receipt of
any order, subpoena, or other compulsory process demanding production or
disclosure of this Agreement, Employee agrees that no later than ten business
days prior to the date that such disclosure is to be made, Employee will notify
the Company in writing of the requested disclosure, including the proposed date
of the disclosure, the reason for the requested disclosure, and the identity of
the individual or entity requesting the disclosure.
(c) Employee
further understands and agrees that this Agreement shall not be admissible as
evidence in any court proceeding or administrative proceeding, except that the
Company or Employee may submit this Agreement to any appropriate forum in the
event of an alleged breach of this Agreement.
(d) Notwithstanding
the foregoing, during the Restricted Period, as defined in Exhibit A, Employee
agrees to disclose the existence of Exhibit A and provide a copy of same to any
prospective employer, partner, joint venturer, investor, or lender prior to
entering into any employment, partnership, or other business relationship with
such person or entity.
7. Future
Cooperation. For purposes of this Section 7, references to the
“Company” shall include the Company, WellCare Health Plans, Inc., and any
subsidiary or affiliate thereof.
(a) Government Investigations and
Responses to Subpoenas. Subject to the Company’s preservation
and assertion of any otherwise applicable evidentiary privileges, no provision
of this Agreement shall in any way restrict Employee’s ability to cooperate or
communicate with any federal, state, or local agency in connection with any
federal, state, or local investigation or informal inquiry or be construed as
prohibiting the provision of non-privileged documents and/or testimony by
Employee in response to a subpoena issued by a court of competent jurisdiction,
or as may otherwise be required by law. Employee understands that the
Company expects Employee to cooperate fully and respond to questions candidly
and truthfully in any such investigation or informal inquiry. In the
event of receipt of any subpoena issued at the request of any private sector
person or entity, Employee agrees to notify the Company promptly before
complying with the subpoena, so that the Company may take appropriate action to
protect its interests, including moving to quash the subpoena, as long as
provision of such notice does not violate any applicable law, rule, or court
order. If the Company seeks to prevent disclosure in accordance with
applicable legal procedures and provides Employee with notice before the
deadline for compliance with a subpoena, Employee shall not make any such
disclosures until either such objections are withdrawn or finally adjudicated by
the tribunal.
CONFIDENTIAL
(b) Internal Investigations and Legal
Proceedings.
(i) Employee
agrees to cooperate fully and completely with the Company, its advisors, and its
legal counsel and respond to questions candidly and truthfully with respect to
any internal inquiry or investigation and any legal proceeding involving the
Company. Such cooperation shall include being available at reasonable
times and places for interviews, reviewing documents, testifying in a deposition
or a legal or administrative proceeding, and providing advice to the Company in
preparing defenses to any pending or potential future claims against the
Company. The Company agrees to reimburse Employee for all reasonable
out-of-pocket expenses incurred in connection with rendering such
services.
(ii) If
Employee is legally required to appear or participate in any proceeding that
involves or is brought against the Company, Employee agrees to disclose to the
Company no later than ten business days prior to the date that such disclosure
is to be made what Employee plans to say or produce and otherwise cooperate
fully with the Company.
(iii) Employee
shall, at any time and from time to time and at no cost to the Company, take any
and all steps necessary to carry out the purposes and intent of this
Agreement.
(c) It
is expressly understood and agreed that nothing in this Section or the Agreement
(or any other agreements with the Company) shall require Employee to take any
action (including, without limitation, consenting to an interview in any
investigation or litigation) that Employee reasonably and in good faith believes
would compromise Employee’s rights or privileges under the United States
Constitution or any state constitution.
8. Nondisparagement; No
Communication Regarding the Company. Employee agrees not to
make any malicious, derogatory, disparaging, or defamatory statements or
communications, whether written or oral, to any third party about or regarding
the Company or any Releasees or any aspect of Employee’s prior employment with
the Company. In connection with seeking future employment with a
third party, Employee may discuss Employee’s prior work experience, so long as
Employee complies with the provisions of this Section in the course of such
discussions.
9. Provisions Necessary and
Reasonable. Employee agrees that (a) the provisions of Sections 4, 5, and
8 of this Agreement are necessary and reasonable to protect the Company’s
confidential information and goodwill; (b) the specific temporal, geographic,
and substantive provisions of Exhibit A of this Agreement are reasonable and
necessary to protect the Company’s legitimate business interests; and (c) in the
event of any breach of any of the covenants set forth herein, the Company would
suffer substantial irreparable harm and would not have an adequate remedy at law
for such breach. In recognition of the foregoing, the Employee agrees
that in the event of a breach or threatened breach of any of these covenants, in
addition to such other remedies as the Company may have at law, without posting
any bond or security, the Company shall be entitled to seek and obtain equitable
relief, in the form of specific performance, and/or temporary, preliminary, or
permanent injunctive relief, or any other equitable remedy that then may be
available. The seeking of an injunction or order shall not affect the
Company’s right to seek and obtain damages or other equitable relief on account
of any such actual or threatened breach.
CONFIDENTIAL
If any of the covenants contained in
Sections 4 (incorporating Exhibit A), 5, or 8 hereof, or any part thereof, are
held to be unenforceable by a court of competent jurisdiction because of the
length of time, area covered, or activity covered thereby, the Parties agree
that the court making such a determination shall have the power to adjust,
reduce, or otherwise reform any such covenant to the extent necessary to cure
any invalidity and to the protect the interests of the Company to the fullest
extent of the law; that the area, time period, and scope of activity restricted
shall be the maximum area, time period, and scope of activity the court deems
valid and enforceable; and that as reformed, such covenant shall then be
enforced.
10. No Admission of Wrongful
Conduct. Employee hereby acknowledges and agrees that, by the
Company providing the consideration described above and entering into this
Agreement, neither the Company nor the Releasees are admitting any unlawful or
otherwise wrongful conduct or liability to Employee or Employee’s heirs,
executors, administrators, assigns, agents, or representatives.
11. Employee
Acknowledgment. EMPLOYEE UNDERSTANDS AND AGREES THAT EMPLOYEE
MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT AND
ACKNOWLEDGES THAT EMPLOYEE IS EXECUTING THIS AGREEMENT VOLUNTARILY AND OF
EMPLOYEE’S OWN FREE WILL, AND THAT EMPLOYEE FULLY UNDERSTANDS THE TERMS OF THIS
AGREEMENT. Further, Employee acknowledges that Employee has had an
opportunity to review this Agreement fully and to discuss its terms with legal
counsel or any other advisor of Employee’s choice prior to its
execution. For purposes of this Agreement, the “Effective Date” shall
mean the date upon which Employee executes the Agreement.
Employee understands that Employee must
execute both this Agreement and the Option Extension Agreements referenced above
in Section 2 on or before the Termination Date, as defined above in Section
3. Absent such execution, this Agreement and the Option Extension
Agreements shall be deemed withdrawn and rendered null and void.
12. Indemnification. Employee
hereby agrees to indemnify and hold the Company and Releasees harmless from and
against any and all losses, costs, damages, or expenses, including without
limitation, attorneys’ fees incurred by the Company and Releasees, or any of
them, arising out of any breach of this Agreement by Employee.
13. Ownership of Claims; No
Filing of Claims. Employee represents, warrants, and agrees
that Employee has not heretofore assigned or transferred, or purported to assign
or transfer, to any person any claim or portion thereof or interest
therein. Employee further represents and warrants that Employee does
not presently have on file any claim, charge, grievance, or complaint against
any of the Releasees in or with any administrative, state, federal or
governmental entity, agency, board, or court or before any other tribunal or
panel or arbitrators, public or private, based upon any actions or omissions by
the Releasees occurring prior to Employee’s execution of the
Agreement.
CONFIDENTIAL
14. No Attorneys’ Fees or
Costs. Each of Employee and the Company acknowledges and
agrees that the other shall not be required to pay any attorneys’ fees or any
other costs incurred as a result of any representation of either party in
connection with the preparation, consideration, and execution of the
Agreement.
15. Arbitration. Any
dispute regarding any aspect of this Agreement, including its formation, or any
act that would violate any provision in this Agreement (other than disputes with
respect to alleged violations of the covenants contained in Sections 4
(incorporating Exhibit A), 5, or 8 hereof, and the Company’s pursuit of the
remedies described in Section 9 hereof in connection therewith) shall be
resolved in final and binding arbitration by an experienced employment law
arbitrator licensed to practice law in Florida and selected in accordance with
the rules of the American Arbitration Association, as the exclusive remedy for
such dispute. Judgment on any award rendered by such arbitrator may
be entered in any court having proper jurisdiction.
16. No
Representations. Employee represents and acknowledges that in
executing this Agreement Employee is not relying upon, and has not relied upon,
any representation or statement, other than as set forth herein, made by the
Company or any agents, representatives, or attorneys of the Company with regard
to the subject matter, basis, or effect of this Agreement or
otherwise.
17. Successors. This
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the Parties hereto and their respective successors and assigns.
18. Governing Law;
Jurisdiction. This Agreement is made and entered into in the
State of Florida and shall in all respects be interpreted, enforced, and
governed by and under the internal laws of the State of Florida. Each
of the undersigned hereby consents to the personal jurisdiction of the state and
federal courts in the County of Hillsborough, Florida, for purposes of any
action to enforce, or for a breach of, this Agreement.
19. Counterparts and Facsimile
Execution. This Agreement may be executed and delivered (a) in
one or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument and/or (b) by
facsimile, in which case (i) the instrument so executed and delivered shall be
binding and effective for all purposes, and (ii) the Parties shall nevertheless
exchange substitute hard copies of such facsimile instruments as soon thereafter
as practicable (but the failure to do so shall not affect the validity of the
instruments executed and delivered by facsimile).
20. Entire
Agreement. This Agreement constitutes the entire agreement
between the Company and Employee and supersedes any prior written or oral
agreements, understandings, or arrangements between the Parties regarding any of
the items addressed herein. Any modifications to the Agreement must
be made in writing and signed by both Parties.
CONFIDENTIAL
21. Miscellaneous.
(a) Should
any part, term, or provision of this Agreement be declared or determined by a
court of competent jurisdiction to be illegal or invalid, the validity of the
remaining parts, terms, or provisions shall not be affected thereby, and said
illegal or invalid part, term, or provision shall be deemed not to be a part of
this Agreement.
(b) As
used in this Agreement, the masculine, feminine, or neuter gender and the
singular or plural number shall be deemed to include the others whenever the
context so indicates or requires.
IN WITNESS WHEREOF, Employee and a duly
authorized representative of the Company hereby certify that they have read this
Agreement in its entirety and voluntarily executed it in the presence of
competent witnesses as of the date set forth under their respective
signatures.
|
EMPLOYEE
/s/ Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
12/18/08
Date
/s/ Xxxxxxxx
Xxxxxx
Witness
12.18.08
Date
|
COMPANY
COMPREHENSIVE
HEALTH
MANAGEMENT,
INC.
By:
/s/ Xxxxxx X. X'Xxxx
III
Xxxxxx X. X’Xxxx III
Senior
Vice President, General Counsel
12/18/08
Date
/s/ Xxxxxxx
Xxxxx
Witness
12/18/08
Date
|
EXHIBIT A TO SEPARATION
AGREEMENT AND GENERAL RELEASE
Non-Competition;
Non-Solicitation Agreement
Xxxx Xxxxxxx (“Employee”),
in exchange for consideration provided by Comprehensive Health Management, Inc.
(“CHMI”), including consideration
provided to Employee pursuant to the terms of the Stock Option Agreement and
General Release entered into between Employee and CHMI, agrees as
follows:
A. Employee
shall not, from Employee’s termination of employment with CHMI through May 1,
2010 (the “Restricted
Period”),
directly or indirectly, alone or as a partner, joint venturer, officer,
director, employee, consultant, agent, independent contractor, or stockholder
(other than as provided below), accept employment with, or otherwise provide any
services on behalf of, any entity (or any affiliate, subsidiary, division, or
other business unit of such entity) that provides managed care programs and/or
services to individuals receiving benefits under any Medicare, Medicaid, or
S-CHIP government program, including any stand-alone prescription drug program
or private fee-for-service program (collectively “Government
Programs”),
within any state where CHMI or any subsidiary or affiliate of CHMI (collectively
the “Company”)
does business as of the date on which Employee’s employment with CHMI terminates
or in any state where the Company is actively pursuing business opportunities
that are known to Employee as of the date on which Employee’s employment with
CHMI terminates. Notwithstanding the foregoing, Employee shall not be
prohibited during the Restricted Period from (i) acting as a passive investor
where Employee owns not more than two percent of the issued and outstanding
capital stock of any publicly-held company, or (ii) accepting employment with
any entity that receives less than 25% of its total revenues from Government
Programs, so long as such employment is within a separate and distinct business
unit of such entity that does not derive revenues from Government Programs, and
Employee is not in any way involved in any aspect of the business relating to
Government Programs.
B. During
the Restricted Period, Employee shall not, without the prior written consent of
the Company, recruit, hire, or solicit any employee or former employee of the
Company or otherwise encourage any employee of the Company to leave his or her
employment with the Company.
C. During
the Restricted Period, Employee shall not (i) solicit or accept business from
any customer, provider, member, or independent contractor of the Company or any
prospective customer, provider, member, or independent contractor being pursued
by the Company, to the extent such business involves products or services that
are competitive with those offered by the Company; (ii) request, encourage, or
advise any current or prospective employee, regulator, customer, provider,
member, independent contractor, or agent of the Company to withdraw, cancel,
curtail, or otherwise adversely modify its business dealings with the Company or
not to proceed with, or enter into, any business relationship with the Company;
or (iii) otherwise damage or interfere in any way with (or attempt to damage or
interfere with) the relationships between the Company and current or prospective
employees, regulators, customers, providers, members, independent contractors,
or agents of the Company.
EMPLOYEE
|
/s/
Xxxx Xxxxxxx
|
Date:
12/18/08
|
Xxxx
Xxxxxxx
