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Exhibit 10.1
SEPARATION AND RELEASE AGREEMENT
This Separation Agreement ("Agreement") is entered into by and between Xxxxxxx
X. Xxxxxx XX ("Xx. Xxxxxx") and Chronimed, Inc. ("Chronimed").
WHEREAS, Xx. Xxxxxx is a Chronimed employee who is hereby separating
from employment with Chronimed; and
WHEREAS, Xx. Xxxxxx and Chronimed desire to fully and finally settle
all issues, differences and actual and potential claims between them, including,
but in no way limited to, any claim that might arise out of Xx. Xxxxxx'x
employment with Chronimed or his separation therefrom;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, Xx. Xxxxxx and Chronimed agree as follows:
1. Xx. Xxxxxx represents, understands and agrees that his employment
with Chronimed is hereby terminated, with his last day of employment with
Chronimed to be January 5, 2001.
2. Chronimed agrees to provide Xx. Xxxxxx the following payments and
benefits:
(a) Seventeen calendar days after execution, Chronimed will make
payment(s) to Xx. Xxxxxx as follows:
A lump sum payment in an aggregate amount equal to $975,000,
plus three times the average of Xx. Xxxxxx'x annual bonuses
earned and paid for the Company's fiscal years 1998, 1999, and
2000, less all legally required withholding.
(b) The Company agrees to make available to Xx. Xxxxxx health care
benefits as follows:
The Company shall pay, for a period up to 12 months following
the date in Paragraph 1, the cost of Xx. Xxxxxx'x insurance
premiums to maintain health and dental coverage, with a
mutually acceptable insurer, equivalent to the cost of
premiums and coverages maintained by Xx. Xxxxxx with the
Company immediately prior to execution of this Agreement. It
is understood that Xx. Xxxxxx'x daughter Xxxxxxx and her child
are presently eligible under MEDgenesis's COBRA insurance
option. Xx. Xxxxxx will retain the option to
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continue insurance coverage for Xxxxxxx and her child subject
to COBRA under the insurance plan provided by MEDgenesis or
its successor.
The Company's obligations under this Paragraph 2.b. shall cease upon
Xx. Xxxxxx'x participation in or eligibility to receive medical
insurance benefits under any program sponsored by an employer other
than the Company.
(c) All unvested Company stock options held by Xx. Xxxxxx shall
immediately vest upon the date identified in Paragraph 1 and Xx. Xxxxxx
shall have twelve months from that date during which to exercise such
options. Any options unexercised at the end of the twelve month period
shall terminate.
(d) For twelve months following the date identified in Paragraph 1,
Chronimed will provide Xx. Xxxxxx with a personal office and administrative
support with the cost of such office and support not to exceed $1,667 per month.
Chronimed's obligation under this Paragraph 2(d) will terminate upon Xx.
Xxxxxx'x acceptance of employment with any other enterprise.
(e) Xx. Xxxxxx agrees that the payments and benefits identified above
are being provided as consideration for his acceptance and execution of
this Agreement.
3. As an essential inducement to Chronimed to enter into this
Agreement, and as consideration for the foregoing promises of Chronimed, Xx.
Xxxxxx hereby releases and discharges Chronimed, its officers, employees,
agents, assigns, insurers, representatives, counsel, administrators, successors,
shareholders, and/or directors from all liability for damages or claims of any
kind that have arisen as of the date of this Agreement, and agrees not to
institute any claim for damages or otherwise, by charge or otherwise, nor
authorize any other party, governmental or otherwise, to institute any claim via
administrative or legal proceedings against Chronimed or any claims including,
but not limited to, any claims arising under or based upon the Minnesota Human
Rights Act, Minn. Stat. Sections 363.01 et seq.; Title VII of the Civil Rights
Act, 42 U.S.C. Sections 2000e et seq.; the Age Discrimination in Employment Act,
29 U.S.C. Sections 621 et seq.; the Americans With Disabilities Act, 42 U.S.C.
Sections 12101 et seq.; the Employee Retirement Income Security Act, 29 U.S.C.
1001, et seq.; the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C.
1181, et seq.; and any contract, quasi contract, or tort claims, whether
developed or undeveloped, arising from or related to Xx. Xxxxxx'x employment
with Chronimed, and / or the cessation of Xx. Xxxxxx'x employment with
Chronimed. Chronimed and Xx. Xxxxxx agree that, by signing this Agreement, Xx.
Xxxxxx does not waive any claims with respect to Chronimed's performance of its
obligations under this Agreement.
4. As an essential inducement to Xx. Xxxxxx to enter this Agreement,
and as consideration for the foregoing promises of Xx. Xxxxxx, Chronimed, its
officers, employees, agents, assigns, representatives, counsel, administrators,
successors, shareholders, and directors
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hereby release Xx. Xxxxxx from all liability for damages or claims of any kind
that have arisen as of the date of this Agreement, and agree not to institute
any claim for damages or otherwise, by charge or otherwise, nor authorize any
other party to institute any claim against Xx. Xxxxxx.
5. Xx. Xxxxxx is hereby informed of his right to rescind this Agreement
as far as it extends to potential claims under Minn. Stat. Section 363.01 et
seq. by written notice to Chronimed within fifteen (15) calendar days following
his execution of this Agreement. To be effective, such written notice must
either be delivered by hand or sent by certified mail, return receipt requested,
addressed to: Xx. Xxxxx X. Xxxxxxxxxxx, Chronimed Inc., 00000 Xxx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxx, 00000, delivered or postmarked within such fifteen (15)
day period. Xx. Xxxxxx understands that Chronimed will have no obligations under
this Agreement in the event such notice is timely delivered and any payments
made as of that date by Chronimed, pursuant to Section 2 above, shall be
immediately repaid by Xx. Xxxxxx to Chronimed.
6. Xx. Xxxxxx is hereby informed of his right to revoke this Agreement
as far as it extends to potential claims under the Age Discrimination in
Employment Act, 29 U.S.C. Sections 621 et seq. by informing Chronimed of his
intent to revoke this Agreement within seven (7) calendar days following his
execution of this Agreement. This revocation must be in writing, must
specifically revoke this Agreement, and must be received by Chronimed prior to
the 8th day following the execution of this Agreement. Xx. Xxxxxx understands
that Chronimed will have no obligations under this Agreement in the event such
notice is timely delivered and any payments made as of that date by Chronimed,
pursuant to Section 2 above, shall be immediately repaid by Xx. Xxxxxx to
Chronimed.
7. Xx. Xxxxxx agrees that he has been provided with a copy of this
Agreement and given a period of twenty-one (21) days during which time he has
been entitled to accept or revoke this Agreement. To the extent Xx. Xxxxxx has
taken less than 21 days to consider this Agreement, Xx. Xxxxxx acknowledges that
he has had sufficient time to consider the Agreement and to consult with counsel
and that he does not desire additional time.
8. Xx. Xxxxxx hereby covenants and agrees that for a period of one year
following the date identified in Paragraph 1, Xx. Xxxxxx shall not be engaged
within the United States, either directly or indirectly, in any matter or
capacity, whether as an advisor, principal, agent, partner, officer, director,
employee, member of a for-profit association, or otherwise, in any business or
activity, or own beneficially or of record, five percent or more of the
outstanding stock of any class of equity securities in any corporation in
competition with the business being conducted by Chronimed, MEDgenesis Inc. or
Hypoguard America Limited on the date identified in Paragraph 1, or any business
opportunity under active consideration or development by MEDgenesis Inc. on the
date identified in Paragraph 1. If Xx. Xxxxxx should breach the foregoing
covenant (i) Chronimed will cease making any payments or contributions required
under Paragraph 2 which are unpaid or remain to be paid at the time of such
breach, (ii) any remaining unexercised Chronimed stock options held by Xx.
Xxxxxx at the time of breach shall immediately be
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cancelled, and (iii) Xx. Xxxxxx'x participation in any Chronimed insurance plans
shall be immediately discontinued. Chronimed's remedies as stated in this
paragraph are in addition to and not exclusive of any others existing at law or
equity.
Additionally, at the option of Chronimed and upon written notice to Xx.
Xxxxxx on or before September 5, 2001, Chronimed may choose to extend the
foregoing covenant not to compete for a period of up to an additional twelve
months, beyond the initial twelve month period already stipulated herein. In
consideration for such election, the electing party agrees to make payment to
Xx. Xxxxxx at the time of its election in an amount equal to Xx. Xxxxxx'x
annualized salary in effect on the date identified in Paragraph 1 plus the
average of his annual bonus for Company fiscal years 1998, 1999, and 2000.
Xx. Xxxxxx further agrees that during any period in which he is
precluded from competing with the Company, as defined above, he will not
solicit, directly or indirectly, any employee of the Company or Hypoguard
America Limited for employment or engagement in any capacity outside of the
Company, its subsidiaries or affiliates.
Xx. Xxxxxx agrees that the scope and duration of the prohibition
against competition contained in this Agreement are reasonable and that he has
agreed to these restrictions upon advice of counsel.
9. The terms of this Agreement shall remain strictly confidential
between the parties hereto and shall not be disclosed to third persons unless
required by law. Notwithstanding the foregoing, Chronimed may notify Hypoguard
America Limited of the terms of Xx. Xxxxxx'x covenant not to compete as stated
in Paragraph 8.
10. Xx. Xxxxxx agrees that on or before January 31, 2001, he will
return to Chronimed any property of Chronimed in his possession or control.
11. Xx. Xxxxxx agrees that he will make no statements, whether written
or oral, which are adverse to the best interests or are intended or likely to
cause disparagement of Chronimed, Hypoguard America Limited, their respective
subsidiaries, divisions, businesses, directors, officers, employees, agents, or
representatives. Chronimed agrees that it will make no statements, whether
written or oral, which are adverse to the best interests or are intended or
likely to cause disparagement of Xx. Xxxxxx. Chronimed and Xx. Xxxxxx agree that
each will respond to inquiries regarding Xx. Xxxxxx'x separation by indicating
that the separation was of mutual agreement.
12. This Agreement shall not in any way be construed as an admission by
Chronimed that it has acted wrongfully with respect to Xx. Xxxxxx or any other
person, or that Xx. Xxxxxx has any rights whatsoever against Chronimed.
Chronimed specifically disclaims any liability to, or wrongful acts against, Xx.
Xxxxxx or any other person, on the part of itself, its directors, its officers,
its employees, its representatives or its agents.
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13. This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof. Xx. Xxxxxx hereby affirms that his rights
to payments or benefits from Chronimed are specified exclusively and completely
in this Agreement. Any modification of, or addition to, this Agreement must by
in writing, signed by Chronimed and Xx. Xxxxxx.
14. This Agreement is personal to Xx. Xxxxxx and may not be assigned by
Xx. Xxxxxx without the written agreement of Chronimed. Chronimed may assign this
agreement but any such assignment shall not relieve Chronimed of liability for
performance of its obligations herein.
15. This Agreement constitutes a contract enforceable against either
party and shall be construed and enforced in accordance with the laws of the
State of Minnesota. Nothing contained in this Agreement is intended to violate
any applicable law. If any part of this Agreement is construed to be in
violation of a state and / or federal law, then that part shall be null and
void, but the balance of the provisions of this Agreement shall remain in full
force and effect.
16. In the event of a claimed breach of any covenant or obligation
under this Agreement, the claiming party shall provide the other party with
written notice of the claim and the receiving party shall have ten days
opportunity to cure the claimed breach.
17. Xx. Xxxxxx hereby affirms and acknowledges that he has read the
foregoing Agreement and that he has been advised to consult with an attorney
prior to signing this Agreement. Xx. Xxxxxx agrees that the provisions set forth
in this Agreement are written in language understandable to him and further
affirms that he understands the meaning of the terms of this Agreement and their
effect. Xx. Xxxxxx represents that he enters into this agreement freely and
voluntarily.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
signatures below.
Dated: January 8, 2001 /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx XX
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Subscribed and sworn to before me this 8th day of January, 2001.
/s/ Xxxxxxx X. Xxxxxxxxx
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Notary Public
Dated: January 8, 2001 CHRONIMED INC.
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By /s/ Xxxxx X. Xxxxxxxxxxx
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Its CEO
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Subscribed and sworn to before me this 8th day of January, 2001.
/s/ Xxxxxxx X. Xxxxxxxxx
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Notary Public
