EXHIBIT 10.27
SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE is made and entered
into by and between PhyCor, Inc., (hereinafter the "Company") and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇, (hereinafter "Employee") with respect to the end of Employee's employment
with the Company.
W I T N E S S E T H :
WHEREAS, Employee has been employed by the Company since its
inception, and Employee and Company are parties to a written Employment
Agreement dated June 8, 2000 (the "Agreement");
WHEREAS, the parties desire to embody in this Separation Agreement
and General Release the settlement of all obligations applicable to Employee's
termination of employment, and, except with respect to the Agreement and as
provided herein, this Separation Agreement and General Release will supersede
all prior oral and written agreements, arrangements and understandings relating
to the terms and conditions of Employee's employment and termination of such;
THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. Termination Date. This Separation Agreement and General Release
will become effective upon the earlier to occur of (i) the date when Employee
ceases to become President and Chief Executive Officer of the Company or (ii)
commencement of a voluntary Chapter 11 case by the Company (the "Filing Date").
On the Filing Date, Employee hereby relinquishes his position as President and
Chief Executive Officer of the Company and each of its subsidiaries. Employee
shall remain in the capacity and with the position as Chairman of the Board of
Directors of the Company and each subsidiary. On the date the Company's plan of
reorganization becomes effective, Employee's employment with the Company shall
cease and he shall relinquish the position as Chairman; provided, however,
Employee may, at any time after thirty days written notice, relinquish the
position as Chairman and accelerate the date his employment will finally
terminate (the date Employee's employment terminates shall be referred to herein
as the "Separation Date").
2. Compensation and Benefits. During the period from the date hereof
until the Separation Date, Company shall pay Employee the salary and benefits,
and reimburse business expenses, all as set forth in the Agreement. In addition,
The Company shall continue to provide Employee with administrative support and
office facilities consistent with past practice. The parties agree that the
execution of this Agreement by the Company constitutes a termination of
Employee's employment under Section 10(e) of the Agreement, notwithstanding the
fact that Employee will continue as an employee of the Company until the
Separation Date. Accordingly, on or before the
Separation Date, the Company may not take the position that Employee's
employment has not been terminated or that it has been terminated under any
other provision of the Agreement. Section 10(e) of the Agreement provides that
upon termination, Employee shall receive a "Severance Amount" of $1,750,000.
Pursuant to Section 5(c) of the Agreement, Employee received in 2001 a "Bonus
Payment" (as defined therein) equal to $1,750,000 which is to be credited
against any amounts which may become owing to Employee under Section 10(e).
Accordingly, Employee shall not be entitled to any additional severance or bonus
payments.
In addition, after the Separation Date, Employee shall not
participate in the Company's health or dental plans, life or disability
insurance plans, 401(k), retirement and/or thrift plan, the Company's cafeteria
plan or any other benefit or stock plan sponsored by the Company. Employee may
elect health continuation coverage for himself and his covered dependents under
the Company's medical plans as required by COBRA, however, Employee will be
required to make all COBRA premium payments on behalf of himself and his
dependents.
Employee acknowledges that the amounts received pursuant to the
Agreement are adequate consideration for Employee's agreements contained herein
and constituted full payment and settlement of any and all amounts and benefits
otherwise due, payable or owing to Employee under the Agreement and any other
agreements, plans or arrangements providing for payments, benefits or
perquisites of any kind, including, but not limited to, those described in the
Agreement The amounts paid under the Agreement satisfy all obligations of the
Company under any severance plan or other arrangement governed by the Employee
Retirement Income Security Act of 1974 or any other state or federal law.
Employee shall, however, be entitled to any funds accrued in the Company's
401(k) plan prior to the Separation Date, to the extent and in accordance with
the terms of the plan.
3. Company Property. On or before the Separation Date, Employee
agrees to return to the Company all files, memoranda, documents, records, copies
of the foregoing, and any other property of the Company or its affiliates in
Employee's possession.
4. No Admission. This Separation Agreement and General Release shall
not in any way be construed as an admission by either party of any wrongful
conduct whatsoever against any person or party.
5. No Complaints. Employee represents that he has not filed any
complaints or charges against the Company with any local, state or federal
agency or Court related to Employee's employment with or separation from the
Company, that, other than with respect to a breach of this Separation Agreement
and General Release, Employee will not do so at any time hereafter, and that if
any such agency or Court assumes jurisdiction of any such complaint or charge
against the Company on behalf of Employee, Employee will request such agency or
Court to withdraw from the matter.
6. Release. Employee, for himself and his family, heirs, executors,
administrators, legal representatives, and their respective successors and
assigns (collectively, the Employee Related Persons") hereby irrevocably and
unconditionally releases the Company and each of the Company's owners,
stockholders, successors, assigns, directors, officers, employees, affiliates
(collectively "Releasees"), or any of them, from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorney's fees and costs actually
incurred), of any nature whatsoever pertaining to his employment with or
separation from the Company, known or unknown (hereafter referred to as "Claim"
or "Claims"), which Employee now has, owns or holds, or claims to have, own or
hold, or which Employee at any time hereafter may have, own or hold, or claim to
have, own or hold, against each or any of the Releasees. This includes a release
of any rights or claims Employee may have under the Age Discrimination in
Employment Act, which prohibits age discrimination in employment; Title VII of
the Civil Rights Act of 1964, which prohibits discrimination in employment based
on race, color, national origin, religion or sex; the Equal Pay Act, which
prohibits paying men and women unequal pay for equal work; the Americans With
Disabilities Act, which prohibits discrimination on the basis of disability; the
Employee Retirement Income Security Act of 1974; or any other federal, state or
local laws or regulations prohibiting employment discrimination or regarding
termination of employment. This also includes a release by Employee of any
claims for wrongful discharge or breach of employment contract.
The Company, for itself and the Releasees, hereby releases and
forever discharges Employee and the Employee Related Persons from all rights,
claims or demands Company or any of the Releasees may have, arising at any time
on or before the date hereof, based on Employee's employment with the Company or
any Releasee, or the termination of that employment, Employee's service as an
officer of the Company or any of the Releasees or Employee's service as a member
of the Board of Directors of the Company or any of the Releasees. The Company
hereby agrees for itself and the other Releasees, never, individually or with
other persons, to file or commence the filing of, any charges, lawsuits,
complaints or proceedings with any governmental agency, or against Employee or
any Employee Related Person, with respect to the matters released by the Company
and the Releasees hereunder.
Employee and the Company each expressly waives and relinquishes all
rights and benefits afforded by any statute or judicial doctrine to the general
effect that,
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him, must have materially affected
his settlement with the debtor."
and does so understanding and acknowledging the significance and consequence of
such waiver.
Thus, notwithstanding the provisions of such a statute or judicial
doctrine, and for the purpose of implementing a full and complete release and
discharge of the releasees, Employee and the Company, each expressly
acknowledges that this Separation Agreement and General Release is intended to
include in its effect, without limitation (except as provided below), all Claims
which he or it does not know or suspect to exist in his or its favor at the time
of execution hereof, and that this Separation Agreement and General Release
contemplates the extinguishment of any such Claim or Claims, as they may pertain
to Employee's employment with or separation from the Company.
Because of this release, Employee understands that, subject to the
exceptions in the following paragraph, he is giving up any right he may have to
▇▇▇ the Company for matters related to his employment with or separation of
employment from the Company.
Nothing contained herein is intended to release either party of his
or its obligations under this Separation Agreement and General Release or under
the Agreement as it relates to Employee's separation. This release does not
include, however, a release of Employee's right, if any, to benefits under the
PhyCor Savings and Profit Sharing Plan and any medical, disability, or life
insurance benefits under COBRA. Nor does this Separation Agreement and General
Release waive or release any rights or claims that Employee may have under the
Age Discrimination in Employment Act which arise after the date Employee signs
this Separation Agreement and General Release.
7. Prior Agreement. By execution of this Separation Agreement and
General Release, the Company and Employee agree that, subject to the exceptions
described in the following sentence, the Employment Agreement shall be
terminated effective the Separation Date. (A copy of said Employment Agreement
is attached hereto as Exhibit A.) The parties expressly agree, however, that the
provisions of section 13 of said Agreement, pertaining to non-competition and
confidentiality, shall remain in full force and effect after the Separation Date
and are incorporated herein by reference. For purposes of the non-compete time
period, Employee's termination date shall be the date of execution of this
Separation Agreement.
8. Certain Litigation Matters. The parties recognize that Employee
has been named individually in several pending lawsuits against the Company and
other individuals, and Employee may be named in additional actions. The Company
agrees that it will continue to provide a defense for Employee and will continue
to indemnify Employee with respect to any costs, expenses, or losses relating to
any present or future actions relating to his role as an executive, officer or
director of the Company, its subsidiaries or affiliates to the same extent as
allowed under the Company's current
Bylaws or under current Company policy with respect to claims against
executives, officers and directors of the Company. Employee agrees that he will
participate in, and cooperate with, such defense without additional compensation
from the Company, provided, that the Company will reimburse Employee with
respect to any expense incurred by Employee as the result of participating in,
and cooperating with, such defense. It is the intent of the parties that this
Agreement shall neither limit Employee's indemnification rights from those
currently available to Employee nor provide Employee with any additional right
to indemnification; provided, however, the Company agrees that during his tenure
as a Non-Employee Director, Employee shall be entitled to the same
indemnification protections as all other Non-Employee Directors.
9. Non-Disparagement. Employee agrees that he will not at any time
after the date hereof disparage or otherwise make any statement or take any
action which could reasonably be expected to injure the business or reputation
of the Company or any of its subsidiaries, officers, directors, shareholders or
any of their respective affiliates. Company agrees that it will not at any time
after the date hereof disparage or otherwise make any statement or take any
action which could reasonably be expected to injure the reputation of Employee.
The obligations under this Section 9 will not apply to disclosures required by
applicable law, regulation or order of a court or governmental agency.
10. Opportunity for Advice. The Company encourages Employee to
consider thoroughly all aspects of this Separation Agreement and General Release
and to consult with an attorney chosen by Employee regarding this Separation
Agreement and General Release. Employee acknowledges that he has had reasonable
opportunity to consider advice from his legal counsel regarding all aspects of
this Separation Agreement and General Release, and he has carefully read all of
the provisions of this Separation Agreement and General Release and that
Employee is voluntarily entering into this Separation Agreement and General
Release. Employee further understands that the Company is relying on this and
all other representations he has made herein.
11. No Reliance. Employee represents and acknowledges that in
executing this Separation Agreement and General Release, Employee does not rely
and has not relied upon any representation or statement made by any of the
Releasees or by any of the Releasees' agents, representatives or attorneys with
regard to the subject matter, basis or effect of this Separation Agreement and
General Release or otherwise.
12. Binding Effect. This Separation Agreement and General Release
shall be binding upon, and inure to the benefit of, the parties hereto, their
heirs, administrators, representatives, executors, successors and assigns, and
to the benefit of Releasees and each of them, and to their heirs.
13. Review Period; Revocation. Employee understands that Employee
has been given a period of twenty-one (21) days to review and consider this
Separation Agreement and General Release before signing it. Employee understands
that Employee may use as much of this twenty-one (21) day period as Employee
wishes prior
to signing. Employee may revoke this Separation Agreement and General Release
within seven (7) days of Employee's signing it. Revocation can be made by
delivering a written notice of revocation to ▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President of
Human Resources, PhyCor, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. For this revocation to be effective, written notice must be
received by no later than the close of business on the seventh day after
Employee signs this Separation Agreement and General Release. If Employee
revokes this Separation Agreement and General Release, it shall not be effective
or enforceable and Employee will not receive the benefits described herein.
14. Press Release. The Company and Employee will, on the Filing
Date, issue a mutually agreeable press release setting forth information
relating to Employee's separation from the Company as set forth in Exhibit B
hereto. Employee acknowledges and agrees that the Company may disclose any
information as may be required to satisfy its obligations as a public company or
as may be necessary to complete its restructuring.
15. Miscellaneous:
(a) This Separation Agreement and General Release is made and
entered into in the State of Tennessee, and shall, in all respects, be
interpreted, enforced and governed under the laws of said State.
(b) The language of all parts of this Separation Agreement and
General Release shall, in all cases, be construed as a whole, according to its
fair meaning, and not strictly for or against any of the parties.
(c) Should any provision of this Separation Agreement and General
Release be declared or be determined by any Court 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 Separation Agreement and General Release.
(d) As used in this Separation Agreement and General Release, the
singular or plural number shall be deemed to include the other whenever the
context so indicates or requires.
(e) This Separation Agreement and General Release sets forth the
entire agreement between the parties hereto, and fully supersedes any and all
prior agreements or understandings between the parties hereto pertaining to the
subject matter hereof.
PLEASE READ CAREFULLY. THIS SEPARATION AGREEMENT AND GENERAL RELEASE
INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS.
Executed this 22 day of January, 2002.
Witness: /s/ N. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executed this 22nd day of January, 2002.
PhyCor, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Attest: /s/ N. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Title: EVP & CFO
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Secretary
