SEPARATION AGREEMENT, GENERAL RELEASE OF ALL CLAIMS AND COVENANT NOT TO SUE
Exhibit 10.1
SEPARATION AGREEMENT, GENERAL RELEASE
OF ALL CLAIMS AND COVENANT NOT TO XXX
OF ALL CLAIMS AND COVENANT NOT TO XXX
This Separation Agreement, General Release of All Claims and Covenant Not to Xxx (the
“Agreement”) is entered into as of the 5th day of June, 2006 by and between LHC Group,
Inc. (hereinafter “Company”) and X. Xxxx Xxxxx (hereinafter “Employee”).
WHEREAS, Employee is currently employed by Company as Senior Vice President and Chief
Financial Officer (“CFO”) pursuant to an Employment Agreement dated January 2005 and amended in
April, 2005 (the “Employment Agreement”); and
WHEREAS, Employee desires to voluntarily terminate his employment with Company and resign from
the Company’s Board of Directors in order to pursue other employment opportunities; and
WHEREAS, Company has accepted Employee’s voluntary resignation and has agreed to provide
severance benefits to Employee, which the parties agree are above and beyond what Employee would be
entitled to under his Employment Agreement; and
WHEREAS, the parties to this Agreement desire to resolve all issues between them relating to
Employee’s employment and the resignation of that employment;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company and Employee agree as follows:
| 1. | Termination of Employment. |
Employee’s last day of employment shall be June 30, 2006 (the “Resignation Date”). Employee
and Company mutually acknowledge and agree that Employee and Company have met all of their
respective obligations under all agreements between Company and Employee governing the Employee’s
employment and/or compensation or benefits, including but not limited to the Employment Agreement.
The parties agree that, except for the Separation Pay, Health Insurance Benefits and Quarterly
Bonus specifically provided for in Paragraph 2 of this Agreement, Company shall owe no additional
amounts to Employee for wages, commissions, back pay, severance pay, bonuses, retirement benefits,
stock awards, stock options, change of control payments, accrued vacation, benefits, insurance,
sick leave, other leave, or any other reason after the Resignation Date. Employee acknowledges
that if the Company hires a new Senior Vice President and Chief Financial Officer prior to the
Resignation Date, Employee will continue to work as an employee of the Company through the
Resignation Date, but will not hold the office of Senior Vice President and Chief Financial
Officer. Further, Employee acknowledges that his tenure as a member of the Company’s Board of
Directors shall terminate at the 2006 annual meeting of the Company’s stockholders, which is
scheduled for June 13, 2006.
| 2. | Severance Benefits. |
(a) In consideration of Employee’s promises herein, including but not limited to the release
and covenant not to xxx contained in Paragraph 3 of this Agreement, Company agrees to continue to
pay Employee at his current annual salary of Two-Hundred-Seventy-Five-Thousand Dollars and Zero
Cents ($275,000.00) for the period through and including September 30, 2006 (the “Separation Pay”).
This Separation Pay shall be paid out in accordance with Company’s normal payroll practices and
shall be subject to all applicable federal, state and local tax withholdings. Additionally, in the
event that Employee elects to continue his health insurance benefits pursuant to COBRA, Company
agrees to pay those COBRA premiums through and including September 30, 2006 (the “Health Insurance
Benefits”). In the event that Employee fails to execute the additional general release of claims
referenced in Paragraph 12 of this Agreement, Company shall have no obligation to pay, and Employee
shall not be entitled to receive, the Separation Pay and Health Insurance Benefits.
(b) In addition to the Separation Pay and Health Insurance Benefits, Employee shall be
entitled to receive his Short-Term Cash Incentive (the “Quarterly Bonus”) for the Third Quarter of
2006, provided that Company meets its EPS target and any other applicable prerequisites and
conditions precedent for payment of the Quarterly Bonus. Employee acknowledges and agrees that he
will not be eligible to receive any additional bonus payments under the Short-Term Cash Incentive
Plan, including but not limited to any “true up” payment to be made at the end of 2006. Employee
further acknowledges and agrees that he shall not be eligible to receive any Long Term Stock
Incentive (Annual Stock Award) for 2006.
(c) As of the Resignation Date, Employee owns 219,723 shares of the Company’s outstanding
$0.01 par value common stock that was granted under either the Company’s 2005 Long-Term Incentive
Plan (the “LTIP”) or the Company’s 2003 Key Employee Equity Participation Plan and which is fully
vested (the “Vested Shares”). The Vested Shares shall remain outstanding and shall continue to be
held by Employee following the Resignation Date. As of the Resignation Date, Employee owns 8,731
shares of unvested restricted stock that was granted under the LTIP (the “Unvested Shares”). As of
the Resignation Date, the Unvested Shares shall be forfeited by Employee and shall no longer remain
outstanding. Employee shall have no further rights with respect to the Unvested Shares.
(d) The parties acknowledge and agree that the above payments and agreements have been
negotiated and agreed upon voluntarily by both parties. The parties also acknowledge and agree
that these amounts exceed any and all pay and benefits to which Employee already may have been
entitled by contract or law, or for any other reason, and that they constitute good, valuable and
sufficient consideration for Employee’s covenants and agreements contained in this Agreement.
| 3. | Release Of All Claims And Potential Claims Against Company and Covenant Not To Xxx. |
In consideration of the payments made to him by Company and the other covenants and promises
contained in this Agreement, Employee, with the intention of binding himself and all of his heirs,
executors, administrators and assigns, does hereby release, remise, acquit and forever discharge
Company and all of its past and present officers, directors, stockholders, employees, agents,
parent corporations, predecessors, subsidiaries, affiliates, estates, successors, assigns, partners
and attorneys (hereinafter “Releasees”) from any and all claims, charges, actions, causes
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of action, sums of money due, suits, debts, covenants, contracts, agreements, rights, damages,
promises, demands or liabilities (hereinafter collectively referred to as “Claims”) whatsoever, in
law or in equity, whether known or unknown, suspected or unsuspected, which Employee, individually
or as a member of any class, now has, owns or holds or has at any time heretofore ever had, owned
or held against Company or any of the Releasees, including but not limited to those Claims arising
out of or in any way connected with Employee’s employment with Company or any of the other
Releasees or the termination of any such employment relationship. This release and covenant not to
xxx includes, but is not limited to, claims for infliction of emotional distress, claims for
defamation, claims for personal injury of any kind, claims for breach of contract, claims for
harassment and claims arising under federal, state or local laws prohibiting employment
discrimination and claims growing out of any legal restrictions on Company’s rights to terminate
its employees or to take any other employment action, whether statutory, contractual or arising
under common law or case law. Employee specifically acknowledges and agrees that his release and
covenant not to xxx includes, but is not limited to, any and all rights under federal and state
employment laws including without limitation the Age Discrimination in Employment Act of 1967
(“ADEA”), as amended, 29 U.S.C. § 621, et seq., the Civil Rights Act of 1964
(“Title VII”), as amended (including amendments made through the Civil Rights Act of 1991), 42
U.S.C. § 2000e, et seq., 42 U.S.C. § 1981, as amended, the Americans With Disabilities Act (“ADA”),
as amended, 42 U.S.C. § 12101, et seq., the Rehabilitation Act of 1973, as amended,
29 U.S.C. § 701, et seq., the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended, 29 U.S.C. § 301, et seq., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. § 2101, et seq., the Family and Medical
Leave Act of 1993 (“FMLA”), as amended, 29 U.S.C. § 2601 et seq., the Fair Labor Standards Act
(“FLSA”), as amended, 29 U.S.C. § 201 et seq. the Employee Polygraph Protection Act
of 1988, 29 U.S.C. § 2001, et seq., and all state and federal workers’ compensation
laws. Employee warrants that he has not filed any type of claim against Company.
| 4. | Non-Admission of Liability. |
Employee and Company agree that this Agreement shall not in any way be construed or
interpreted as an admission of liability or wrongdoing by Company or Employee, any such liability
or wrongdoing being expressly denied.
| 5. | Nondisparagement. |
Employee agrees and covenants that he will not make any derogatory or disparaging statements
about or relating to Company, its business practices, its products or its employment practices. In
exchange, Company agrees to issue the mutually agreed upon press release pertaining to Employee’s
voluntary termination of employment.
| 6. | Return of Materials. |
Employee agrees to return all documents, materials, equipment, keys, Company credit cards,
financial information, customer information, Trade Secrets (as defined by applicable state or
federal law), sales information, contracts, order information, customer contact information,
correspondence relating to Company, a customer or any Releasee, computer data and other material
and information relating to Company, any of the Releasees or Company’s business and not to retain
or provide to anyone else any copies thereof. By executing this Agreement, Employee warrants and
agrees that he shall return all such information and material to the Company no later than 5:00
p.m. on June 30, 2006.
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| 7. | Confidentiality of this Agreement. |
The provisions of this Agreement shall be held in strictest confidence by Employee and
Employee shall not publicize or disclose the terms of this Agreement, including any communications
leading up to the execution of this Agreement, in any manner whatsoever; provided, however, that
Employee may disclose the terms of this Agreement: (a) to Employee’s immediate family; (b) to
Employee’s attorney, accountant, and financial advisor; and (c) as required by order of a court of
competent jurisdiction or as otherwise required by law.
| 8. | Acknowledgment. |
Company hereby advises Employee to consult with an attorney prior to executing this Agreement.
Employee expressly acknowledges and agrees that he has read this Agreement carefully, that he has
had ample time and opportunity to consult with an attorney or other advisor of his choosing
concerning his execution of this Agreement, that Company has advised him, and hereby does advise
him, of his opportunity to consult an attorney or other advisor and has not in any way discouraged
him from doing so, that he fully understands that this Agreement is final and binding, that this
Agreement contains a release of potentially valuable claims, and that the only promises or
representations he has relied upon in signing this Agreement are those specifically contained in
the Agreement itself. Employee also acknowledges and agrees that he has been offered at least
twenty-one (21) days to consider this Agreement before signing and that he is signing this
Agreement voluntarily, after consulting with his attorney, with the full intent of releasing
Company from all claims.
| 9. | Effective Date and Revocation. |
This Agreement shall become effective and enforceable at 12:01 a.m. on the eighth (8th) day
immediately following the date of execution of this Agreement and the parties agree that Employee
may revoke the Agreement at will prior to that time by giving written notice of the revocation to
Company. Such notice must be delivered to Xxxxx X. Xxxxx, President and Chief Executive Officer of
the Company, and must be received by him at or before the above-mentioned eighth-day deadline.
Employee agrees that, if he revokes the Agreement prior to that time, he will return to Company any
and all payments already received pursuant to this Agreement. The Agreement may not be revoked
after expiration of the above-described revocation period and, if after such time, Employee
attempts to rescind, revoke or annul this Agreement or if he attempts at any time to make, assert
or prosecute any claim(s) covered by the release contained in Paragraph 3 above, he will, prior to
filing or instituting such claim(s), return to Company any all payments already received by him
under this Agreement, plus interest at the highest legal rate, and, if Company prevails in
defending the enforceability of any portion of the Agreement or in defending itself against any
such claim brought by Employee, he will pay Company ‘s attorney’s fees and costs incurred in
defending itself against the claim(s) and/or the attempted revocation, recission or annulment;
provided, however, that Employee shall not be required to repay the monies paid to him under the
terms of this Agreement or pay Company all of its attorneys’ fees and costs incurred in its defense
of Employee’s action (except those attorneys’ fees or costs specifically authorized under federal
or state law) in the event that Employee seeks to challenge his waiver of claims under the ADEA.
Nothing in this Agreement shall limit Company’s rights to seek and obtain other remedies for breach
of this Agreement.
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| 10. | Governing Law. |
This Agreement shall be governed by and construed in accordance with the laws of the state of
Louisiana.
| 11. | Voluntary and Knowing Execution. |
Each of the parties to this Agreement certify that they have read this Agreement in its
entirety and fully understand its contents and effect. Each of the parties to this Agreement
acknowledges that this Agreement is made and executed by and of their own free will. The parties
recognize that this Agreement and the release called for by Exhibit A is a full, final and complete
release of all claims.
| 12. | General Release To Be Executed Upon Termination Date. |
In consideration for the Severance Pay and Health Insurance Benefits, and as a material
precondition to Employee’s receipt of the Separation Pay and Health Insurance Benefits, Employee
agrees that upon Resignation Date he will execute a general release of the Company in the form of
Exhibit A hereto.
| 13. | Authority. |
Employee and Company represent and warrant each to the other that (i) each has all requisite
power and authority to enter into this Agreement, and (ii) this Agreement has been duly authorized,
executed and delivered by each of them and constitutes a legal, valid and binding obligation of
each of them, enforceable against each of them in accordance with its terms.
| 14. | Counterparts. |
The parties agree that this Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
| 15. | Severability. |
With the exception of the release contained in Paragraph 3 above, if any provision of this
Agreement is unenforceable or is held to be unenforceable, such provision shall be fully severable,
and this Agreement and its terms shall be construed and enforced as if such unenforceable provision
had never comprised a part hereof, the remaining provisions hereof shall remain in full force and
effect, and the court construing the provisions shall add as a part hereof a provision as similar
in terms and effect to such unenforceable provision as may be enforceable in lieu of the
unforceable provision. In the event that the release contained in Paragraph 3 above is
unenforceable or is held to be unforceable, the parties understand and agree that the remaining
provisions of the Agreement shall be rendered null and void and that neither party shall have any
further obligation under any provision of this Agreement.
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| 16. | Entire Agreement. |
Except as otherwise provided below in this Paragraph 16 of this Agreement and the release
provided for in Section 12, the parties hereto acknowledge and agree that this Agreement contains
the entire agreement between Employee and Company with respect to the subject matter hereof and
that it supersedes and invalidates any previous agreements or contracts to the contrary, including
but not limited to the Employment Agreement. No representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein shall be of any force or effect.
Notwithstanding the foregoing, nothing contained in this Agreement shall invalidate or otherwise
impair the enforceability of the covenants set forth in Section 14 of the Employment Agreement (as
amended), which shall remain in full force and effect.
[SIGNATURES ON FOLLOWING PAGE]
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The parties hereby agree to all of the above terms and signify their agreement by their
signatures below.
| X. XXXX XXXXX | ||||||
| /s/ X. Xxxx Xxxxx | ||||||
DATE: June 5, 2006 |
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| LHC GROUP, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxx | |||||
| Name: | Xxxxx X. Xxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
DATE: June 5, 2006 |
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EXHIBIT A
GENERAL RELEASE OF ALL CLAIMS
AND COVENANT NOT TO XXX
AND COVENANT NOT TO XXX
This General Release of All Claims and Covenant Not to Xxx (this “Agreement”) is entered into
as of the 1st day of July, 2006 by X. Xxxx Xxxxx (hereinafter “Employee”) in favor of
LHC Group, Inc. (hereinafter “Company”).
WHEREAS, Employee was employed by Company as Senior Vice President and Chief Financial Officer
(“CFO”) pursuant to an Employment Agreement dated January 2005 and amended in April , 2005 (the
“Employment Agreement”); and
WHEREAS, Employee voluntarily terminated his employment with Company and resigned from the
Company’s Board of Directors in order to pursue other employment opportunities; and
WHEREAS, Company and Employee entered into a Separation Agreement, General Release of All
Claims and Covenant Not to Xxx, dated June 5, 2006 (the “Separation Agreement”) pursuant to
which Employee agreed to enter into this Agreement on his last day of employment with Company.
NOW THEREFORE, in consideration of the covenants and agreements set forth in the Separation
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Employee agree as follows:
In consideration of the payments made to him by Company and the other covenants and promises
contained in the Separation Agreement, Employee, with the intention of binding himself and all of
his heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever
discharge Company and all of its past and present officers, directors, stockholders, employees,
agents, parent corporations, predecessors, subsidiaries, affiliates, estates, successors, assigns,
partners and attorneys (hereinafter “Releasees”) from any and all claims, charges, actions, causes
of action, sums of money due, suits, debts, covenants, contracts, agreements, rights, damages,
promises, demands or liabilities (hereinafter collectively referred to as “Claims”) whatsoever, in
law or in equity, whether known or unknown, suspected or unsuspected, which Employee, individually
or as a member of any class, now has, owns or holds or has at any time heretofore ever had, owned
or held against Company or any of the Releasees, including but not limited to those Claims arising
out of or in any way connected with Employee’s employment with Company or any of the other
Releasees or the termination of any such employment relationship. This release and covenant not to
xxx includes, but is not limited to, claims for infliction of emotional distress, claims for
defamation, claims for personal injury of any kind, claims for breach of contract, claims for
harassment and claims arising under federal, state or local laws prohibiting employment
discrimination and claims growing out of any legal restrictions on Company’s rights to terminate
its employees or to take any other employment action, whether statutory, contractual or arising
under common law or case law. Employee specifically acknowledges and agrees that his release and
covenant not to xxx includes, but is not limited to, any and all rights under federal and state
employment laws including without limitation the Age Discrimination in Employment Act of 1967
(“ADEA”), as amended, 29 U.S.C. § 621, et seq., the Civil Rights Act of 1964
(“Title VII”), as amended (including amendments made through the Civil Rights Act of 1991), 42
U.S.C. § 2000e, et seq., 42 U.S.C. § 1981, as amended, the Americans With Disabilities Act (“ADA”),
as amended, 42 U.S.C. § 12101, et seq., the Rehabilitation Act of 1973, as amended,
29 U.S.C. § 701, et seq., the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended, 29 U.S.C. § 301, et seq., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. § 2101, et seq., the Family and Medical
Leave Act of 1993 (“FMLA”), as amended, 29 U.S.C. § 2601 et seq., the Fair Labor Standards Act
(“FLSA”), as amended, 29 U.S.C. § 201 et seq. the Employee Polygraph Protection Act
of 1988, 29 U.S.C. § 2001, et seq., and all state and federal workers’ compensation
laws. Employee warrants that he has not filed any type of claim against Company.
The undersigned hereby agrees to all of the above terms and signifies his agreement by his
signatures below.
| X. XXXX XXXXX | ||||||||
DATE:
|
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