Exhibit 10.51b
VOLUNTARY SEPARATION AGREEMENT AND RELEASE
This memorandum sets forth the terms and conditions of the Voluntary
Separation Agreement and Release ("Agreement") between Xxxx X. Xxx, on his own
behalf and on behalf of his estate, heirs, executors, administrators, attorneys,
successors and assigns (hereinafter collectively referred to as the "Employee")
and The WellCare Management Group, Inc., and its parent(s), branches, agencies,
subsidiaries, affiliates, related companies and divisions and their respective
successors, assigns, representatives, agents, officers, directors, shareholders
and employees, whether current or former (hereinafter collectively referred to
as "WellCare").
WHEREAS, the Employee and WellCare have agreed that the Employee's
employment with WellCare will immediately cease effective the date of the
closing of the transaction between Xxxxx X. Xxxxx, M.D. and WellCare (the
"Termination Date").
WHEREAS, the Employee shall voluntarily resign as an officer and member of
the Board of Directors of WellCare, effective the date of the closing of the
transaction between Xxxxx X. Xxxxx, M.D. and WellCare. Notwithstanding anything
to the contrary in this Agreement, the date of the closing of the transaction
between Xxxxx X. Xxxxx, M.D. and WellCare, shall be Employee's final date of
employment with WellCare in any capacity.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and undertakings set forth herein, the Employee and WellCare agree as follows:
1. The employment agreement dated June 1, 1996, by and between the Employee
and WellCare, as amended by the Amendment to the Employment Agreement including
Exhibits A&B thereto, dated June 1, 1998 ("Employment Agreement"), and all
rights and obligations of the Employee and WellCare thereunder shall terminate
effective at 5:00 p.m. on the seventh day after the closing of the transaction
between Xxxxx X. Xxxxx, M.D. and WellCare, provided, however, that Employee does
not revoke this Agreement within seven (7) days after signing it pursuant to
paragraph 15 of this Agreement.
2. As consideration for the Employee's release of any and all claims
against WellCare as set forth in paragraph 3 herein and provided the Employee
does not revoke this agreement as set forth in paragraph 1 above and paragraph
15 below and subject to Employee's compliance with the terms of this Agreement,
WellCare agrees:
(A) to the maximum extent permitted by New York Corporate law, to indemnify
Employee against judgments, fines, penalties, amounts paid in settlement and
reasonable expenses actually incurred by Employee (including reasonable
attorney's fees) in the event Employee is made a party to any proceeding, other
than an action by or in the right of the company, by reason of the fact that the
Employee is or was an employee, officer, director or agent of the company.
WellCare may also advance to the Employee expenses incurred in defending any
such proceedings to the maximum extent permitted by New York State corporate
law, including agreement by Employee to repay such advanced sums if he is latter
found not to be indemnified by the company pursuant to New York corporate law.
In accordance with the foregoing, no such indemnification shall be made unless,
inter alia, Employee is successful on the merits in the defense of any preceding
referenced above, Employee acted in good faith and in a manner he reasonably
believed to be in the best interests of the company and, with respect to any
criminal action or proceeding, Employee had no reasonable cause to believe his
conduct was unlawful. It is hereby agreed that such rights of indemnification
shall be in addition to any rights of indemnification Employee may have as an
officer of the company, pursuant to bylaws of the company or otherwise present.
(B) to provide the Employee with a compensation equivalent to $180,000 to
be distributed as follows:
(i) a lump sum payment fifty thousand dollars ($50,000), less
applicable deductions, on or about the fourteenth day after the closing of the
proposed transaction between Xxxxx X. Xxxxx, M.D. and WellCare;
(ii) for twelve consecutive months, commencing 30 days from the
closing of the transaction between Xxxxx X. Xxxxx, M.D. and WellCare, a monthly
payment of $4,167.00, less applicable deductions;
(iii) a to be determined amount of shares of the Common Stock of The
WellCare Management Group, Inc. equivalent to the value of eighty thousand
dollars ($80,000) based on the closing stock price as of the date of the
authorization of the additional $5 million shares of common stock of WellCare.
The stock as issued to the Employee shall have a minimum floor price of $.51 per
share. In addition, WellCare shall, at its sole expense, use its best efforts to
have the shares issued to the Employee authorized and approved for public sale
by July 1, 2000. In the event registration and approval of the stock for public
sale is not completed by that date, for any reason whatsoever, WellCare, will,
upon receiving proper Board approval, purchase the stock back from the Employee
within ninety days following receiving written notice at the greater of the
current market price as of such date or $.51 per share.
(iv) to reimburse all reasonable health insurance expenses incurred by
Employee under Employee's family coverage health insurance prior to the date of
the closing of the transaction between Xxxxx X. Xxxxx, M.D. and WellCare.
During the period in which the Employee is receiving payments pursuant to this
paragraph 2(b), the Employee shall be reasonably available via telephone or in
person to answer questions from the President or Chief Executive Officer of
WellCare, or their designee, relating to those services the Employee performed
prior to the termination of his employment.
(C) to pay for the contribution of the Employee's health insurance
coverage, including Employee's spouse, for the period from the date of the
closing of the transaction between Xxxxx X. Xxxxx, M.D. and WellCare through May
31, 2001, pursuant to COBRA, if eligible. If the Employee resides outside the
service area, or is not eligible for COBRA, the company shall reimburse the
Employee for the cost of alternative coverage he obtains, up to a maximum of
$7,000.00 in total for the two-year period.
(D) to make a good faith attempt to transfer the company's executive life
insurance policy, or a portion thereof, to an individual policy. WellCare shall
continue to contribute towards the policy premium, at the current contribution
level, for a two year period commencing from the date of the closing of the
transaction between Xxxxx X. Xxxxx, M.D. and WellCare; and
(E) to waive, as of the date of its execution of this Agreement, all rights
it may have pursuant to paragraph 6 of the Employment Agreement.
3. In exchange for the payments and benefits set forth in paragraph 2 above
and for other good and valuable consideration, the Employee hereby releases
WellCare from any and all liability for any claims against WellCare as of the
date of this execution of this Agreement, whether known or unknown to him that
may arise under express or implied contract, federal, state, or local statute,
executive order, law, ordinance, tort or other obligations arising out of public
policy. This release includes but is not limited to any claims for
discrimination on the basis of race, color, sex, national origin, religion,
disability, age, marital status and veteran status, including but not limited to
any claims arising under Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1966, The Civil Rights Act of 1991, of the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the
Family and Medical Leave Act of 1993, the Employee Retirement Income Security
Act, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act
of 1938, the New York State Human Rights Law, and all claims for wages, monetary
or equitable relief, vacation, other employee fringe benefits, benefit plans,
medical plans, 401(k) plans, stock options plans or attorneys' fees. This
Agreement does not constitute any admission by WellCare that it has violated any
such law or legal obligation with respect to any aspect of the Employee's
employment or termination therefrom.
4. The Employee represents, warrants and acknowledges that WellCare owes
him no wages, commissions, bonuses, sick pay, personal leave pay, holiday pay,
severance pay, vacation pay, tuition reimbursement, stock options, auto
allowance, 401(k) Plan benefits or other compensation or benefits or payments or
forms of renumeration of any kind or nature, other than that specifically
provided for in this Agreement. Reference is made to the Employment Agreement,
to the Amendment to the Employment Agreement, and to the Option Agreements dated
September 9, 1995, June 1, 1996, June 1, 1996 and June 27, 1997 as well as any
and all other option agreements which have or may have been granted. Employee
and WellCare hereby acknowledge that as a result of Employee's termination of
employment, no options granted under the Option Agreements or otherwise shall
become exercisable; and that Employee further acknowledges and agrees that
WellCare has no further obligation to issue any options to the Employee under
the Employment Agreement or otherwise.
5. The Employee confirms that he has delivered to WellCare any and all
property and equipment of WellCare, including his beeper, phone, keys, laptop or
other computers, and any other WellCare items he may have had in his possession.
6. The Employee represents and agrees that; (a) he has not filed or caused
to be filed any lawsuits against WellCare in any Court whatsoever; (b) he has
not filed or caused to be file any charges or complaints against WellCare with
any municipal, state or federal agency charged with the enforcement of any law,
and (c) pursuant to and as a part of the Employee's complete, total and
irrevocable release and discharge of WellCare, the Employee agrees, to the
fullest extent permitted by law, not to file or cause to be filed a charge,
complaint, grievance, or demand for arbitration in any forum, which relates to
any matter that involves WellCare and that occurred on or before the date of the
Employee's execution of this Agreement.
7. The Employee agrees not to disclose the terms, contents or execution of
this Agreement, the claims that have been or could have been raised against
WellCare as of the date of execution of this Agreement, and the facts and
circumstances underlying any such claims except in the following circumstances:
A. The Employee may disclose the terms of this Agreement to his
immediate family, so long as such family member agrees to be bound by the
confidential nature of this Agreement;
B. The Employee may disclose the terms of this Agreement to (i) his
counsel, tax advisors, auditors or accountants, so long as such persons agree in
writing to be bound by the confidential nature of this Agreement, or (ii) taxing
authorities, if requested by such authorities and so long as they are advised in
writing of the confidential nature of this Agreement; and
C. Pursuant to the order of a court or governmental agency of
competent jurisdiction, or otherwise as may be required by law, or for purposes
of securing enforcement of the terms and conditions of this Agreement.
8. In the event the Employee is asked about the circumstances of his
termination by a prospective employer he may state only that WellCare and the
Employee mutually agreed to terminate his employment, both parties will state
that the Employee's work performance was satisfactory and both parties mutually
agreed to terminate Employee's position so that the Employee could seek other
opportunities. Neither party shall make derogatory comments about the other.
9. The terms, contents or execution of this Agreement, any claims that have
been or could have been raised against WellCare as of the date of execution of
this Agreement, and the facts and circumstances underlying any such claims shall
not be admissible in any litigation, arbitration or proceeding in any forum for
any purpose other than to secure enforcement of the terms and conditions of this
Agreement, except as required by law.
10. Employee agrees not to issue any communication, written or otherwise,
that disparages, criticizes or otherwise reflects adversely or encourages any
adverse action against WellCare, except if testifying truthfully under oath
pursuant to any lawful court order or subpoena or otherwise responding to or
providing disclosures required by law.
11. Except as required by law, Employee specifically agrees that he will
not at any time, in any fashion, form, or manner, either directly or indirectly,
divulge, disclose, or communicate to any person, firm or corporation, in any
manner whatsoever any information of any kind, nature, or description concerning
any matters affecting or relating to the business of WellCare, including,
without limiting the generality of the foregoing, the names of any of its
customers, the prices it obtains or has obtained, or at which it sells or has
sold its products or services, or any other information of, about or concerning
the business of WellCare, its manner of operation, its plans, processes, or
other date of any kind nature, or description, without regard to whether any or
all of the foregoing matters would be deemed confidential, material, or
important, the parties hereby stipulating that as between them, the same are
important, material, and confidential, and gravely affect the successful conduct
of the business of WellCare and its goodwill, and that any breach of the terms
of this paragraph is a material breach of this Agreement. Employee further
confirms that he has delivered to WellCare any and all documents and other
tangible items containing information as described in this paragraph.
12. Upon service on the Employee, or anyone acting on his behalf, of any
subpoena, order, directive or other legal process requiring the Employee to
engage in conduct encompassed within paragraphs 7, 9, 10 or 11 of this
Agreement, the Employee or his attorney shall immediately notify Set I. Truwit,
Esq., Xxxxxxx, Xxxxxx & Green, P.C., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and the President/Chief Executive Officer of WellCare in writing within two
business day of such service.
13. Employee agrees that he will assist and cooperate with WellCare in
connection with the defense or prosecution of any claim that may be made against
or by WellCare, or in connection with any ongoing or future investigation or
dispute or claims of any kind involving WellCare, including any proceeding
before any arbitral, administrative, judicial, legislative, or other body or
agency, including testifying in any proceeding to the extent such claims,
investigations or proceedings relate to services performed or required to be
performed by Employee, pertinent knowledge possessed by Employee, or any act or
omission by Employee. Employee further agrees to perform all acts and execute
and delivery any documents that may be reasonably necessary to carry out the
provision of this paragraph. WellCare will reimburse any reasonable expenses
required to provide these services.
14. The failure of the Employee or WellCare to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
thereof, or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
15. The Employee acknowledges that he has been offered twenty-one (21) days
from the date he received this Agreement within which to consider its terms, and
that he has been advised that during such period he should consult an attorney
regarding the terms of this Agreement. The Employee further acknowledges that
his signature below indicates that he is entering into this Agreement freely,
knowingly and voluntarily with a full understanding of its terms. The terms of
this Agreement shall not become effective or enforceable until seven (7) days
following the date of the Employee's execution of this Agreement, during which
time the Employee may revoke this Agreement by notifying WellCare in writing, by
registered letter delivered to the attention of the undersigned representative
of WellCare. Any such revocation must be received by 5:00 p.m. on or before the
seventh day.
16. This Agreement constitutes the entire agreement between the Employee
and WellCare, and supersedes and cancels all prior oral and written agreement,
if any, between the Employee and WellCare. Employee affirms that, in entering
into this Agreement, Employee is not relying upon any oral or written promise or
statement made by anyone at any time on behalf of WellCare.
17. If any of the provisions, terms or clauses of this Agreement are
declared illegal, unenforceable or ineffective in a legal forum, those
provisions, terms and clauses shall be deemed severable, such that all other
provisions, terms and clauses of this Agreement shall remain valid and binding
upon both parties; provided, however, if the Employee's release of WellCare as
contained in paragraph 3 of this Agreement is declared by a court of competent
jurisdiction to be illegal, unenforceable or ineffective and the Employee
asserts against WellCare claims that the parties intended to be released under
Paragraph 3, the Employee shall return to WellCare all monies paid to and the
value of all benefits received by him under this Agreement within ten (10)
business days of any such determination.
18. The Employee agrees that in the event he breaches the terms of this
Agreement, WellCare may immediately cease all payments pursuant to this
Agreement, and WellCare shall be entitled to recover from the Employee all
amounts paid to the Employee pursuant to this Agreement as well as all costs and
reasonable attorneys' fees incurred as a result of WellCare's attempt to redress
such breach or to enforce WellCare's rights and protect WellCare's legitimate
interests. If the employer breaches the terms of this agreement, Employee shall
be entitled to recover from employer all payments remaining pursuant to this
agreement, as well as all costs and reasonable attorney's fees incurred as a
result of employer's attempt to redress such breach or to enforce Employee's
rights and protect Employee's legitimate interests.
19. The law of the State of New York will control any questions concerning
the validity and interpretation of this Agreement, without regard to principles
of conflicts of law. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in accordance with
the applicable rules then obtaining of the American Arbitration Association and
judgment on the award rendered may be entered in any court having jurisdiction
thereof. The prevailing party in any such proceeding shall be entitled to
reimbursement of its costs and expenses (including reasonable attorneys' fees)
in connection with such proceedings.
20. This Agreement has been reached by mutual and purely voluntary
agreement of the parties, and the parties, by their signatures indicate their
full agreement with, and understanding of, its terms. Employee acknowledges that
Employee has been given a reasonable period of time to consider the Agreement,
and that this Agreement has binding legal effect.
21. This agreement shall be null and void in the event the contemplated
transaction between Xxxxx X. Xxxxx, M.D. and WellCare does not close.
22. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, assigns, heirs, executors and legal
representatives.
23. This Agreement may not be changed or altered, except by a writing
signed by the Employee and an authorized officer of WellCare.
"Employee"
/s/ Xxxx X. Xxx, M.D.
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Xxxx X. Xxx, M.D.
STATE OF WASHINGTON DC )
)ss.:
COUNTY OF DISTRICT OF COLUMBIA )
On the 2nd day of May, 1999, before me personally came Xxxx X. Xxx,
M.D., to me known to be the individual described in the foregoing instrument,
who executed the foregoing instrument in my presence, and who duly acknowledged
to me that he executed the same.
/s/ Xxxxx X. Xxxxxxx
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Notary Public
XXXXX X. XXXXXXX
NOTARY PUBLIC DISTRICT OF COLUMBIA
My Commission Expires November 14, 2001
WELLCARE MANAGEMENT GROUP, INC.
"WellCare"
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President/CEO
STATE OF NEW YORK )
)ss.:
COUNTY OF ULSTER )
On this 30th day of June, 1999, before me personally came President/CEO, to
me known, who being by me duly sworn, did depose and say that he is
President/CEO. The WellCare Management Group, Inc., the corporation described in
and which executed the foregoing instrument; that he is duly authorized to
execute said instrument on behalf of said corporation, and that he executed said
instrument pursuant to that authority.
/s/ Xxxxx Xxxx
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Notary Public
XXXXX XXXX
Notary Public, State of New York
No. 01W06000070
Qualified in Westchester County
Commission Expires December 8, 1999
