Exhibit 10.12
STAY IN PLACE / SEPARATION AGREEMENT
This STAY IN PLACE/ SEPARATION AGREEMENT is made this 31 Day of October
2000 by and between Health Management Systems, Inc. (hereinafter the "Employer"
or "HMS"), and Xxxxxxx Xxxxx ("Employee"), Xxx Xxxx Xx., Xxx. 0000, Xxx Xxxx, XX
00000.
WHEREAS Employer has determined that it will explore restructuring
alternatives for the unit of Employer's business (the "Unit") to which the
Employee's services currently are being rendered; and
WHEREAS, Employer desires to retain the services of the Employee through
the restructuring period to insure continuity of leadership.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1. STAY IN PLACE: PROVIDED Employee continues to render services to,
and to be employed by, the Unit, Employee will receive a
"stay-in-place-bonus" (hereinafter "Bonus") equivalent to six months
base compensation of $85,000.00 (Eighty Five Thousand Dollars) under
the following circumstances:
A. DIVESTITURE: Coincident with the closing of the sale or other
transfer of the Unit (including a sale or other transfer of
the substantially all of the assets thereof) to an entity (the
"Successor Company") other than a subsidiary of the Employer.
The Bonus will be paid to Employee in a lump sum within thirty
days after the date of such closing.
B. CONTINUATION OF OPERATION: When the Chief Executive Officer of
Employer notifies the head of the Unit in writing (a
"Continuation Notification") that the Unit shall continue as
part of HMS. Employer shall cause a copy of the Continuation
Notice to be provided to Employee simultaneously with its
delivery to the head of the Unit. The Bonus will be paid to
Employee in a lump sum within thirty business days after
delivery of the Continuation Notice.
C. SHUT DOWN: At the conclusion of an orderly shut down of the
Unit. Employer shall notify Employee in writing of its
intention to shut down the Unit and shall specify in such
notice the intended last day of operation of the Unit (the
"Shut Down Date"). The Bonus will be paid to Employee in a
lump sum within thirty business days after Shut down Date.
D. DATE: If none of the above occurs, by 31 December 2001, the
Bonus will be paid to employee in a lump sum by no later than
Friday, January 5, 2002.
2. Employer recognizes that the Employee, by agreeing to continue to render
services to Employer and the Unit during the transition period, may be
giving up an opportunity to seek alternative employment. In order to
provide salary continuance in the event Employee's employment is not
continued, Employee will receive severance payments ("Severance"), as
described herein and under the following circumstances:
A. The Successor Company does not offer employment to Employee.
Employee will receive six months Severance commencing on the
date (the "Termination Date") of termination of Employee's
employment with HMS. Severance Payments will be made over a
six-month period in accordance with Employee's current payroll
cycle.
B. The Successor Company tenders an offer to Employee containing
a base pay component less than 85% of the Employee's current
base pay. If Employee decides not to accept the Successor
Company's offer, Employee shall so notify in writing his
immediate supervisor. If Employer thereafter terminates
Employee, Employee will receive six months Severance
commencing the Termination Date. Severance payment will be
made over a six-month period in accordance with the Employee's
current payroll cycle.
C. The Successor Company tenders an offer of employment in a
different location (more than 50 miles from the Employee's
current HMS office.) If Employee decides not to accept the
Successor Company's offer, Employee shall so notify in writing
his immediate supervisor. If Employer thereafter terminates
Employee, Employee will receive three
months Severance commencing the Termination Date. Severance
payments will be made over a three-month period in accordance
with the employee's normal payroll cycle.
D. If HMS terminates Employee during Calendar Year 2001 without
cause, Employee will receive six months Severance commencing
the Termination Date. Severance payments will be made over a
six-month period on the employee's normal payroll cycle. For
purposes of this Agreement, "Cause" for termination shall mean
(1) conviction (including a plea of guilty or nolo contendere)
of a crime involving theft, fraud, dishonesty or moral
turpitude, (2) willful gross violation of Employer's written
policies or procedures, or (3) failure to carry out the duties
of Employee's position.
E. Notwithstanding the foregoing, Employee shall not be entitled
to any Severance hereunder in the event of a " Management
Buyout" of the Unit where the Employee is retained to help
manage the Successor Company.
F. During the Severance pay period Employee will continue to
participate in the Employer provided health insurance plan and
will continue to pay a portion of the premium for health.
Participation in the Employer provided STD, LTD, Life
Insurance and 401(k) plans will cease as of the Termination
Date.
G. Employee's rights to any Severance hereunder will be
conditioned upon Employee's agreeing, effective as of the
Termination Date, to a standard Separation Agreement with HMS;
a blank copy of the Separation Agreement and Release is
appended for Employee's convenience.
H. Employee agrees not to disclose or make reference to the terms
of this Agreement without prior written consent of HMS, except
as required by law, or to his attorney and his immediate
family.
I. Employee agrees to adhere to the terms and condition of the
HMS Not To Compete Agreement. If Employee has not signed a HMS
Not To Compete Agreement, HMS will require the Employee to
enter into a Not To Compete Agreement to be eligible for the
severance payments described herein.
3. Employee acknowledges that (i) he has had a minimum of 14 days from the
date of receipt to review this Agreement; (ii) HMS has recommended that he
discuss this Agreement with his legal and other advisors to ensure full
and thorough knowledge of the legal significance of this Agreement and;
(iii) that he is executing this Agreement voluntarily after having
undertaken the aforementioned review. This Agreement shall be construed
under the laws of the state of New York and shall in all respects be
interpreted, enforced, and governed under the law of said state.
4. This Agreement is binding on the parties and their respective successors
and assigns.
5. This Agreement contains, and is intended as, a complete statement of all
of the terms of the arrangements among the parties with respect to the
matters provided for herein, and supersedes any previous agreements and
understandings among the parties with respect to those matters.
6. No provision of this Agreement may be amended or modified except by an
instrument or instruments in writing signed by the parties hereto.
ACCEPTED AND AGREED TO: HEALTH MANAGEMENT
SYSTEMS INC.
_____________________________ By: ______________________________
Xxxxxxx Xxxxx Xxxxx X. Xxxxxxxx
Vice President Human Resources
_____________________________ ______________________________
Date Date
