CONFIDENTIAL SEPARATION
AGREEMENT AND GENERAL RELEASE
This
Confidential Separation Agreement and General Release (“
Agreement ”) is entered into by and between Gordon S.
Glenn, an individual (“ Executive ”), and SXC
Health Solutions Corporation and its subsidiary, SXC Health
Solutions, Inc. (collectively, the “ Company ”)
effective June 30, 2008 (“Agreement Effective
Date”):
1.
Termination of Employment . Executive shall resign from
Executive’s position as Chief Executive Officer of the
Company effective June 30, 2008. From the period beginning on
June 30, 2008 and ending on December 31, 2008, Executive shall
remain an employee of the Company, serving in the position of
Specialist, Marketing and Investor Relations. Executive
acknowledges that Executive’s employment with the Company
will terminate effective December 31, 2008 (“Termination
Effective Date”). Executive’s termination of employment
shall be considered a Termination by the Company Without Cause,
pursuant to Section 5.2 (c) of Executive’s
Employment Agreement dated January 1, 2008
(“Executive’s Employment Agreement”).
1.1.
Continued Chairmanship . Executive will remain the Chairman
of the Board of Directors of Company until December 31, 2008
at which time he shall voluntarily resign from that
position.
1.2.
Confidential Supplemental Release . Upon the Termination
Effective Date, but not before, Executive shall sign a Confidential
Supplemental Release Agreement substantially in the form attached
hereto as Exhibit A.
2.
Compensation . Notwithstanding anything in Executive’s
Employment Agreement dated January 1, 2008 to the
contrary:
(a) Executive’s
right to receive an annual base salary in the amount of Three
Hundred Twenty-Five Thousand and 00/100 Dollars ($325,000.00) shall
end on June 30, 2008.
(b) Executive’s
right to earn any further pro rata share of Executive’s
Incentive Compensation Bonus shall end on June30, 2008.
(c) Executive’s
right to earn a vehicle allowance in the amount of Five Hundred and
00/100 Dollars ($500.00) per month shall end on June30,
2008.
(d) Executive
shall receive a salary of $2,000.00 per month (or a pro rata share
thereof for periods less than one month), payable in accordance
with the Company’s payroll cycle, in consideration for
Executive’s services to Company as a Specialist, Marketing
and Investor Relations. In addition, Executive will continue to
receive benefits as a full-time employee including, but not limited
to, company paid life insurance of $1,000,000.00, until the
Termination Effective Date.
Executive and the company
acknowledge that Executive will receive a lump-sum payment equal to
any final compensation owed on the Company’s next regular
payday following the Termination Effective Date.
3.
Separation Benefits : Subject to the provisions of this
Agreement, and contingent upon Executive’s signing of a
Confidential Supplemental Release Agreement as referenced in
Section 1.2 of this Agreement, the Company will pay Executive the
benefits set forth in Article V, Subsection 5.2(c)
(ii) and (iii) of Executive’s Employment Agreement
(“ Separation Benefit ”), as follows:
(a) A
lump-sum payment of $300,000.00, less required tax withholding,
within thirty (30) days after the Agreement Effective Date.
This payment represents Executive’s anticipated Incentive
Compensation Bonus for 2008, pro rated to the Agreement Effective
Date, and is calculated using the average of the previous
2 years in which the Executive earned Incentive Compensation
Bonuses and represents approximately one-half of approximately 200%
of Executive’s Annual Base Compensation;
(b) A
lump-sum payment of $28,756.25, less required tax withholding,
within thirty (30) days after the Agreement Effective Date.
This payment represents Executive’s accrued but unused Paid
Time Off as of June 30, 2008, and is calculated as 184.04
hours times $156.25 per hour;
(c) A
lump-sum payment of $650,000.00, less required tax withholding,
within thirty (30) days after the Termination Effective Date.
This payment is the equivalent of two (2) times
Executive’s Annual Base Compensation;
(d) A
lump-sum payment of $300,000.00, less required tax withholding,
within thirty (30) days after the Termination Effective Date.
This payment is the equivalent of one (1) times the average
incentive compensation payments to Executive over the previous two
years; and
(e) Payment
of health insurance premiums for a health insurance policy for the
benefit of Executive, his spouse and his dependents, with
substantially the same benefits as for other full-time executives
of the Company. The Company shall provide this benefit until
Executive is eligible for Medicare benefits. This benefit shall
initially be satisfied through the Company’s payment of the
COBRA insurance continuation benefits available to Executive, his
spouse and his dependents; provided, however, that Executive makes
a timely COBRA election after receiving proper notification from
the Company.
The Separation Benefit
does not constitute nor is it intended to be any form of
compensation to Executive for any services to the
Company.
3.1. Stock Options
: Notwithstanding anything else herein or in any other agreement
entered into between Executive and the Company to the
contrary:
(a) All
options for shares of the Company stock granted to Executive on
May 16, 2007, whether held by Executive or unvested as of the
Agreement Effective Date, shall expire on the Agreement Effective
Date;
(b) All
options for shares of the Company stock granted to Executive on
March 8, 2006 which remain unvested as of the Agreement
Effective Date shall vest on December 31, 2008, and all
options for shares of the Company stock granted to Executive on
March 8, 2006 shall expire if not exercised within ninety
(90) days after December 31, 2008;
(c) All
options for shares of the Company stock granted to Executive on
March 10, 2008 which remain unvested as of the Agreement
Effective Date shall vest on December 31, 2008, and all
options for shares of the Company stock granted to Executive on
March 10, 2008 shall expire if not exercised within ninety
(90) days after December 31, 2008
(d) All
options for shares of the Company stock granted to Executive on any
dates other than those listed in Section 3.1 (a), (b) or
(c) above shall continue to be subject to all of the terms and
conditions of the agreements under which those options were
granted.
This
Section 3.1 supersedes and replaces Sections 3.7 and
5.2(g) of Executive’s Employment Agreement dated
January 1, 2008 and such Sections 3.7 and 5.2(g) shall be
of no further force or effect.
4.
Consideration . Executive acknowledges that Executive would
not be entitled to the Separation Benefit provided for in paragraph
3 above in the absence of Executive’s signing of this
Agreement, that the Separation Benefit constitutes a substantial
economic benefit to Executive, and that it constitutes good and
valuable consideration for the various commitments undertaken by
Executive in this Agreement.
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5.
Parties Released . For purposes of this Agreement, the term
“ Releasees ” means the Company, its past and
present parents, subsidiaries, divisions, and affiliated companies;
their respective predecessors, successors, assigns, benefit plans,
and plan administrators; and their respective past and present
shareholders, directors, trustees, officers, employees, agents,
attorneys and insurers.
6.
General Release . Executive, for and on behalf of Executive
and each of Executive’s personal and legal representatives,
heirs, devisees, executors, successors and assigns, hereby
acknowledges full and complete satisfaction of, and fully and
forever waives, releases, acquits, and discharges Releasees from
any and all claims, causes of action, demands, liabilities,
damages, obligations, and debts (collectively referred to as
“ Claims ”), of every kind and nature, whether
known or unknown, suspected or unsuspected, or fixed or contingent,
which Executive holds as of the date Executive signs this
Agreement, or at any time previously held against the Releasees, or
any of them, arising out of any matter whatsoever (with the
exception of breaches of this Agreement). This General Release
specifically includes, but is not limited to, any and all
Claims:
(a)
Arising out of or in any way related to Executive’s
employment with the Company, the termination of his
employment;
(b)
Arising out of or in any way related to any contract or agreement
between Executive and the Company;
(c)
Arising under or based on the Equal Pay Act of 1963; Title VII of
the Civil Rights Act of 1964, as amended; Section 1981 of the
Civil Rights Act of 1866; the Americans With Disabilities Act of
1990; the Family and Medical Leave Act of 1993; the Fair Labor
Standards Act of 1938; the National Labor Relations Act; the Worker
Adjustment and Retraining Notification Act of 1988; Executive
Retirement Income Security Act of 1974 (ERISA) (excepting claims
for vested benefits, if any, to which Executive is legally entitled
thereunder); the Illinois Constitution; the Illinois Wage Payment
and Collection Law; the Illinois Minimum Wage Law; the Illinois
Human Relations Act; and the Illinois Whistleblower Act;
(d)
Arising under or based on the Age Discrimination in
Employm
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