EXHIBIT 10.29
DEPARTURE AGREEMENT AND GENERAL RELEASE
(PLEASE READ CAREFULLY. THIS DEPARTURE AGREEMENT AND GENERAL
RELEASE HAS IMPORTANT LEGAL CONSEQUENCES.)
This Departure Agreement and General
Release (this “ Agreement ”) is between
National Medical Health Card Systems, Inc. (“
Company ”) and James F. Smith (“
Employee ”) and is a complete, final and
binding settlement of all claims and potential claims, if any, with
respect to their employment relationship. Employee and the Company
may sometimes be referred to collectively as the “
Parties .”
WHEREAS, the Company and Employee are
parties to an Employment Agreement dated on or about
August 30, 2004 (the “ Employment
Agreement ”); and
WHEREAS, the Company and Employee
have agreed on certain terms and conditions regarding the
termination of employment under the Employment Agreement,
NOW,
THEREFORE, in consideration of the mutual promises and covenants
set forth herein, be it agreed as follows:
1. As of May 21, 2007 (the
“ Termination Date ”), Employee’s
employment relationship with the Company and under the Employment
Agreement terminated and Employee ceased to be an officer or
manager with the Company (including any and all subsidiaries or
affiliated entities). Effective immediately upon his execution of
this Agreement, Employee resigns as a member of the Board of
Directors of the Company (the “ Board
”).
2. In consideration for the
covenants and promises set forth herein, following the execution of
the Agreement by Employee ( the “ Execution
Date ”):
(a) Company will pay Employee’s
present salary for a period not to exceed two years from the
Termination Date (such period to be referred to as the “
Severance Period ”), but only so long as
Employee has not breached and does not breach the provisions of
paragraphs 6 through 11 of the Employment Agreement, for a total
sum not to exceed $750,000, plus a payment in the amount of $600.00
per month in respect of Employee’s former car payment (the
“ Total Severance Amount ”), payable as
follows: (i) Employee shall receive an amount, in one lump sum
payment within fourteen (14) days after the Execution Date,
equal to the portion of the Total Severance Amount that would have
accrued during the period commencing on the Termination Date and
ending on the Execution Date had the Company been obligated to pay
Employee severance payments from and after the Termination Date;
and (ii) the remaining portion of the Total Severance Amount
shall be paid in accordance with the Company’s general
payroll practices in bi-weekly payments of $14,423.08 each (plus
the $600.00 per month payment described above) following the
Execution Date, in each case less applicable federal, state, and
local legally required deductions and less any deductions
authorized by Employee to pay his portion to continue group health
coverage (such lump sum and
1
installment
payments to become payable only when Employee has executed, and has
not revoked, this Agreement as provided herein).
(b) Employee received all accrued
salary through the Termination Date in accordance with the
Company’s general payroll practices, less applicable federal,
state, and local legally required deductions.
(c) For the period for which Employee
is eligible to continue benefits under the Consolidated Omnibus
Budget Reconciliation Act (“ COBRA ”),
Company will pay the Company’s portion of the premiums for
Employee’s medical, dental, and prescription coverage from
the Termination Date through the end of such period of eligibility
but not to exceed the end of the Severance Period, subject to
Employee’s strict compliance with paragraphs 6 through 11 of
the Employment Agreement and the terms and provisions of this
Agreement.
(d) In addition, and in lieu of any
remaining benefits for health, dental, and pharmaceutical coverage
for the remainder of the Severance Period for which COBRA is not
available, the Company will pay Employee a one-time payment of
$19,750, within fourteen (14) days of the execution of this
Agreement.
(e) Employee received all
reimbursable expenses pursuant to the Company’s Travel &
Entertainment policy incurred through the Termination Date and
submitted within thirty (30) days after the Termination Date.
(f) Employee received all accrued
vacation pay to which Employee is entitled through and including
the Termination Date, which amount is $11,893.63.
(g) The Company will reimburse
Employee for attorney’s fees reasonably incurred in the
review and execution of this Agreement, not to exceed $5,000. Such
request for reimbursement must be submitted no later than thirty
(30) days after the execution of this Agreement and will be
paid within thirty (30) days after Employee presents a summary
invoice for such services.
(h) Employee acknowledges and agrees
that he is not entitled to any additional wages, bonus payments,
benefits or other compensation from the Company except as set forth
herein.
3. For purposes of the National
Medical Health Card Systems, Inc. 1999 Stock Option Plan, as
amended (the “Stock Option Plan” ), and
the National Medical Health Card Systems, Inc. Amended and Restated
2000 Restricted Stock Grant Plan (the “Restricted Stock
Plan” ), the termination of Employee’s
employment will be considered as an involuntary termination without
cause. Accordingly, under the terms of the Stock Option Plan,
Employee will have 90 days following the Termination Date to
exercise any of his vested options. The Parties acknowledge
that, on the Termination Date, Employee will forfeit and have no
further right, title or interest in or with respect to, any and all
non-vested options, shares of restricted stock and
restricted stock unit awards held by Employee under the Stock
Option Plan and/or the Company’s Restricted Stock Plan.
Employee affirms the provision of any Restricted Stock
2
Agreement that the Company shall have the right to instruct the
Company’s transfer agent to transfer any unvested restricted
stock to the Company.
4. Release Provisions.
(a) As a material inducement to the
Employee to enter this Agreement, and in consideration for the
Company’s payments to Employee as set forth in this
Agreement, and for other good and valuable consideration, as and
for Employee’s complete release of all statutory, contract,
tort and all other claims against the Company and each of its
current and former owners (including, without limitation, New
Mountain Capital, L.L.C., New Mountain Partners, L.P., New Mountain
Affiliated Investors, L.P., and their respective affiliates),
predecessors, assigns, employees, representatives, attorneys,
benefit plans, insurers, parent companies, divisions, subsidiaries,
affiliates, directors, managers, partners, members, and officers,
including any and all persons acting by, through, or under or in
concert with any of them (collectively “
Releasees ”), Employee hereby releases and
forever discharges the Releasees from any all actions, causes of
action, suits, dues, sums of money, reckonings, covenants,
contracts, bonuses, controversies, agreements, claims, promises,
charges, obligations, complaints and demands whatsoever in law or
equity, which Employee (and Employee’s heirs, executors,
administrators, successors and/or assigns) may now have or
hereafter can, shall, may, or may have had for, upon, or by reason
of any matter, cause or actual or alleged act, omission,
transaction, practice, conduct, occurrence, or other matter up to
and including the execution of this Agreement by the Employee,
including without limitation, any claim arising out of or relating
to the Employee’s employment by the Company or service on the
Board or any similar governing body of the Company and each of its
subsidiaries and affiliated entities, any and all obligations and
liabilities of the Company under the Employment Agreement or any
other agreement between the Employee and any of the Releasees, and
the ownership, acquisition, offer or sale of, or rights to any
equity interest, or any option to purchase or acquire any equity
interest in the Company, excepting only the rights and obligations
(i) created by this Agreement; (ii) that may exist under
any defense or indemnification agreement or the Company’s
Certificate of Incorporation and Bylaws, as amended, to indemnify
Employee; (iii) created by contracts of liability insurance;
(iv) Employee’s rights under state worker’s
compensation laws (for occupational illness or injury only);
(v) Employee’s vested rights under the Company’s
health, dental, pharmacy and 401(k) benefit plans; and
(vi) any rights, whenever arising, Employee may have in his
capacity as a shareholder of the Company and not arising from his
capacity as officer, director, employee or agent of the Company;
provided , however , that Employee shall neither
(A) initiate any claim based in whole or in part upon
Employee’s status as a shareholder of the Company nor
(B) directly or indirectly counsel or encourage another person
or entity to initiate, or voluntarily provide assistance in respect
of, any claims based in whole or in part upon any person’s or
entity’s status as a shareholder of the Company;
provided , further , that nothing herein is intended
to nor shall it preclude Employee from providing truthful testimony
if under legal compulsion as a witness regarding any such
claim.
(b) Without limiting the generality
of the foregoing, this Agreement is intended to and shall release
Releasees from any and all claims, whether known or
3
unknown, which
Employee ever had, has, or may have against any Releasee with
respect to Employee’s employment, the terms, benefits, and
conditions of that employment, and/or the termination thereof,
including without limitation those arising under the Civil Rights
Act of 1866, 42 U.S.C.A. Section 1981, the Civil Rights Act of
1964, as amended, 42 U.S.C.A. Section 2000e, et seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C.A.
Section 621 et seq., the National Labor Relations Act, 29
U.S.C.A. Section 151 et seq., the Fair Labor Standards Act, 29
U.S.C.A. Section 201 et seq., the Labor Management Reporting
and Disclosure Act of 1959, as amended, 29 U.S.C.A.
Section 401 et seq., the Americans with Disabilities Act, 42
U.S.C.A. Section 12101, et.
|
