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SEPARATION AGREEMENT
AND
GENERAL RELEASE
This Separation Agreement and General Release (the
“Agreement”) is executed on the dates given on the
signature pages by and between American CareSource Holdings, Inc.
(“ACSHI” or the “Company”) and Wayne
Schellhammer (“Executive,” “you” or
“I”).
RECITALS
WHEREAS , ACSHI and
Executive entered into an Employment Agreement dated October 11,
2004 (“Employment Agreement”); and
WHEREAS , effective
June 30, 2007, Executive shall resign as an officer, director, and
employee of ACSHI and all of its affiliates; and
WHEREAS, the parties
agree that Executive’s separation from employment is the
result of a mutual agreement between Executive and ACSHI;
and
WHEREAS , Executive
agrees to provide ACSHI with a general release of claims as
contained herein.
NOW, THEREFORE , in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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I.
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Separation of Employment
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A.
Except as otherwise provided herein, ACSHI and
Executive hereby agree that Executive’s employment shall be
separated as of June 30, 2007 (“Separation Date”) and
that neither shall thereafter have any liabilities, rights, duties
or obligations to the other party under or in connection with
Executive’s employment with the Company, except as provided
in this Agreement.
B.
ACSHI and Executive hereby waive any rights to prior
notification of termination of Executive’s
employment.
C.
Executive hereby resigns, effective on the
Separation Date, as a director, officer and employee of ACSHI, and
as an officer, manager, employee or similar functionary of all
entities related to ACSHI.
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EXECUTIVE'S INITIALS _______________
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HOUSTON: 100017.00001: 1186879v3
D.
Executive represents, acknowledges and agrees that
Exhibit A includes a complete and correct list of all equity or
option agreements and awards under which Executive claims a right
to vested equity or option benefits in ACSHI or any of its
affiliates and to which he is not waiving his vested rights
pursuant to this Agreement (the “Stock Options”).
Executive acknowledges and agrees that, except as provided in
Section II.C below, any and all rights he possesses pursuant to the
instruments listed on Exhibit A that remain unvested as of the
Separation Date shall in each case lapse and be forfeited as of the
Separation Date. Executive and ACSHI agree that Executive holds
539,007 vested stock options and no shares of restricted stock.
These and all other terms of Executive’s stock and stock
options shall be governed by the terms and conditions of the
applicable stock and option agreements and plan, as modified by
Section II.C below.
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II.
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Special Compensation, Benefits and
Consideration
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In consideration for Executive’s release of
claims, as well as his other promises contained herein, ACSHI
agrees to provide Executive with the following benefits:
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A.
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ACSHI agrees to pay to Executive the gross amount of
$250,000.00, payable in twelve (12) equal installments of
$20,833.33 (“Installment Severance Payments”). All
payments made pursuant to this Paragraph shall be subject to taxes
and lawful deductions and shall be made in accordance with the
Company’s normal payroll practices. ACSHI and Executive agree
that amounts payable during the six month period following the
Separation Date shall be classified as “short term
deferrals” for purposes of Treasury Regulation Section
1.409A-1(b)(4). The first Installment Severance Payment shall be
made on the first regular payday after the Effective Date of this
Agreement (as defined below in Section IV(O); and
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B.
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ACSHI agrees to continue Executive’s health
and dental insurance coverage at its expense for a period ending on
the earlier of (i) June 30, 2008 or (ii) the date on which
Executive obtains health insurance from a subsequent employer (each
the “Benefit Termination Date”). This coverage shall be
provided by Executive enrolling in COBRA under ACSHI’s group
health plan. ASCHI shall reimburse Executive for the amount by
which the COBRA premium payments exceed the premium rates offered
by the Company to active employees at the then effective rates
during the coverage period; provided, however, that ASCHI may, with
the consent of the insurance company, elect to pay such amount
directly to the insurance company. ACSHI and Executive agree that
these payments shall be classified as a reimbursement of medical
expenses for purposes of Treasury Regulation Section
1.409A-1(b)(9)(v)(B). Executive further agrees that
he will be required to timely complete and submit the
necessary paperwork to obtain such continuation benefits.
Executive understands and agrees that as of the Benefit
Termination
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EXECUTIVE'S INITIALS _______________
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HOUSTON: 100017.00001: 1186879v3
Date, any continuation of dental and health
insurance benefits will be at Executive's own expense.
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C.
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ACSHI and Executive agree that (i) any portion of
the Stock Options that were not vested on or before the Separation
Date shall be forfeited on the Separation Date, and (ii) the
expiration date for the vested portion of Executive’s Stock
Options shall, as permitted by the Treasury Regulation Section
1.409A-1(b)(5)(v), be extended from ninety days following the
Separation Date until June 30, 2008 (“Option Exercise
Period). ACSHI and Executive hereby agree that this portion of the
Agreement constitutes an amendment to each applicable stock option
agreement. As required in Sections 8(d) and 8(g) of the
Company’s 2005 Amended and Restated Stock Option Plan,
Executive shall be required to deliver to the Company the
applicable exercise price, any amounts required to be withheld for
State and/or Federal income taxes, and the Executive’s share
of any applicable employment taxes which arise from the exercise of
the Stock Options. Executive further acknowledges that the
extension of the Stock Options will cause such options to be
classified as nonqualified stock options under Section 83 of the
Internal Revenue Code.
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In connection with and as a portion of the
consideration for this extension, Executive agrees that he will
limit the number of shares of the Company’s common stock with
respect to which he effects any sale, transfer, pledge or other
transaction that affects his beneficial or economic interest
therein to no more than 140,000 shares for each rolling three-month
during the Option Exercise Period; provided, however, that the
delivery by the Company of shares of common stock to Executive upon
the exercise of the Stock Options for cash shall not reduce this
amount). In addition, Executive shall given notice to the Company
not less than one business day prior to the date he makes any sale,
transfer, pledge or other transaction that affects his beneficial
or economic interest therein. This notice may, at Executive’s
election, cover any proposed sales that will occur during the
following five (5) business days.
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D.
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The Company shall pay Executive $5,000 for
relocation expenses (“Relocation Payment”). The Company
shall pay the Relocation Payment on the first
regular payday after the Effective Date of this Agreement (as
defined below in Section IV(O) .
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Executive understands and agrees that the
compensation recited in this Section II constitutes the full
compensation from ACSHI to Executive, and no other payments are due
to Executive. The parties agree that Sections 5 (Termination), 5.1
(Termination Events) and 5.2(a) and (b) (Effects of Termination) of
the Employment Agreement shall not apply to Executive’s
separation and shall have no effect and be unenforceable as of the
Effective Date of this Agreement.
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EXECUTIVE'S INITIALS _______________
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HOUSTON: 100017.00001: 1186879v3
A.
In return for the consideration referenced in this
Agreement, I, Wayne Schellhammer, agree to the
following:
I agree, on behalf of myself and all of my heirs or
personal representatives, to release ACSHI, its parent companies
(including without limitation Patient Infosystems, Inc.),
subsidiaries, all affiliates of each, predecessors and successors,
and all of its present or former officers, managers, directors,
managers, representatives, employees, agents, attorneys, employee
benefit programs, and the trustees, administrators, fiduciaries and
insurers of such programs (collectively the “Company Released
Parties”), from any and all claims for relief of any kind,
whether known to me or unknown, which in any way arise out of or
relate to my employment at ACSHI or any of the Company Released
Parties, the separation of my employment at ACSHI or any of the
Company Released Parties, any agreements between ACSHI or any of
the Company Released Parties and me, including but not limited to
the Employment Agreement, and concerning any set of facts or events
occurring at any time up to the Effective Date of this Agreement,
including, but not limited to, any and all claims of discrimination
of any kind, and any contractual, tort or other common law claims.
This settlement and waiver includes all such claims, whether for
breach of contract, quasi-contract, implied contract, quantum
meruit, unjust enrichment, compensation, deferred compensation,
equity interest, any tort claims, any and all claims under any
applicable federal laws, including, but not limited to, the Age
Discrimination in Employment Act, as amended, Title VII of the
Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991,
42 U.S.C. § 1981, the Americans with Disabilities Act, as
amended, the Equal Pay Act, as amended, the Worker Adjustment and
Retraining Notification Act, the Employee Retirement Income
Security Act of 1974, as amended, the Family and Medical Leave Act,
as amended, the Fair Labor Standards Act, as amended, the
Sarbanes-Oxley Act, or under any applicable state or local laws or
ordinances or any other legal restrictions on ACSHI’s rights,
including the Texas Commission on Human Rights Act.
B.
I further agree not to file a suit of any kind
against ACSHI or any of the Company Released Parties relating to my
employment at ACSHI or any of the Company Released Parties, the
separation thereof, any agreements between ACSHI or any of the
Company Released Parties and me, including but not limited to the
Employment Agreement, any set of facts or events occurring up to
the Effective Date of this Agreement, or to participate voluntarily
in any employm
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