Exhibit 10.1
SEPARATION AGREEMENT
This Separation
Agreement (the "Agreement") is made effective as of the
31st day of December, 2007 (the "Effective Date") between HC
Innovations, Inc.,
a Delaware corporation (the "Company"), and Jeffrey L. Zwicker
("Zwicker").
RECITALS
A. Zwicker
has been Chief Financial Officer of the Company from May
2005 until the Effective Date.
B. Zwicker is
retiring from the
Company and thereby ending his
employment
relationship with the Company and is concurrently resigning as
Chief
Financial Officer of the Company and from all officer and other
positions he has
with the Company and its affiliates.
C. In
recognition of the
substantial
past services of
Zwicker to
the Company
and Zwicker's willingness to provide the Company with the
non-competition and
related covenants
provided herein,
the parties desire
to
amicably conclude
Zwicker's employment with the Company and
its affiliates on
the terms set forth in this Agreement.
In consideration of the mutual promises contained in this
Agreement, and
for other good and valuable consideration, the receipt and
sufficiency of which
are acknowledged, the undersigned parties, intending to be legally
bound, agree
as follows:
AGREEMENTS
1.
RETIREMENT;
RESIGNATION FROM OFFICER POSITIONS. Zwicker hereby
resigns as Chief Financial Officer of the Company and from all
officer and other
positions he has with
the Company and its
affiliates,
in each case as of
the
Effective Date.
Any employment relationship he has with the Company and
its
affiliates is also concluded as of the Effective Date.
2. SEVERANCE
PAYMENTS. Subject to
Zwicker's continuing
compliance
with all the terms of this Agreement, the Company shall pay Zwicker
an aggregate
of $100,000, representing six (6) months of Zwicker's current
salary of $200,000
(the "Severance").
The Severance shall be payable in twenty-six (26) equal
semi-monthly
installments in
accordance with the Company's customary payroll
practices and shall be reduced by all appropriate tax withholdings and other
customary payroll deductions.
3. MEDICAL
INSURANCE.
For a period of twelve
(12) months from the
Effective Date,
the Company
shall either continue to provide Zwicker with
coverage under
the Company's current medical and dental insurance plans
(collectively,
"Medical Insurance")
or, in the event Zwicker shall not be
eligible for such coverage, pay the cost of COBRA coverage for Zwicker, which
coverage shall be substantially equivalent to the Medical
Insurance, for twelve
(12) months. Zwicker
is responsible for complying with all terms and conditions
of any such insurance
plan except for timely
payments of the
premium, which
shall be the sole responsibility of the Company.
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4. CONDITIONS
TO SEVERANCE AND MEDICAL INSURANCE.
(a)
The Severance
payment provided in Section 2, the Medical
Insurance or COBRA payments provided in Section 3 shall continue
only until such
time as Zwicker shall
perform any
services for a "Competing Business" (as
defined in Section 5), without having received the prior written consent
of the
President of the Company. The rendering of consulting or
other services to
any
Competing Business, without first having obtained prior written
consent for such
activity from the
President of the Company, shall entitle the Company to
terminate all remaining Severance payments, Medical Insurance or COBRA
benefit
payments.
(b)
The severance obligations of the Company set forth in Sections
2
and 3 herein shall constitute the total payment and severance
obligations under
this Agreement.
Zwicker understands and warrants that no monetary or other
benefit other
than as set
forth in Sections 2 and 3 is or shall be due or
claimed to be due from the Company.
5.
RESTRICTIVE COVENANTS.
(a)
Zwicker hereby
covenants and agrees with the Company that,
in
consideration for the
payments and other valuable consideration to be provided
to Zwicker under this
Agreement,
for a period
(the "Restricted Period") of
thirty-six (36) months from the Effective Date, Zwicker shall not, without the
prior written consent
of the President of the Company (which consent shall not
be unreasonably withheld), either directly or indirectly, on
his own account or
as an executive,
consultant, agent, partner, joint venturer, owner, director or
shareholder of
any other person, firm, corporation, partnership, limited
liability company or other entity:
(i)
Perform services
for any Competing Business, as
hereinafter defined,
that are substantially similar in whole or in part
to those that he performed for the Company, including specifically,
but
not limited to,
participating in the financing or executive management
of a business providing specialty disease and care management
focused on
caring for
small populations of medically unstable and frail
individuals. For
purposes of this Agreement, the term "Competing
Business" shall mean
any entity engaged
in the research, financing,
development, marketing
or sale of products
or services which are or
would be competitive
with those products and services being marketed by
the Company at the Effective Date. This covenant shall apply only
within
the "Territory"
that is defined as the fifty states of the United
States. Zwicker
recognizes
and agrees
that in his
capacity as Chief
Financial Officer of
the Company, his
duties extended
throughout the
entire service area of the Company, which includes, at a minimum, the
fifty states of the
United States and
that, because of the
executive
nature of Zwicker's
position with the
Company, in order to
afford the
Company protection
from unfair
competition
by Zwicker
following his
resignation, this
covenant must extend throughout the stated Territory.
Zwicker further
acknowledges
that this covenant
does not prohibit him
from engaging in his
entire trade or business, but only a very limited
segment of the specialty disease care management industry. This
covenant
also shall not
prohibit Zwicker
from owning up to five
(5) percent of
the common
stock of any publicly traded specialty disease care
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<PAGE>
management company for investment purposes, which investment shall not
be deemed, in and of
itself, to be a violation of this Section 5(a)(i);
or
(ii)
Solicit any current
employee, supplier,
customer, or
client of the Company with whom Zwicker dealt on behalf of the Company
within the year
preceding the Effective Date, for the purpose of
researching,
financing, developing
or purchasing, selling or marketing
products or
services which are or would be competitive with those
products or services marketed by the Company at the Effective
Date.
(b)
Zwicker acknowledges
and agrees that breach by him of the
provisions of this
Section 5 shall
entitle the Company,
at its option and
in
addition to any other remedies available to it at law or in equity,
to terminate
this Agreement,
including,
but not limited to,
termination
of the remaining
payments and
benefits, if any, to be made to Zwicker
under Sections 2 and 3
hereof. Said
termination shall not
negate or affect the release of claims made
by Zwicker under Section 6(a), which shall remain in full force
and effect. If
the Company should elect to terminate the remaining payments and benefits to be
made to Zwicker in the event of Zwicker's breach of this Section 5,
however, it
agrees that the restrictive covenants contained in this Section 5 shall,
from
that point in time, no longer be in effect.
6. MUTUAL
RELEASE OF CLAIMS.
(a)
Zwicker, and anyone
claiming through Zwicker or on Zwicker's
behalf, agree to
release the Company and the other Released Parties (as defined
below) with respect to any and all claims, whether currently known or unknown,
that Zwicker now has, has ever had, or may ever have against the
Company and any
of the other Released
Parties arising from
or related to any
agreement, act,
omission, or thing
occurring or existing at any time prior to the
Effective
Date. Without limiting
the foregoing, the
claims released by Zwicker hereunder
include, but are not limited to:
(i)
All claims
for or related in any way to Zwicker's
employment,
compensation, other
terms and conditions of employment, or
termination from
employment
with the Company, including without
limitation all claims
for salary,
bonus, severance pay, vesting of
options or any other compensation or benefit whether under an
employment
agreement, any other
agreement, any Company
policy, plan or program or
otherwise;
(ii) All
claims that were or could have been asserted by
Zwicker or on
Zwicker's behalf:
(a) in any federal,
state, or local
court, commission,
or agency;
(b) under any common
law theory; or (c)
under any employment,
contract, tort, federal, state, or local law,
regulation, ordinance, constitutional provision, or executive
order; and
(iii) All
claims that were or could have been asserted by
Zwicker or on Zwicker's behalf arising under any of the
following laws,
as amended from time to time: the Age Discrimination in Employment
Act,
Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act,
the Employee
Retirement
Income Security Act, the
Family and Medical
Leave Act,
the Worker
Adjustment
and Retraining
Notification Act,
or any other
related laws, rules and regulations
enacted in the State of Connecticut.
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<PAGE>
(b)
The Company and the Released Parties agree to release Zwicker
and his heirs and assigns with respect to any and all claims,
whether currently
known or unknown, that
the Company and the Released Parties now have, have ever
had, or may ever have against Zwicker arising from or related to
any agreement,
act, omission, or thing occurring or existing at any time prior to
the Effective
Date. The only
exception shall be that this release shall not prohibit the
Company with respect to any criminal or fraudulent acts or omissions by Zwicker
that are unknown by the Company as of the Effective Date.
(c)
The term "Released Parties" as used in this Agreement includes:
(i) the Company and its past, present, and future parents, divisions,
subsidiaries,
partnerships,
affiliates, and other related entities (whether or
not they are wholly
owned); and (ii) the
past, present,
and future owners,
trustees, fiduciaries,
administrators,
shareholders,
directors,
officers,
partners, agents, representatives, members, associates, employees,
and attorneys
of each entity
listed in subpart (i) above; and (iii) the predecessors,
successors, and assigns of each entity listed in subparts (i) and
(ii) above.
(d)
The parties
acknowledge and agree that the releases provided in
this Section 6 shall
not apply to (i)
breaches of the terms of this Agreement
(ii) vested
benefits under any employee welfare plan, including without
limitation,
401(k), health
and welfare plans, (iii) any rights to
indemnification under
applicable
statutes, bylaws or contracts which
existed
prior to the
date of this Agreement or as the same may in the future be
expanded, and (iv)
rights under COBRA,
workmen's compensation
plans and HIPPA
(Health Insurance Protection Portability Act).
7. MUTUAL
COVENANT NOT-TO-SUE.
(a)
Zwicker covenants
and agrees not to f
