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8-K - FORM 8-K REGARDING CONSULTING AGREEMENT - WELLCARE HEALTH PLANS, INC. | form8-k.htm |
Exhibit 10.1
December
16, 2009
Mr.
Thomas F. O’Neil III
c/o
WellCare Health Plans, Inc.
8735
Henderson Road
Renaissance
Two
Tampa, FL
33634
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Re:
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Consulting
Agreement
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Dear
Tom:
This
letter memorializes the terms of your consulting arrangement with WellCare
Health Plans, Inc., a Delaware corporation (“WellCare”), and Comprehensive
Health Management, Inc., a Florida corporation (the “Company”). If you
agree with its terms, please return to us a countersigned copy of this letter,
which will become a binding agreement on our receipt.
1.
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Engagement as
Consultant
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(a)
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Beginning
on January 1, 2010, through your firm, you will serve as a consultant to
Wellcare and the Company. As a consultant, your duties during
the Term of this letter (as defined in Section 3 below) will be to provide
advice and consulting services as an independent contractor for about 20
hours per week. Your services under this letter will be as
mutually agreed between you and the Executive Chairman of the Board of
Directors of WellCare from time to time (the “Services”).
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(b)
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Wellcare
and the Company will provide you with an office at WellCare headquarters
and appropriate administrative support during the Term for the purpose of
performing the Services.
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2.
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Expiration of
Employment Agreement; Bonus Amounts for
2009
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(a)
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Until
December 31, 2009, the terms and conditions of your employment with
Wellcare and the Company will be governed by your Amended and Restated
Employment Agreement with WellCare and the Company, dated as of June 3,
2009 (your “Employment
Agreement”).
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(b)
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In
accordance with its terms, your Employment Agreement will expire on
December 31, 2009 (for clarity, the restrictive covenants contained in
Article 5 of your Employment Agreement will continue as described in
Section 6(a) of this letter). From and after such time, you
will cease to be employed by the Company as its Vice Chairman, cease to be
employed by WellCare as its Vice Chairman, and cease to be a director,
officer, employee and/or hold other position with WellCare, the Company,
and all of their subsidiaries and affiliates (collectively, the “Group”), other than as
set forth in this letter. Other than as set forth in Section
2(c) of this letter, you agree that no other severance payments or similar
or other termination payments will be payable to you under your Employment
Agreement or otherwise.
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(c)
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The
parties hereto agree that, assuming you remain employed with the Group
under your Employment Agreement through December 31, 2009 (1) the amount
of your bonus payable to you in respect of calendar year 2009 pursuant to
Section 2.2 of your Employment Agreement will be $250,000 (payable no
later than January 15, 2010); (2) the amount of the “special bonus” that
will be paid to you in respect of calendar year 2009 pursuant to Section
2.2 of your Employment Agreement will be $125,000 (payable no later than
January 15, 2010); (3) you will receive $500,000 on December 31, 2009
pursuant to Section 3.5(i) of your Employment Agreement; and (4) the
amount of the “additional payment” described in Section 3.5(ii) of your
Employment Agreement will be $250,000 (payable no later than January 15,
2010), all of which will be payable in cash, and subject to all applicable
employee income and payroll tax
withholdings.
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3.
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Term
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(a)
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The
period of your consulting duties under this letter will be from January 1,
2010 through June 30, 2010 (the “Term”).
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(b)
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The
Group or you may terminate this letter and the Term as provided in
Section 5.
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4.
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Consulting Fees;
Equity; Expense
Reimbursement
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(a)
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Your
consulting fee for the Services will be $31,250 per month during the
Term. The parties agree to assess in good faith the consulting
fee from time to time during the Term (based upon, among other factors,
the level and quality of Services being provided), and to make reasonable
adjustments, if any, based on such review. Your consulting fee
will be payable in cash on a monthly basis, in
arrears.
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(b)
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As
an additional fee for your services, your outstanding and unvested Group
restricted stock, stock options, and restricted stock units will continue
to vest and, with respect to the stock options, become exercisable, during
the Term, in accordance with their normal vesting schedules set forth in
the equity award agreements between WellCare and you, conditioned on your
continued provision of Services under this letter as of the date(s) of
such vesting. All of your outstanding equity awards that have
not vested as of the last day of the Term will be
cancelled. With respect to your stock options, you will have a
period of 90 days after the date of the expiration or termination
(whichever occurs first) of the Term to exercise your vested stock
options.
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(c)
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The
Group will reimburse you in accordance with its reimbursement policies
from time to time for your actual out-of-pocket expenses as reasonably
incurred by you in connection with your performance of the Services,
including reasonable travel approved in advance by the
Group. You agree to abide by Group policies and procedures
related to the Services and to the reimbursements to be provided under
this letter.
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5.
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Termination
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(a)
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The
Group may terminate this letter and the Term before its scheduled
expiration by written notice to you if you are in material breach of this
letter. The Group may also terminate this letter and the Term
for any other reason (or no reason), with or without notice, upon which
(A) the Group will pay you the remaining unpaid installments of your
consulting fee set forth in Section 4(a) in a lump sum, and (B) you will
immediately vest in the outstanding equity described in Section 4(b) in
which you would have vested had the Term continued through June 30,
2010.
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(b)
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You
may terminate this letter and the Term before its scheduled expiration by
giving at least 45 calendar days advanced written notice to
WellCare.
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(c)
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This
letter and the Term will automatically terminate in the event of your
death or disability during the
Term.
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(d)
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In
the event of a termination other than pursuant to the second sentence of
Section 5(a) of this letter, no further consulting payments or equity
vesting will occur under this
letter.
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6.
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Restrictions
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(a)
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The
parties hereto agree and acknowledge that the restrictive covenants set
forth in Article 5 of your Employment Agreement will remain in full force
and effect after expiration of your Employment Agreement, references to
“employment” therein will be deemed to refer to your consultancy
hereunder, where appropriate, and, solely for purposes of Section 5.3 of
your Employment Agreement, the “Term” will be deemed to be coextensive
with the Term of this letter (and, for clarity, your “Termination Date”
solely for this purpose will be deemed to be June 30,
2010). Without limiting the protections afforded to the Group
in relation to the foregoing, the Group specifically acknowledges and
agrees that you may engage in other employment or services for other
businesses during the Term, including self employment involving the
establishment of a legal practice or a consulting firm specializing in,
among other things, compliance activities and governmental investigations,
consistent with your obligations under Article 5 of your Employment
Agreement.
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(b)
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The
obligations contained in this Section 6 will endure even after the
termination of this letter and the
Term.
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7.
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Representations and
Warranties
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In your
performance of the Services, you will:
(a)
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Devote
the necessary and appropriate amount of time, attention and skill to the
performance of your duties;
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(b)
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Use
your best efforts to promote the Group’s
interests;
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(c)
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Abide
by the Group’s rules and procedures in effect, including but not limited
to the code of conduct, all travel and entertainment and luxury policies;
and
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(d)
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Not
disparage the Group, its officers, directors or
employees.
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8.
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Independent
Contractor
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You agree
that you will be performing the Services during the Term as an independent
contractor and not as an employee of the Group. You will be
responsible for all taxes and other non-reimbursable expenses attributable to
the rendition of the Services. Neither you nor the Group will be or
become liable to or bound by any representation, act or omission of the
other.
9.
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Release of
Claims
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You agree
to waive and release the Group and their respective officers, directors,
employees and agents from any and all claims by executing the Waiver and Release
Agreement set forth on Exhibit A appended to your Employment Agreement on or
prior to December 31, 2009.
10.
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Miscellaneous
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(a)
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The
provisions of Article 6 and Article 7 of your Employment Agreement are
hereby incorporated by reference into this
letter.
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(b)
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You
agree that you will not issue any press release or public statement of any
kind, or publicize this letter or the business relationship between the
parties without the prior review and approval of the Group, except as
required by applicable law upon prior notice to the
Group.
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(c)
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This
letter constitutes the entire agreement of the parties hereto and
supersedes all prior and contemporaneous representations, proposals,
discussions and communications, whether oral or in
writing. This letter may be modified only in a writing signed
by you and WellCare and the
Company.
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-4-
Accepted
and Agreed:
/s/ Thomas F. O’Neil
II
Thomas F.
O’Neil III
WellCare
Health Plans, Inc.
By:
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/s/ Charles
Berg
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Name: Charles
Berg
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Title: Executive
Chairman
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Comprehensive
Health Management, Inc.
By:
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/s/ Timothy
Susanin
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Name: Timothy
Susanin
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Title: General
Counsel
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