SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE AGREEMENT ("Release") is made and entered into
between Travers H. Wills ("I," "Me," and "My") and United HealthCare
Corporation, including its present and former subsidiaries and affiliated
corporations ("Employer").
RECITALS:
A. My employment with Employer will terminate on January 1, 1999.
B. It is the Employer's policy to require employees who receive
separation payments to sign a release of claims. In exchange for the
consideration set forth in this Agreement, I have agreed to the provisions of
this Agreement and to release Employer from any claims arising out of my
employment or termination of employment.
AGREEMENT
In consideration of the recitals stated above and the mutual promises made
below, Employer and I agree as follows:
1. TERMINATION. My last day of work will be January 1, 1999 and my
termination shall be effective as of that date. I agree that I will not be
entitled to any severance payments under my employment agreement.
2. PAYMENTS. Employer will pay me my final payroll check for work through
January 1, 1999. I will be eligible for the 1998 MIP and will receive any
additional payment in accordance with company guidelines.
3. CONSULTING AGREEMENT. Employer and I have entered into a consulting
agreement concurrent herewith in the form attached to this agreement
pursuant to which I will be entitled to receive monthly payments of $49,000
through July 1, 2000, all in accordance with such agreement.
4. ADDITIONAL CONSIDERATION. As additional consideration for my agreement to
the terms contained herein, Employer agrees to: continue to vest through
December 31, 1999 any unvested stock option grants awarded to me under
Employer's stock option plans. Such options shall vest (a) at a rate of at
least 20% of the total number of shares covered by each such option grant
on the anniversary date of the option grant for grants made before July 1,
1996; and (b) at a rate of at least 25% of the total number of shares
covered by each such option grant on the anniversary date of the option
grant for grants made after July 1, 1996. In addition the option grant of
October 1997 will be considered for vesting by March 31, 2000. I shall
have until December 31, 2002 to exercise vested options including options
that vest through December 31, 1999 and the options vesting in
the first quarter of 2000. Employer also agrees to continue health care
coverage in accordance with COBRA for an additional 18 months after the
date of termination of employment. Following the COBRA eligibility period,
Employer agrees to offer me the ability to purchase health insurance under
the United HealthCare policy at company rates until I am eligible for
Medicare or become eligible for other health insurance through new
employment and similarly agrees to offer my spouse the ability so to
purchase health insurance until my spouse is eligible for Medicare or
becomes eligible for other health insurance through new employment. I
shall be responsible for the premiums payable with respect to such health
care coverage. In addition, Employer agrees to pay me the pro rata share
of Employer's Long Term Incentive Plan for the two-year period ending
December 31, 1998. This payment will be made in the Spring of 1999 in
accordance with the Long Term Incentive Plan.
5. RELEASE. In exchange for these payments, I agree to release Employer from
all claims, demands, actions or liabilities I may have against Employer of
whatever kind, including but not limited to those which are related to my
employment with Employer or the termination of that employment. I agree
that this also releases from liability Employer's subsidiary and affiliated
corporations, their predecessors, and each of their present or former
agents, directors, officers, employees, representatives, shareholders,
successors and assigns ("those associated with Employer"), whether in their
official or individual capacities. I agree that I have executed this
Release on my own behalf, and also on behalf of any heirs, agents,
representatives, successors and assigns that I may have now or in the
future.
I also agree that this Release covers claims under any federal, state or
local statute, regulation or common law doctrine regarding or relating to
employment discrimination, terms and conditions of employment, or
termination of employment including, but not limited to, the following:
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866,
the Civil Rights Act of 1991, the Age Discrimination in Employment Act,
the Older Workers Benefit Protection Act, the Rehabilitation Act of 1973,
the Americans With Disabilities Act, the Employee Retirement Income
Security Act of 1974, and all applicable amendments; state human rights or
fair employment practices laws; breach of contract, promissory estoppel,
or any other contract theory; defamation, employment negligence, or any
other tort theory; and rights in any welfare benefit plan or any pension
or retirement plan sponsored by Employer. However, this Release does not
preclude my right to obtain the vested and non-forfeitable balance in my
accounts under any pension or retirement plan sponsored by the Employer
or preclude me from exercising my right to continuation coverage or my
conversion rights, if any, under Employer's welfare benefit plans.
I also agree that with respect to any released claim(s), that I will never
file a lawsuit or demand for arbitration, or institute a claim of any kind
against Employer, or those associated with Employer, including, but not
limited to, claims
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related to my employment with Employer or the termination of that
employment. Nothing contained herein, however, shall be construed to
constitute a waiver of future claims, or to prohibit me from seeking
recourse through a government agency. However, this Release includes a
release of my right to file a court action or to seek individual remedies
or damages in any court action filed by any such government agency and my
release of these rights shall apply with full force and effect to any
proceedings arising from or relating to such recourse including, but not
limited to, the right to monetary damages or other individual legal or
equitable relief awarded by any governmental agency.
If I violate this Release by breaching any of the promises contained
herein, including but not limited to filing a lawsuit or demand for
arbitration, or instituting a claim against Employer or those associated
with Employer, I agree that I will return all separation payments received
pursuant to this Release. I further agree that I will pay all costs and
expenses of defending against the suit, arbitration, or claim incurred by
Employer or those associated with Employer, including reasonable attorneys'
fees.
Nothing in the foregoing release, however, shall be construed to limit
Employer's obligation to indemnify me for my actions while employed by
Employer as provided in Employer's governing documents or to limit my
ability to pursue a claim against Employer for not complying with its
indemnification obligations.
6. PERIOD TO CONSIDER SIGNING RELEASE. I have been given a period of
twenty-one (21) days to consider whether I want to sign this Release.
7. REVOCATION PERIOD. This Release does not become effective for a period of
seven days after it is signed by me and I have the right to revoke it
during that period. Any revocation must be in writing and delivered to
Robert J. Backes, Senior Vice President, Human Resources, 9900 Bren Road
East, MN008-8317, Minnetonka, Minnesota, 55343 within the seven-day
period. If this person does not RECEIVE a written revocation by the end
of the seven-day period, this Release will become fully enforceable at
that time. I understand that if I revoke this Release, I will not be
entitled to receive the additional separation payments.
8. COOPERATION WITH EMPLOYER. I agree to cooperate with Employer with respect
to any administrative or legal investigations or proceedings concerning
matters that arose during my employment. My cooperation includes making
myself available to assist with such matters as requested by Employer. I
acknowledge that I am not entitled to further compensation or consideration
from Employer for such cooperation or assistance, except to the extent any
witness fees are mandated under federal or state law.
9. CONSULTING AN ATTORNEY. I acknowledge that I have been advised to
consult with an attorney and that any legal consultation will be at my
own expense. I have
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had adequate opportunity to consult with an attorney, and I have read
and understand the terms of this Release and am voluntarily signing this
Release.
10. CONFIDENTIALITY. The terms of this Release will be treated as confidential
by me and Employer and neither of us shall disclose its terms to anyone
except I may disclose the terms of this Release to my spouse, legal
counsel, accountant, and as required by law. Employer may disclose the
terms of this Release to its officers and directors, outside auditors, and
to employees or agents of it or its parent corporation who have a
legitimate need to know the terms in the course of performing their duties,
and as required by law. I recognize and agree that this confidentiality
provision was a significant inducement for the Employer to enter into this
Release. In the event of a breach by me of the terms of this paragraph,
all payments to me shall cease and I shall reimburse all payments made
under this Release.
11. NO FUTURE EMPLOYMENT WITH EMPLOYER. I agree that I will not, at any time
in the future, apply for or accept employment with Employer or any
corporation that is an affiliate of Employer. I agree that any such
corporation has the right not to consider my application for future
employment and the right to deny me future employment without any
recourse.
12. CONFIDENTIAL OR PROPRIETARY INFORMATION. During the course of my
employment, I may have developed knowledge regarding Employer's
organization, strategies, business and operation, and Employer's
past, current or potential customers and suppliers. I acknowledge
that Employer considers such information to be valuable, confidential,
and proprietary. I understand that I may not disclose confidential or
proprietary information obtained by me during my employment with Employer.
13. NON-ADMISSION. Nothing in this Release is intended to be, nor will be
deemed to be, an admission of liability by the Employer that it has
violated any state or federal statute, local ordinance, or principle of
common law, or that it has engaged in any wrongdoing.
14. CONTINUATION RIGHTS. All benefits and coverages will cease on the effective
date of my termination, except in accordance with the terms of the benefit
plan or applicable law.
15. NON-DISPARAGEMENT AND NON-SOLICITATION. I agree that I will not criticize,
make any negative comments or otherwise disparage or put in disrepute
Employer, or those associated with Employer in any way, whether orally, in
writing or otherwise, directly or by implication in communication with any
person, including but not limited to customers or agents of Employer. In
addition, for the one-year period after I cease receiving any payments
pursuant to this Release, I agree that I will not directly or indirectly
recruit, induce, or solicit any employee of Employer for employment.
Employer agrees that in response to written inquiries
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concerning my employment, it will provide only my dates of employment and
last position held with Employer.
16. DISCLOSURE. I acknowledge that I have advised Employer's legal counsel
completely and candidly of all facts that I am aware of that constitute or
might constitute violations of Employer's ethical or legal obligations or
standards.
17. INVALIDITY. In case any one or more of the provisions of this Release
shall be invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained in this
Release will not in any way be affected or impaired thereby.
18. GOVERNING LAW. This Release will be construed and interpreted in
accordance with the laws of the State of Minnesota.
19. ENFORCEABILITY. In case any part of this Release shall be invalid, or
unenforceable for any reason, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired. Any
claim that I bring to enforce the terms of this Release will be subject to
Employer's Arbitration Policy.
20. ENTIRE AGREEMENT. I have signed this Release with the understanding that
this is the entire agreement between me and Employer relating to my
employment and termination from employment. This Release includes all
prior discussions and agreements between me and Employer. I acknowledge
that this Release cannot be changed except by writing signed by both me
and Employer.
United HealthCare Corporation
By: /s/ Robert J. Backes
-----------------------------
Its: Senior Vice President
----------------------------
/s/ Travers H. Wills
- -------------------------------
Travers H. Wills
Date: January 14, 1999
--------------------------
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CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made by and among United
HealthCare Services, Inc. ("UHS") and Travers H. Wills ("Contractor") to be
effective as of January 2, 1999 (the "Effective Date") for the purpose of
setting forth the terms and conditions under which Contractor shall provide
certain services to UHS. When used in this Agreement, "UHS" includes any
affiliated entity of UHS.
WHEREAS, UHS desires to retain Contractor to render consulting and
advisory services for UHS on the terms and conditions set forth in this
agreement, and Contractor desires to be retained by UHS on such terms and
conditions.
NOW, THEREFORE, in consideration of the premises, the respective
covenants and commitments of UHS and Contractor set forth in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, UHS and Contractor agree as follows:
1. RETENTION OF CONTRACTOR, SERVICES TO BE PERFORMED. UHS hereby retains
Contractor to render consulting services regarding strategic and business
issues related to UHS as mutually agreed upon from time to time by the
parties. Contractor shall perform the services called for by this
Agreement in accordance with the highest standards of the industry.
2. TERM AND TERMINATION. Unless earlier terminated as set forth herein, this
Agreement shall commence on the Effective Date and shall continue through
July 1, 2000. Notwithstanding the foregoing, this Agreement may be
terminated at any time by either party on 30 days' prior written notice,
and this Agreement shall immediately terminate in the event of the death or
disability of Contractor. If UHS terminates this Agreement prior to July
1, 2000, UHS shall pay Contractor any sums that remain payable under
Section 3A through July 1, 2000. Provided, however, UHS shall not be
obligated to make such payments if it terminates this Agreement because
Contractor has materially breached this Agreement and has not
satisfactorily remedied the breach within 30 days following UHS' notice of
breach.
3. COMPENSATION. As compensation in full for the services to be provided
hereunder, UHS shall pay Contractor the following amounts:
A. RETAINER. UHS shall pay Contractor a retainer of $49,000 per month,
commencing on the Effective Date.
B. EXPENSE REIMBURSEMENT. UHS will reimburse Contractor for all
reasonable out-of-pocket expenses related to the provision of services
hereunder in accordance with the UHS's expense reimbursement policies.
4. CONFIDENTIALITY. Contractor acknowledges that in the course of providing
services to UHS, he may become aware of or come into possession of certain
confidential or proprietary information and documents belonging to UHS.
Contractor shall not copy any such information without UHS's prior written
permission, shall not disclose such information to any other person, shall
not use such information for any purpose other than performing services
under this Agreement and shall return all copies of any such information
when all services to be performed under this Agreement have been performed
or immediately upon request by UHS. This Section 4 shall survive
termination of this Agreement.
5. OWNERSHIP OF WORK PRODUCT. Contractor acknowledges that any work product
of any type generated by Contractor under this Agreement belongs solely to
UHS, and Contractor hereby assigns and transfers to UHS any and all rights
which Contractor might have asserted to such work product, including any
copyright, patent, trademark, trade secret or other intellectual property
rights. Contractor will cooperate with UHS and will execute any
documentation required by UHS to assert or protect its property rights in
the work product. This Section 5 shall survive termination of this
Agreement.
6. RELATIONSHIP OF PARTIES. The sole relationship of the parties is that of
independent contractors and nothing in this Agreement or otherwise shall be
deemed or construed to create any other relationship, including one of
employment, joint venture or agency. Contractor shall be solely
responsible for any taxes of any type, including social security taxes,
workers' compensation taxes or costs, unemployment compensation taxes or
costs or any other similar taxes, costs or charges or any other taxes or
charges related to Contractor's receipt of compensation and performance of
services under this Agreement, and shall indemnify and hold UHS harmless
against any such taxes or charges. This Section 6 shall survive
termination of this Agreement.
7. INDEMNIFICATION. Contractor indemnifies and holds harmless UHS, its
directors, officers and employees from any claims, liability, judgments,
damages or costs, including reasonable attorneys' fees, asserted or awarded
against or incurred by UHS, its directors, officers or employees as a
result of any act or omission of Contractor. This Section 7 shall survive
termination of this Agreement.
8. DISPUTES. Any dispute relating to or arising under this Agreement shall be
resolved by binding arbitration pursuant to the Commercial Rules of the
American Arbitration Association. This Section 8 shall survive termination
of this Agreement.
9. NON-DISPARAGEMENT AND NON-SOLICITATION. Contractor agrees that he will not
criticize, make any negative comments or otherwise disparage or put in
disrepute UHS, or those associated with UHS in any way, whether orally, in
writing or otherwise, directly or by implication in communication with any
person, including but not limited to customers or agents of UHS. In
addition, during the term of this Agreement, during any successive terms
thereafter, and for one year after the
termination of this Agreement, Contractor will not directly or indirectly
recruit, induce, or solicit any employee of UHS for employment. This
Section 9 shall survive termination of this Agreement.
10. MISCELLANEOUS.
A. ENTIRE AGREEMENT: This Agreement contains the entire understanding of
the parties and may be amended only in writing signed by the parties.
This Agreement shall supersede any prior agreements between the
parties in regard to the same subject matter for services rendered
after the effective date.
B. ASSIGNMENT: Contractor may not assign this Agreement or any rights
and obligations under it this unless UHS has given its prior written
consent to such assignment.
C. GOVERNING LAW: This Agreement shall by governed by and construed in
accordance with the laws of the State of Minnesota.
D. INJUNCTIVE RELIEF: Contractor acknowledges that it would be difficult
to fully compensate UHS for damages resulting from any breach by
Contractor of the provisions of Sections 4, 5, 9 or 10 of this
Agreement. Accordingly, in the event of any actual or threatened
breach of such provisions, UHS shall, in addition to any other
remedies it may have, be entitled to temporary and/or permanent
injunctive relief to enforce such provisions, and such relief may be
granted without the necessity of proving actual damages.
E. SEVERABILITY: To the extend any provision of this Agreement shall be
determined to be invalid or unenforceable, such provision shall be
deleted from this Agreement, and the validity and enforceability of
the remainder of such provision and of this Agreement shall be
unaffected.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
United HealthCare Services, Inc.
/s/ Travers H. Wills
By /s/ David J. Lubben -----------------------------
----------------------------------- Travers H. Wills
Date Date 1/04/99
--------------------------------- -----------------------------