Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

This SEPARATION AND RELEASE (“Agreement”), dated as of December 15, 2016, is
entered into between and among First Choice ER, LLC, a Texas limited liability
company (the “Company”) and Graham Cherrington (“Executive”) (collectively, the
“Parties”).

 

WHEREAS, Executive was employed by the Company pursuant to the Employment
Agreement between Executive and the Company, dated May 29, 2012, as amended by
the Amendment to Employment Agreement between Executive and the Company, dated
June 24, 2014 (collectively, the “Employment Agreement”);

 

WHEREAS, the Parties desire to effectuate an amicable separation of Executive’s
employment with the Company in accordance with the Employment Agreement;

 

NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the Parties agree as follows:

 

1.                                      Separation from Employment.  Executive’s
last day of employment with Adeptus Health, Inc. (“Adeptus”) was December 2,
2016 (the “Separation Date”).  Executive agrees that from and after the
Separation Date, he shall no longer be, and shall not hold himself out as, an
officer, director, manager, representative, employee or agent of the Company,
Adeptus or any of their parents, subsidiaries or affiliates.  Executive hereby
resigns from all positions and titles with the Company or Adeptus as of
December 2, 2016, including, without limitation, the positions and titles of
President and Chief Operating Officer of Adeptus and all other positions,
directorships and officerships with the Company, Adeptus or any of their
parents, subsidiaries or affiliates (including the Executive’s position on any
Boards of Directors).  The Company will pay Executive all unpaid salary, unused
vacation and expense reimbursements that Executive accrues through the
Separation Date, subject to applicable taxes and withholdings.  Executive will
immediately return to the Company all property belonging to the Company or
Adeptus, including, without limitation, all Confidential Information (as defined
in the Employment Agreement), and Executive shall retain no copies thereof.

 

2.                                      Consideration.  If Executive signs and
does not revoke this Agreement, abides by its terms and conditions and the
surviving obligations of the Employment Agreement, then the Company shall
provide the following benefits to Executive:

 

(a)                                 The Company shall pay Executive a severance
payment (the “Severance Payment”) equal to $550,000.00, subject to applicable
taxes and withholdings, payable in equal installments in accordance with the
Company’s ordinary payroll schedule over a period equal to twelve (12) months,
commencing on the first Company payroll date occurring after the Effective Date
as defined in Section 5 (the “Severance Period”).  Neither the Company nor
Adeptus shall be obligated to provide Executive with any compensation or
benefits beyond the Separation Date, other than as required by this Agreement or
by law.  Any obligation of the Company to make the Severance Payment shall cease
pursuant to Section 9 below.

 

(b)                                 During the Severance Period, if Executive
properly elects continued medical or dental coverage pursuant to, and subject to
the requirements of, Sections 601 through

 

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608 of the Executive Retirement Income Security Act of 1974, as amended, and
Code Section 4980B (collectively, “COBRA”), the Company will pay the employer
portion of the health insurance premiums the Company would have otherwise paid
on Executive’s and his dependents’ behalf for health insurance coverage had
Executive remained employed by the Company during the Severance Period, provided
that (i) the period during which the Company provides the above benefit shall
run concurrently with the coverage period required to be made available under
COBRA; and (ii) to the extent required to comply with, or to avoid excise or
other taxes under, the Affordable Care Act or the Internal Revenue Code, any or
all of the benefits of this paragraph will be treated as additional taxable
compensation.

 

(c)                                  Company, at Company’s sole cost and
expense, shall permit Executive access to, and use of, the
PricewaterhouseCoopers LLC (“PWC”) agents currently engaged by Company for
purposes of preparing and filing Executive’s 2016 federal tax return.  The scope
of PWC’s engagement as it relates to Executive (i) shall be limited to the
preparation and filing of Executive’s 2016 federal tax return, and (ii) shall be
consistent with the tax services to be provided by PWC to other Company
executives receiving the same benefit.

 

3.                                      Equity.  The Parties acknowledge that,
effective on the Separation Date: (a) Executive shall hold 47,647 vested shares
of restricted stock of Adeptus (the “Vested Shares”); (b) Executive shall
forfeit 44,713 unvested shares of restricted stock; and (c) Executive holds no
other equity or ownership interests in Adeptus, the Company, or any of their
affiliates.  Subject to the foregoing, all of the above vested equity holdings
remain subject to applicable grant agreements and plan rules, including the
Amended and Restated Adeptus Health Inc. 2014 Omnibus Incentive Plan, the
Amended and Restated Restricted Units Agreement between Executive and Adeptus
Health LLC, a Delaware limited liability Company (the “Restricted Units
Amendment”), the Restricted Stock Grant Notice dated February 18, 2015, and the
Restricted Stock Grant Notice dated February 25, 2016.

 

4.                                      Release of Claims.  In exchange for the
Company’s obligations under this Agreement, Executive, on Executive’s own behalf
and on behalf of Executive’s heirs, executors, administrators, successors, and
representatives, releases and discharges the Company, Adeptus and the current,
former and future parents, subsidiaries, owners, affiliates and benefit plans of
each of them (collectively, the “Group Company”); and all current, former and
future partners, officers, directors, employees, attorneys and agents of the
Group Company (together with the Group Company, the “Released Parties”) from any
and all claims accruing on or before the Effective Date that Executive has or
may have against them, whether such claims are known or unknown, actual or
contingent, asserted or unasserted, and whether they arise under common law,
statute, regulation, ordinance, or other source of law enacted by any governing
body, including, without limitation, any claims arising out of Executive’s
employment with the Company, and any claims for bonus or other compensation or
entitlement not explicitly provided for in this Agreement; provided that this
release does not extend to: (a) claims that the law does not permit Executive to
waive; (b) the Vested Shares; or (c) claims under the Age Discrimination in
Employment Act, as amended, and its implementing regulations (together, the
“ADEA”), which are released at Section 5.

 

5.                                      ADEA Release.  In exchange for the
Company’s obligations under this Agreement, including Section 2, Executive
unconditionally waives, releases and discharges the

 

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Released Parties from any and all claims, whether known or unknown, from the
beginning of time to the date of Executive’s execution of this Agreement,
arising under ADEA.  Executive acknowledges that:

 

(a)                                 this Agreement is written in a manner
calculated to be understood by Executive;

 

(b)                                 this Agreement represents Executive’s
knowing and voluntary release of any and all claims that Executive might have,
including, but not limited to, any claims arising under the ADEA;

 

(c)                                  Executive has not been asked to release,
nor has Executive released any claim under the ADEA that may arise after the
effective date of this Agreement;

 

(d)                                 the consideration that Executive will
receive in exchange for this Agreement is something of value to which Executive
is not otherwise entitled;

 

(e)                                  Executive is hereby advised to consult with
an attorney before signing this Agreement; and

 

(f)                                   Executive understands that Executive has
twenty-one (21) calendar days to consider this Agreement before signing it, and
that Executive may revoke Executive’s release of ADEA claims under this
Section within seven (7) calendar days of signing it by sending e-mail notice of
revocation to Traci Bowen at traci.bowen@adpt.com.  If no such revocation
occurs, the Agreement shall become effective on the eighth (8th) day following
the Executive’s execution of this Agreement (the “Effective Date”).

 

6.                                      Confidentiality.  Subject to Section 13,
each of the Parties agrees and covenants that each such Party shall not disclose
to any third party (a) any of the terms of or amount paid under this Agreement;
(b) any negotiation thereof; or (c) any of the details surrounding the facts
giving rise to Executive’s agreement to make the Payment to the Company.

 

7.                                      No Admission.  Nothing in this Agreement
shall be construed as an admission of wrongdoing or liability on the part of the
Released Parties.

 

8.                                      Voluntary Acknowledgement.  This
Agreement has been reached by mutual and purely voluntary agreement between
Executive and the Company.  Executive acknowledges that Executive fully
understands the terms of the Agreement, that Executive has not been under any
duress, coercion or undue influence to execute the Agreement, and that Executive
is executing it in exchange for consideration to which Executive would not
otherwise be entitled.  Executive acknowledges that Executive has freely,
knowingly and voluntarily decided to accept these benefits, and that this
Agreement has binding legal effect.

 

9.                                      Acknowledgments.  Executive acknowledges
that: (a) Executive remains bound by the surviving obligations of the Employment
Agreement and the Restricted Units Amendment, including, without limitation, the
confidentiality, non-solicitation and non-competition obligations contained
therein; (b) such obligations are supported by adequate

 

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consideration, including employment with the Company, the Vested Shares awarded
to Executive, and the Severance Payment; (c) such obligations are reasonable and
necessary to protect the Group Company’s legitimate business interests; and
(d) should Executive breach any such obligations, Executive shall thereby
automatically forfeit the Severance Benefits and shall immediately repay to the
Company the Severance Payment, except for the first installment of the Severance
Payment, which Executive acknowledges constitutes adequate consideration for
this Agreement.

 

10.                               Representations.  Executive represents and
warrants that:  (a) Executive has filed no pending claims with any court or
government agency against any of the Released Parties; and (b) Executive has not
breached any terms of any agreement between Executive and the Company regarding
confidential information, competition or solicitation of clients or employees of
the Group Company, including the Employment Agreement.

 

11.                               Non-Disparagement.  Subject to the terms of
this Agreement, Executive will not make, publish or communicate to any third
party any defamatory or disparaging remarks, comments or statements concerning
the Released Parties.

 

12.                               Cooperation.  The Parties agree that certain
matters in which Executive has been involved during Executive’s employment may
necessitate Executive’s cooperation with the Company in the future.  To the
extent reasonably requested by the Company, Executive shall cooperate with the
Company in connection with matters arising out of Executive’s service to the
Company; provided that the Company shall make reasonable efforts to minimize
disruption of Executive’s other activities.

 

13.                               Permitted Communications.  Nothing in this
Agreement shall be construed to prohibit Executive from providing truthful
information to any government agency in connection with an investigation by such
agency into a suspected violation of law.  Executive shall not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that: (a) is made (i) in confidence to a federal,
state, or local government official, either directly or indirectly, or to an
attorney; and (ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (b) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.  The
Parties may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers and financial advisors.

 

14.                               Entire Agreement.  Except as provided in this
Agreement, this Agreement constitutes the entire agreement among the Parties
regarding the subject matter hereof, and it supersedes and cancels all prior and
contemporaneous written and oral agreements among them, if any.  Executive
affirms that, by entering into this Agreement, Executive is not relying upon any
other oral or written promise or statement made by anyone at any time on behalf
of the Company.  This Agreement may not be changed or altered, except by a
writing signed by the Parties.

 

15.                               409A.  The Parties intend this Agreement to be
either exempt from or compliant with Section 409A of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated under that section
(“Section 409A”), and this Agreement will be interpreted and

 

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administered accordingly, provided, that the Company shall not have any
obligation to prevent, minimize, or make a gross-up payment to offset any
negative consequences to Executive under Section 409A and shall not have any
liability to Executive for such negative consequences.  To the extent any
payment or benefit under this Agreement is subject to Section 409A, the
following conditions will apply:

 

(a)                                 The parties designate each payment hereunder
as a separate payment.

 

(b)                                 “Termination of employment,” or words to
that effect used in this Agreement, means Executive’s “separation from service”
(as defined under Section 409A) to the extent the termination triggers a
payment, a change in the time and form of payment, or both.

 

(c)                                  Any amount payable within the six-month
period after Executive’s separation from service as a “specified employee” (as
defined under Section 409A) of the Company will accumulate without interest and
be paid on the Company’s first regularly scheduled payroll date after the end of
such six-month period or, if earlier, within ten business days after the
appointment of a personal representative or executor of the estate after
Executive’s death.

 

16.                               Counterparts.  This Agreement may be executed,
including execution by facsimile or electronically transmitted signature, in
multiple counterparts, each of which will be deemed an original and all of which
together will be deemed to be one and the same instrument.

 

17.                               Assignment.  The Released Parties may assign
this Agreement at any time, and the Agreement shall inure to the benefit of
their respective successors and assigns.  This Agreement may not otherwise be
assigned, provided that this Agreement shall inure to Executive’s heirs and
estate.

 

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IN WITNESS WHEREOF, each of the arties has caused this Agreement to be duly
executed and delivered under seal, by its authorized officers or individually,
as of the Effective Date.

 

 

 

First Choice ER, LLC

 

 

 

 

 

By:

/s/ Traci Bowen

 

 

Its:

Senior Vice President, Human Resources

 

 

 

 

 

 

 

 

12/15/2016

 

 

Date

 

 

 

 

 

 

 

 

Graham Cherrington

 

 

 

 

 

/s/ Graham Cherrington

 

 

 

 

 

12/15/2016

 

 

Date

 

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