Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(b) On November 11, 2019, Magellan Health, Inc. (the “Company”) announced that Daniel N. Gregoire, Executive Vice President, General Counsel and Secretary of the Company, intends to retire, transition his employment, and resign from his current position, effective as of December 31, 2019 (the “Transition Date”). Mr. Gregoire will continue to serve as an employee with a title of Senior Vice President, Special Counsel of the Company and will perform transition services, on a part-time basis for the period commencing on January 1, 2020 and ending on March 31, 2020 unless earlier terminated in accordance with the agreement described further below. We thank Mr. Gregoire for his many years of service to the Company and its shareholders.
(e)
Transition and Retirement Agreement with Mr. Gregoire
On November11, 2019, the Company entered into a Transition and Retirement Agreement with Mr. Gregoire (the “Agreement”), pursuant to which, for the period commencing on January 1, 2020 and ending on March 31, 2020, unless earlier terminated in accordance with the Agreement (the “Term”), Mr. Gregoire shall continue to serve as an employee with the title of Senior Vice President, Special Counsel of the Company and provide such services as reasonably requested by the Company on a part-time basis.
Mr. Gregoire’s base salary will be $10,000 per month, and he will retain eligibility to receive his 2019 annual bonus with a target of 65% of his current 2019 base salary based upon and subject to the achievement by the Company of the applicable performance goals as determined by the Company’s Board of Directors (the “Board”). During the Term, Mr. Gregoire shall not be eligible to receive an annual bonus for the 2020 fiscal year. During the Term, Mr. Gregoire shall be entitled to continue to participate in the Company’s health and welfare benefit plans (excluding severance plans or policies), or, alternatively, to receive a cash payment equal to an amount that, after all applicable taxes are paid, is equal to the amount of the employee portion of the monthly COBRA premiums incurred by Mr. Gregoire. Mr. Gregoire shall be deemed to have retired for purposes of the Company’s Retirement Policy Applicable to Employee Long-Term Incentive Awards (the “Retirement Policy”) if (i) he remains employed through March 31, 2020 or (ii) his employment is terminated by the Company without Cause, by Mr. Gregoire following a material breach of the Agreement by the Company, or due to his death prior to March 31, 2020.
If Mr. Gregoire is terminated for “Cause” or he resigns for any reason other than material breach by the Company of the Agreement during the Term , Mr. Gregoire will be entitled to receive solely (i) base salary earned but unpaid through the termination date, (ii) reimbursement of expenses incurred by Mr. Gregoire through the termination date which are reimbursable pursuant to the Company’s reimbursement policy and (iii) Mr. Gregoire’s vested portion of any Company deferred compensation or other benefit plan and other benefits mandated by law ((i) through (iii), “Accrued Rights”).
In the event the Company terminates Mr. Gregoire’s employment without “Cause”, Mr. Gregoire terminates the Agreement following a material breach by the Company, or the death of Mr. Gregoire at any time during the Term, Mr. Gregoire (or his estate) shall be entitled to receive the Accrued Rights and, subject to Mr. Gregoire’s (or his estate’s) execution, delivery and non-revocation of a release of claims, payment of the above mentioned base salary for the remainder of the Term, 2019 annual bonus if not yet paid, health benefits and retirement benefits.
The foregoing description of the Agreement is qualified in its entirety by reference to the complete text of the Agreement, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K.