MOLINA HEALTHCARE, INC. (NYSE:MOH) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 in the Original Form 8-K to include disclosure of the
terms of the Waiver and Release Agreement entered into with each
of Dr. J. Mario Molina and John C. Molina.
Item 5.02. Departure of Certain Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
The Company filed the Original Form 8-K reporting that, on May 2,
2017 (the Termination Date), the Company terminated the
employment of Dr. J. Mario Molina, the Companys then President
and Chief Executive Officer, and John C. Molina, the Companys
then Chief Financial Officer and Treasurer, without cause by
written notice under the terms of their respective employment
agreements with the Company. In connection with such terminations
and as a condition precedent to the payment of certain severance
benefits, the Company entered into separate Waiver and Release
Agreements with each of Dr. Molina and Mr. Molina which provide
for payment of the severance benefits to which each of Dr. Molina
and Mr. Molina are entitled, respectively, to their respective
employment agreements with the Company. Dr. Molina executed his
Waiver and Release Agreement on June 24, 2017, and Mr. Molina
executed his Waiver and Release Agreement on June 26, 2017.
2017 (the Termination Date), the Company terminated the
employment of Dr. J. Mario Molina, the Companys then President
and Chief Executive Officer, and John C. Molina, the Companys
then Chief Financial Officer and Treasurer, without cause by
written notice under the terms of their respective employment
agreements with the Company. In connection with such terminations
and as a condition precedent to the payment of certain severance
benefits, the Company entered into separate Waiver and Release
Agreements with each of Dr. Molina and Mr. Molina which provide
for payment of the severance benefits to which each of Dr. Molina
and Mr. Molina are entitled, respectively, to their respective
employment agreements with the Company. Dr. Molina executed his
Waiver and Release Agreement on June 24, 2017, and Mr. Molina
executed his Waiver and Release Agreement on June 26, 2017.
J. Mario Molina
The Company and Dr. Molina previously entered into that certain
Second Amended and Restated Employment Agreement dated as of
March 16, 2016 (Dr. Molinas Employment Agreement). to the terms
of Dr. Molinas Employment Agreement and his Waiver and Release
Agreement, Dr. Molina will be entitled to receive as severance:
(a) a cash payment equal to $5,690,000, subject to applicable
withholding, which is the sum of: (i) $5,000,000, representing
the amount equal to 400% of Dr. Molinas base salary of $1,250,000
in effect as of the Termination Date, (ii) $625,000, representing
Dr. Molinas pro rata bonus, and (iii) $65,000, representing
eighteen months of health and welfare benefits (in lieu of any
obligation of Company to continue to provide health and welfare
benefit coverage to Dr. Molina); (b) 50% vesting of Dr. Molina
and the Companys contributions to Dr. Molinas 401(k) account; and
(c) 50% vesting of all outstanding equity compensation previously
granted to Dr. Molina. to Section 6(b)(iii)(A) of Dr. Molinas
Employment Agreement, the cash payment of $5,690,000 described
above is to be paid by the Company in a lump sum payment on the
earlier to occur of (a) November 12, 2017, which is the end of
the ten day period following the expiration of the six month
period commencing on the Termination Date or (b) the date of Dr.
Molinas death.
Second Amended and Restated Employment Agreement dated as of
March 16, 2016 (Dr. Molinas Employment Agreement). to the terms
of Dr. Molinas Employment Agreement and his Waiver and Release
Agreement, Dr. Molina will be entitled to receive as severance:
(a) a cash payment equal to $5,690,000, subject to applicable
withholding, which is the sum of: (i) $5,000,000, representing
the amount equal to 400% of Dr. Molinas base salary of $1,250,000
in effect as of the Termination Date, (ii) $625,000, representing
Dr. Molinas pro rata bonus, and (iii) $65,000, representing
eighteen months of health and welfare benefits (in lieu of any
obligation of Company to continue to provide health and welfare
benefit coverage to Dr. Molina); (b) 50% vesting of Dr. Molina
and the Companys contributions to Dr. Molinas 401(k) account; and
(c) 50% vesting of all outstanding equity compensation previously
granted to Dr. Molina. to Section 6(b)(iii)(A) of Dr. Molinas
Employment Agreement, the cash payment of $5,690,000 described
above is to be paid by the Company in a lump sum payment on the
earlier to occur of (a) November 12, 2017, which is the end of
the ten day period following the expiration of the six month
period commencing on the Termination Date or (b) the date of Dr.
Molinas death.
Dr. Molina and the Company also acknowledged the payment or
future payment to Dr. Molina of certain accrued obligations that
were paid or are payable in accordance with Dr. Molinas
Employment Agreement, including: (a) prior payment of a lump sum
cash amount of
future payment to Dr. Molina of certain accrued obligations that
were paid or are payable in accordance with Dr. Molinas
Employment Agreement, including: (a) prior payment of a lump sum
cash amount of
$259,615.58, subject to applicable withholding, which is the sum
of (i) $57,692.35, representing his accrued but unpaid base
salary as of the Termination Date, (ii) $201,923.23, representing
336 hours of accrued but unused PTO as of the Termination Date,
and (iii) $0, representing his unpaid annual incentive
compensation in respect of the 2016 fiscal year (it being agreed
that all 2016 annual incentive compensation payable to Dr. Molina
was paid by the Company in March 2017); (b) prompt reimbursement
of all reasonable expenses incurred in connection with the
performance of Dr. Molinas duties through the Termination Date,
subject to applicable withholding and in accordance with the
Companys expense reimbursement policies; (c) $5,663,625.62,
representing Dr. Molinas Non-Qualified Deferred Compensation Plan
Account Balance, to be distributed as a lump sum in accordance
with the timing required by the terms of the Non-Qualified
Deferred Compensation Plan and Section 409A of the Internal
Revenue Code of 1986, as amended (the Code); and (d) Executive
Disability Coverage paid through May 26, 2017.
of (i) $57,692.35, representing his accrued but unpaid base
salary as of the Termination Date, (ii) $201,923.23, representing
336 hours of accrued but unused PTO as of the Termination Date,
and (iii) $0, representing his unpaid annual incentive
compensation in respect of the 2016 fiscal year (it being agreed
that all 2016 annual incentive compensation payable to Dr. Molina
was paid by the Company in March 2017); (b) prompt reimbursement
of all reasonable expenses incurred in connection with the
performance of Dr. Molinas duties through the Termination Date,
subject to applicable withholding and in accordance with the
Companys expense reimbursement policies; (c) $5,663,625.62,
representing Dr. Molinas Non-Qualified Deferred Compensation Plan
Account Balance, to be distributed as a lump sum in accordance
with the timing required by the terms of the Non-Qualified
Deferred Compensation Plan and Section 409A of the Internal
Revenue Code of 1986, as amended (the Code); and (d) Executive
Disability Coverage paid through May 26, 2017.
to the Waiver and Release Agreement, Dr. Molina agreed to grant a
general release to the Company and its affiliates and its and
their employees, officers, directors and agents, subject to
certain standard exclusions. Dr. Molina also agreed to be bound
by certain covenants in his Waiver and Release Agreement. The
Waiver and Release Agreement does not affect certain additional
covenants in Dr. Molinas Employment Agreement that survive
termination of his employment with the Company.
general release to the Company and its affiliates and its and
their employees, officers, directors and agents, subject to
certain standard exclusions. Dr. Molina also agreed to be bound
by certain covenants in his Waiver and Release Agreement. The
Waiver and Release Agreement does not affect certain additional
covenants in Dr. Molinas Employment Agreement that survive
termination of his employment with the Company.
John C. Molina
The Company and John C. Molina previously entered into that
certain Second Amended and Restated Employment Agreement dated as
of March 16, 2016 (Mr. Molinas Employment Agreement). to the
terms of Mr. Molinas Employment Agreement and his Waiver and
Release Agreement, Mr. Molina will be entitled to receive as
severance: (a) a cash payment equal to $4,040,000, subject to
applicable withholding, which is the sum of: (i) $3,600,000,
representing the amount equal to 400% of $900,000, which is Mr.
Molinas base salary in effect as of the Termination Date, (ii)
$375,000, representing Mr. Molinas pro rata bonus, and (iii)
$65,000, representing eighteen months of health and welfare
benefits (in lieu of any obligation of Company to continue to
provide health and welfare benefit coverage to Mr. Molina); (b)
50% vesting of Mr. Molina and the Companys contributions to Mr.
Molinas 401(k) account; and (c) 50% vesting of all outstanding
equity compensation previously granted to Mr. Molina. to Section
6(b)(iii)(A) of Mr. Molinas Employment Agreement, the cash
payment of $4,040,000 described above is to be paid by the
Company in a lump sum payment on the earlier to occur of (a)
November 12, 2017, which is the end of the ten day period
following the expiration of the six month period commencing on
the Termination Date or (b) Mr. Molinas death.
certain Second Amended and Restated Employment Agreement dated as
of March 16, 2016 (Mr. Molinas Employment Agreement). to the
terms of Mr. Molinas Employment Agreement and his Waiver and
Release Agreement, Mr. Molina will be entitled to receive as
severance: (a) a cash payment equal to $4,040,000, subject to
applicable withholding, which is the sum of: (i) $3,600,000,
representing the amount equal to 400% of $900,000, which is Mr.
Molinas base salary in effect as of the Termination Date, (ii)
$375,000, representing Mr. Molinas pro rata bonus, and (iii)
$65,000, representing eighteen months of health and welfare
benefits (in lieu of any obligation of Company to continue to
provide health and welfare benefit coverage to Mr. Molina); (b)
50% vesting of Mr. Molina and the Companys contributions to Mr.
Molinas 401(k) account; and (c) 50% vesting of all outstanding
equity compensation previously granted to Mr. Molina. to Section
6(b)(iii)(A) of Mr. Molinas Employment Agreement, the cash
payment of $4,040,000 described above is to be paid by the
Company in a lump sum payment on the earlier to occur of (a)
November 12, 2017, which is the end of the ten day period
following the expiration of the six month period commencing on
the Termination Date or (b) Mr. Molinas death.
Mr. Molina and the Company also acknowledged the payment or
future payment to Mr. Molina of certain accrued obligations that
were paid or are payable in accordance with Mr. Molinas
Employment Agreement, including: (a) prior payment of a lump sum
cash amount of $186,922.94, subject to applicable withholding,
which is the sum of (i) $41,538.43, representing his accrued but
unpaid base salary as of the Termination Date, (ii) $145,384.51,
representing 336 hours of accrued but unused PTO as of the
Termination Date, and (iii) $0, representing his unpaid annual
incentive compensation in respect of the 2016 fiscal year (it
being agreed that all 2016 annual incentive compensation payable
to Mr. Molina was paid by Company in March 2017); (b) prompt
reimbursement of all reasonable expenses incurred in connection
with the performance of Mr. Molinas duties through the
Termination Date, subject to applicable withholding and in
compliance with the Companys expense reimbursement policies; (c)
$485,860.81 representing Mr. Molinas Non-Qualified Deferred
Compensation Plan Account Balance, to be distributed in ten
annual installments in accordance with the timing required by the
terms of the Non-Qualified Deferred Compensation Plan and Section
409A of the Code; and (d) Executive Disability Coverage to be
paid through May 26, 2017.
future payment to Mr. Molina of certain accrued obligations that
were paid or are payable in accordance with Mr. Molinas
Employment Agreement, including: (a) prior payment of a lump sum
cash amount of $186,922.94, subject to applicable withholding,
which is the sum of (i) $41,538.43, representing his accrued but
unpaid base salary as of the Termination Date, (ii) $145,384.51,
representing 336 hours of accrued but unused PTO as of the
Termination Date, and (iii) $0, representing his unpaid annual
incentive compensation in respect of the 2016 fiscal year (it
being agreed that all 2016 annual incentive compensation payable
to Mr. Molina was paid by Company in March 2017); (b) prompt
reimbursement of all reasonable expenses incurred in connection
with the performance of Mr. Molinas duties through the
Termination Date, subject to applicable withholding and in
compliance with the Companys expense reimbursement policies; (c)
$485,860.81 representing Mr. Molinas Non-Qualified Deferred
Compensation Plan Account Balance, to be distributed in ten
annual installments in accordance with the timing required by the
terms of the Non-Qualified Deferred Compensation Plan and Section
409A of the Code; and (d) Executive Disability Coverage to be
paid through May 26, 2017.
to the Waiver and Release Agreement, Mr. Molina agreed to grant a
general release to the Company and its affiliates and its and
their employees, officers, directors and agents, subject to
certain standard exclusions. Mr. Molina also agreed to be bound
by certain covenants in his Waiver and Release Agreement. The
Waiver and Release Agreement does not affect certain additional
covenants in Mr. Molinas Employment Agreement that survive
termination of his employment with the Company.
general release to the Company and its affiliates and its and
their employees, officers, directors and agents, subject to
certain standard exclusions. Mr. Molina also agreed to be bound
by certain covenants in his Waiver and Release Agreement. The
Waiver and Release Agreement does not affect certain additional
covenants in Mr. Molinas Employment Agreement that survive
termination of his employment with the Company.
Dr. Molinas Employment Agreement and Mr. Molinas Employment
Agreement were previously described in, and filed as exhibits to,
the Companys Current Report on Form 8-K filed with the Securities
and Exchange Commission on March 16, 2016.
Agreement were previously described in, and filed as exhibits to,
the Companys Current Report on Form 8-K filed with the Securities
and Exchange Commission on March 16, 2016.
The foregoing descriptions of Dr. Molina and Mr. Molinas Waiver
and Release Agreements do not purport to be complete and are
qualified in their entirety by reference to the full text of
their respective agreements with the Company, which are filed as
Exhibits 10.1 and 10.2, respectively, to this Current Report on
Form 8-K/A and are incorporated herein by reference.
and Release Agreements do not purport to be complete and are
qualified in their entirety by reference to the full text of
their respective agreements with the Company, which are filed as
Exhibits 10.1 and 10.2, respectively, to this Current Report on
Form 8-K/A and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
|
Exhibit
No.
|
Description
|
|
10.1
|
Waiver and Release Agreement, dated June 24, 2017, by
and between J. Mario Molina and Molina Healthcare, Inc. |
|
10.2
|
Waiver and Release Agreement, dated June 26, 2017, by
and between John Molina and Molina Healthcare, Inc. |
MOLINA HEALTHCARE INC ExhibitEX-10.1 2 waiverrelease-drmolinafinal.htm EXHIBIT 10.1 Exhibit Exhibit 10.1WAIVER AND RELEASE AGREEMENTThis Waiver and Release Agreement (“Agreement” and/or “Release”) is made by and between J. Mario Molina (“Executive”),…To view the full exhibit click here About MOLINA HEALTHCARE, INC. (NYSE:MOH)
Molina Healthcare, Inc. offers Medicaid-related solutions for low-income families and individuals, and assists government agencies in their administration of the Medicaid program. The Company operates through three segments: Health Plans, Molina Medicaid Solutions and Other. Its Health Plans segment consists of health plans in approximately 10 states and the Commonwealth of Puerto Rico, and its direct delivery business. Its direct delivery business consists of the operation of primary care clinics in various states in which it operates health plans. Its Molina Medicaid Solutions segment provides design, development, implementation (DDI) and business process outsourcing (BPO) solutions to state governments for their Medicaid management information systems (MMIS). The Other segment includes other businesses, such as its Pathways Health and Community Support LLC (Pathways) behavioral health and social services provider.