Exhibit 10.1
EXECUTIVE CHANGE OF CONTROL SECURITY AGREEMENT
This Agreement (the "Agreement") is made by and between Almost
Family,
Inc., a Delaware
corporation with its principal offices in Louisville,
Kentucky (the "Company") and Mary A Yarmuth ("Executive") and is effective
as of September 30, 2005 (the "Effective Date").
Recitals
A. The
Company and certain of its affiliates have entered into a
Purchase
Agreement dated August 1, 2005 with Active Service Corporation and
five
of its subsidiaries (together referred to herein as "Active"), to
sell
substantially all assets related to its adult day care services
(the
"Transaction"), the division of the Company for which the Executive
has
worked.
B. In
connection with the Transaction, Executive's position in the
Company
is likely to be eliminated, and she may not be offered an
acceptable
long-term employment opportunity with Active.
C.
Executive's services through the date of closing of the
Transaction, as
more clearly defined in the Purchase Agreement (the "Closing Date")
are
considered integral to the successful closing of the Transaction,
and
in consideration of her agreement to use her best efforts to assist
in
the consummation of the Transaction, despite its probable impact on
her
job prospects, and for valuable past services, the Company wishes
to
enter into this Agreement providing certain enhanced
compensation.
Agreements
NOW, THEREFORE, to assure the Company that it will have the
continued
dedication of Executive and the availability of her advice and
counsel
notwithstanding the probable change in control of the division of
the Company
for which she works, and to induce Executive to remain in the
employ of the
Company through the Closing Date, and for other good and valuable
consideration,
Company and Executive hereby agree as follows:
1. Term. This Agreement shall be in effect from the Effective Date
of
this Agreement and shall terminate on June 30, 2006 (the "Term"),
except to the
extent provided in Section 11.3. This Agreement shall apply only to
termination
of employment of the Executive during the Term, or, with respect to
the
Transaction Bonus set forth in Section 2 below, only if the
Transaction closing
occurs during the Term.
2. Transaction Bonus. If, and only if, the Executive remains
employed
with the Company as of the Closing Date, and the Closing Date
occurs during the
Term, Executive will be paid a bonus on that date of $50,000, less
tax and other
withholdings as required by law or prior Executive election.
<PAGE>
3. Separation Pay and Benefits.
3.1 If (i) the Executive's employment is terminated on or
within 90 days after the Closing Date, and (ii) the Closing Date
occurs during
the Term, and (iii) Executive agrees on the date of termination not
to file any
administrative charge or lawsuit relating to Executive's prior
employment with
Company and releases Company and all of its then current and former
directors,
trustees, officers, employees, agents, members, and affiliated
companies, from
any and all claims, on a Release substantially in the form attached
hereto an
Annex A, which Release is not revoked in accordance with its terms,
then
Executive will be paid $323,044 (the "Separation Pay"), at the time
and manner
set forth in Section 3.3, and subject to reduction or re-payment in
accordance
with Sections 4 and 5.
3.2 In addition to the Separation Pay, Executive will be paid
any unpaid salary which has already been earned by Executive, and
provided all
benefits to which she has already become vested before termination
of
employment, and which are payable upon such termination of
employment under the
terms and practices of the plans or arrangements under which such
benefits are
provided, including payment of any accrued and vested vacation days
not yet used
as of the date of termination, and health care coverage
continuation rights in
accordance with the Consolidated Omnibus Reconciliation Act of 1985
(COBRA).
3.3 The Separation Pay shall be payable in a single lump sum
payment, less tax and other withholdings as required by law or
prior Executive
election, on the 8th day following Executive's execution of the
Release,
provided Executive has not revoked it at that date. Executive
acknowledges and
agrees that she is entitled to no other bonus, incentive or
separation pay from
the Company and has been paid all wages due prior to the Effective
Date hereof.
4. Reduction of Amounts Payable Under Tax Code Parachute Rules. In
no
event shall any amount payable under any provision of this
Agreement equal or
exceed an amount which would cause Company to forfeit, pursuant to
Section
280G(a) of the Internal Revenue Code of 1986, as amended, its
deduction for any
or all such amounts payable. Pursuant to this Section 4, the
Company shall
reduce the Separation Pay, if such benefits alone or in conjunction
with
benefits provided under other Company plans or agreements between
Executive and
Company which are deemed paid in connection with a change in
control, would
cause Company to forfeit otherwise deductible payments; provided,
however that
no benefits payable under this Agreement shall be reduced pursuant
to this
Section 4 to less than $1.00 below the amount of benefits which
Company can
properly deduct under Section 280G(a) of the Internal Revenue Code
of 1986, as
amended. If, subsequent to the payment to the Executive of payments
pursuant to
this Section 4, the Company reasonably determines that the amount
of the
payments paid pursuant to this Section 4 are greater than, or less
than, the
amount required to have been paid, the Executive shall reimburse
the Company an
amount, or the Company shall pay to the Executive an additional
amount,
respectively, based upon such determination.
5. Return of Separation Pay if Employed. If Executive is
re-employed by
the Company or an affiliate thereof or is or continues to be
employed by Active
or an affiliate thereof on or after 90 days following the Closing
Date (the 90
days referred to herein as the "Transition Period") and before 27
months
following the Closing Date, Executive shall return to the Company a
portion of
the Separation Pay, determined by a fraction, the numerator of
which is 24 minus
the number of whole or partial months that have elapsed as of the
date of such
<PAGE>
employment (or in the case of continued employment beyond
Transition Period, the
date of the Transition Period ends) from and after the end of the
Transition
Period, and the denominator of which is 24. For example, if
Executive accepts
employment with Active that continues on the 91st day after the
Closing Date,
she will be required to return to the Company 100% of the
Separation Pay. If she
were to accept employment with Active 6 months following the
Transition Period,
she would be obligated to return $242,283 ([24-6] / 24 = 75% x
323,044 =
$242,283). For purposes of this Separation Pay return commitment,
Executive
shall be deemed employed by the Company or Active or their
affiliates, if
Executive individually, in partnership or through a corporation, as
proprietor,
manager, executive, or consultant, performs personal services in
exchange for
fees, payments, wages or salary of any kind, whether payable as the
work is
performed, in advance, or on a deferred basis.
6. Non-Compete, Non-Solicitation, Cooperation With Litigation,
Non-Disparagement, and Confidential Information Covenants.
6.1. Covenant Not-to-Compete. Executive,
during and following termination
of employment with Company, shall not compete with Company or
assist others to
so compete. Except as otherwise stated herein, this covenant
not-to-compete
shall be limited to: (1) a period of two years following such
termination; (2)
the home health care field(s) in which Company is, at the time of
said
termination, actively engaged; and (3) those states in which
Company, at the
time of said termination, is actually engaged in the home health
care business.
Further, this Covenant shall end upon the consummation of a change
in control of
Company, and for this purpose a change in control occurs if:
(A)
any "person" (as such
term is used
in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934
[the "Exchange Act"], an "Acquiring Person"), other than any
employee
benefit plan maintained by the Company for the exclusive benefit of
the
Company's employees, becomes the "beneficial owner" (as such term
is
defined in Rule 13d-3 promulgated under the Exchange Act), directly
or
indirectly, of securities of the Company representing 50% or more
of
the combined voting power of the Company's then outstanding
securities;
or
(B) the Company's stockholders approve an
agreement to merge or consolidate the Company with another
corporation
(other than a corporation 50% or more of which is controlled by, or
is
under common control with, the Company).
6.2 Non-Solicitation Covenants. Executive agrees that, during
Executive's employment and for a period of two years after
Executive's
termination of employment with Company for any reason whatsoever,
Executive
shall not, without the express written consent of Company, directly
or
indirectly,
6.2.1
solicit directly on behalf of herself or a
subsequent employer or
as agent for another, the business enjoyed by the
Company with or from any person or business that is a customer,
clearly
specified prospective customer, or referral source of Company at
the date of
Executive's termination of employment; or
<PAGE>
6.2.2
approach or solicit
any person who was
employed at the Company as of the date of Executive's termination
with a view to
hiring such employee, persuading such employee to leave the
employment of
Company, or actually hire an employee of the Company for any other
entity.
6.3 Cooperation With Litigation. Executive agrees to cooperate
with Company, during Executive's employment and thereafter
(including after
Executive's termination of employment hereunder for any reason,
whether or not
any benefits are triggered hereunder, by making herself reasonably
available to
testify on behalf of Company or any affiliated company in any
action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative, and to
assist Company or any affiliated company in any such action, suit,
or proceeding
by providing information to and meeting and consulting with
Company, any
affiliated company, or any of their counsel or representatives upon
reasonable
request, provided that such cooperation and assistance shall not
materially
interfere with Executive's then current professional activities and
that Company
shall agree to reimburse Executive for all reasonable out-of-pocket
expenses
including, without limitation, attorneys' fees and compensation for
unpaid
time-off from a current employer, incurred by Executive in
connection with
providing such cooperation and assistance.
6.4 Company's Confidential Information. Executive acknowledges
and agrees that she has had and will have during the term of her
employment with
Company, access to trade secrets and other confidential information
unique to
Company's business and that the disclosure or unauthorized use of
such trade
secrets or confidential information by Executive will injure
Company's business.
Therefore, Executive agrees that Executive has not and shall not,
at any time
during or after the termination of Executive's employment, use,
reveal or
divulge any Trade Secrets (as defined under applicable state law).
Executive
further agrees that Executive shall not, during her employment or
for a period
of five years thereafter, use, reveal or divulge any other
confidential
information, including customer information, financial information,
business
plans, pricing information, technical or scientific data, or other
information
which Company deems to be confidential and/or commercially
sensitive.
6.5 Confidential Nature of This Agreement. The terms of this
Agreement shall be held in strict confidence by Executive, and the
existence of
this Agreement or its terms shall not be disclosed by Executive to
anyone
(including but not limited to any employee of Company or any
affiliated company)
during the term of Executive's employment or at any time thereafter
except to
the extent that express written authorization of Company's Senior
Vice
President-Administration or Senior vice President-Chief Financial
Officer for
such disclosure is received or that such disclosure has already
been made by
Company in public documents prepared by Company. In addition,
notwithstanding
the foregoing, Executive may disclose the existence of this
Agreement and its
terms to Executive's spouse, legal counsel, or financial advisors
(provided that
Executive shall obtain any such person's agreement to hold the
terms of this
Agreement in the same confidence as applies to Executive before
Executive
discloses any of the terms of the Agreement to such person).
6.6 Non-Disparagement. Executive shall not, during Executive's
employment or at any time within 5 years thereafter, disparage or
act in any
manner, directly or indirect
