Exhibit 10.2
AMENDED AND
RESTATED
EMPLOYMENT AND NON-COMPETITION
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETITION AGREEMENT is executed on this 6 th day of May, 2008 (this “ Agreement
”), and will be made effective as of the date hereof (the
“ Effective Date ”), by and between ADDUS
HEALTHCARE, INC. , an Illinois corporation (“
Corporation ”), and Mark S. Heaney, an individual
domiciled in the State of Indiana (“ Executive
”).
WITNESSETH:
WHEREAS , Corporation is currently engaged in the
business of providing professional home care services under both
contracts with state and local government agencies and contracts
with private payors (the “ Business
”).
WHEREAS , Corporation and Executive are party to an
existing Employment and Non-Competition Agreement, dated as of
September 19, 2006 (the “ Original Employment
Agreement ”).
WHEREAS , Corporation and Executive entered into the
Original Employment Agreement, which is amended and restated in its
entirety by this Agreement, and Corporation desires to continue to
employ Executive and Executive desires to continue to be employed
by Corporation, all upon the terms and conditions hereinafter set
forth.
WHEREAS , the parties desire that upon the Effective
Date, the Original Employment Agreement shall automatically
terminate with no further action required by the parties hereto, be
of no further force and effect, and this Agreement shall govern the
relationship between the parties.
NOW, THEREFORE
, in consideration of the mutual
covenants and agreements set forth herein, the parties hereto,
intending to be legally bound, agree as follows:
1. Term of Employment .
Corporation hereby employs Executive, and Executive hereby accepts
employment by Corporation, for the period commencing on the
Effective Date
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and ending September 19, 2011 (hereinafter
called the “ Employment Term ”), subject to
earlier termination as hereinafter set forth in Paragraph 6 or 7.
During the Employment Term, Executive shall (i) devote
substantially all of his business time, loyalty and efforts to
discharge his duties hereunder on a timely basis; (ii) use his
best efforts to loyally and diligently serve the business and
affairs of Corporation; and (iii) endeavor in all respects to
promote, advance and further Corporation’s interests in all
matters.
2. Employment Duties .
Corporation agrees to employ Executive during the Employment Term
as its President and Chief Executive Officer. Executive shall be
subject to the authority of the Board of Directors of Addus Holding
Corporation, a Delaware corporation (the “ Board of
Directors ”) and shall report directly to the Board of
Directors. Executive’s principal duties and responsibilities
shall be to oversee and direct the Corporation’s operations
including the management, marketing and delivery of home care and
adult day care services and the performance of such other executive
duties and responsibilities as may be assigned to him by the Board
of Directors and are consistent with the Executive’s position
as President and Chief Executive Officer of the
Corporation.
3. Compensation . Corporation
will pay Executive as follows during the Employment
Term:
(a) Base salary . Base salary
starting at the rate of $325,000 per annum (“ Base
Salary ”), which shall be paid in accordance with the
normal payroll practices of Corporation and shall be subject to
review and adjustment in the sole discretion of the Board of
Directors.
(b) Bonus . Executive shall
be further compensated according to the Bonus Plan attached as
Exhibit 1 hereto.
4. Expenses . It is
recognized that Executive in the performance of his duties
hereunder may be required to expend sums for travel, entertainment
and lodging. During the Employment Term, Corporation shall
reimburse Executive for reasonable business expenses incurred by
him during the Employment Term in connection with the performance
of his duties hereunder conditioned upon and subject to written
receipt from Executive of an itemized accounting in accordance with
Corporation’s regular business expense verification
practices.
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5. Fringe Benefits . During
the Employment Term, Executive shall be entitled to the following
benefits:
(a) Executive will be eligible to
participate in all employee benefit programs generally available to
senior executive officers of Corporation.
(b) Executive shall be entitled to
(i) four (4) weeks of paid vacation during each calendar
year and (ii) paid holidays in accordance with
Corporation’s established policies.
(c) Executive shall be entitled to
paid disability insurance benefits in the same amount and to the
same extent as provided to the Chairman of the Board or Chief
Financial Officer of the Corporation.
(d) Corporation will provide a
10-Year Level Term Life insurance policy insuring the life of
Executive and providing a minimum death benefit equal to 5 times
the Executive’s base salary, payable to such beneficiaries as
Executive shall designate; provided , that Corporation shall
not be required to spend greater than three percent (3%) of
the Base Salary in purchasing such insurance policy.
The above Paragraph 5(d) shall have
no effect on the Northwestern Mutual Life “65 Whole
Life” insurance plan in place between the Corporation and
Executive as Executive’s retirement plan. Under this plan,
the Corporation pays the annual premium of approximately $27,000,
and the Executive’s W2 is increased by that amount as
additional bonus. Executive shall provide the Corporation with such
assistance as may reasonably be requested for purposes of
determining or verifying the amounts payable pursuant to Paragraph
5(d) hereof (the “ Gross-Up Provision ”),
including furnishing Corporation with copies of his federal, state
and local tax returns for any calendar year during the Employment
Term. If, based on the actual tax liability of Executive in any
calendar year, it is determined that the amount paid to Executive
pursuant to the Gross-Up Provision in any year differs from the
amount to which Executive was entitled hereunder, Executive agrees
to promptly remit to Corporation the amount of any overpayment and
Corporation agrees to promptly pay to Executive the amount of any
deficiency.
(e) A Corporation provided vehicle
of a similar type, style and cost as Executive is currently
provided.
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6. Termination by Corporation
.
(a) Corporation may terminate
Executive’s employment hereunder for reasonable cause. The
term “reasonable cause” shall be limited to the
following:
(i) (A) Executive’s
commission of any act involving the misuse or misappropriation of
money or other property of Corporation or a felony or habitual use
of drugs or intoxicants; or (B) Executive’s willful
engagement in other gross conduct (similar in nature to the
circumstances described in the foregoing clause (A)) which is
materially and demonstrably injurious to Corporation.
(ii) Executive’s
(A) death or (B) disability (by reason of physical or
mental disease, defect, accident or illness) such that Executive is
or, in the opinion of an independent physician retained by
Corporation for purposes of making this determination will be,
unable for an aggregate of one hundred eighty (180) or more
days during any continuous 12-month period to render the services
required of him hereunder (in which event Executive shall be deemed
permanently disabled); or
(iii) Executive’s violation of
any material term or provision of this Agreement including, without
limitation, Paragraph 9 hereof, provided such violation is not
remedied within thirty (30) days after notice thereof to
Executive.
Termination of Executive’s
employment for reasonable cause shall terminate the Employment Term
but shall not affect Executive’s obligation pursuant to
Paragraph 9 hereof, which obligation shall remain in effect for the
period therein provided.
(b) Corporation may terminate
Executive’s employment hereunder for any reason at any time.
Termination of Executive’s employment by Corporation for any
reason (including, without limitation, the non-renewal by the
Corporation of the Employment Term upon the expiration thereof)
other than reasonable cause shall terminate the Employment Term but
shall not affect Corporation’s obligation pursuant to
Paragraph 8 hereof or Executive’s obligation pursuant to
Paragraph 9 hereof.
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7. Termination by Executive .
Executive may terminate his obligations hereunder upon not less
than one hundred and eighty (180) days prior written notice to
Corporation; provided, however, that (a) the Corporation, at
its sole option, may waive all or any portion of such notice
requirement and (b) the Corporation shall waive such notice
requirement for that period for which Executive shall have paid the
Corporation an amount equal to the base salary, prior to
withholding and income taxes, which Executive would otherwise be
entitled to receive for such period. Termination of
Executive’s employment by Executive shall terminate the
Employment Term but shall not affect Executive’s obligation
pursuant to Paragraph 9 hereof.
8. Rights Upon Termination
.
(a) If Executive’s employment
is terminated by Corporation pursuant to Paragraph 6(a)(i),
(ii) or (iii) hereof, Executive shall have no further
rights against Corporation hereunder, except for the right to
receive (i) any unpaid Base Salary under Paragraph 3(a) hereof
with respect to the period prior to the effective date of
termination; (ii) any accrued but unpaid bonus for any period
prior to the effective date of such termination which was earned in
accordance with the terms of Paragraph 3(b) hereof, and
(iii) any accrued but unpaid benefits under Paragraph 5
hereof; provided, however, that if Executive’s employment is
terminated pursuant to Paragraph 6(a)(i) or (iii) hereof, then
Executive shall not be entitled to any unpaid bonus payment
described in clause (ii) above.
(b) If Executive’s employment
is terminated by Corporation pursuant to Paragraph 6(b) hereof,
Executive shall be entitled to, in lieu of any further salary
payments to Executive for periods subsequent to the date of
termination, (i) any unpaid Base Salary under Paragraph 3(a)
hereof with respect to the period prior to the effective date of
termination; (ii) any accrued but unpaid bonus for any period
prior to the effective date of such termination which was earned in
accordance with the terms of Paragraph 3(b), (iii) any accrued
but unpaid benefits under Paragraph 5 hereof and
(iv) conditioned upon Executive’s strict compliance with
the post-employment restrictions described in Paragraph 9 below,
severance pay in the total amount equal to three (3) times
Executive’s annual Base Salary determined at the time of
termination to be paid in equal installments on the
Corporation’s regular pay dates for three (3) years
following termination of Executive’s employment by
Corporation (subject to customary withholding and
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payroll taxes); provided ; however
, that if a Change in Control (as hereafter defined) occurs either
two (2) years prior to or eighteen (18) months following
the termination of Executive’s employment by Corporation
pursuant to Paragraph 6(b), Executive shall be entitled to, in lieu
of the payments to be made pursuant to clause (iv) above, a
lump sum payment equal to (x) three (3) times
Executive’s Annual Cash Compensation (as hereinafter defined)
(subject to customary withholding and payroll taxes), less
(y) any payment already received pursuant to clause
(iv) above. For purposes of this Paragraph, the following
terms shall have the following meanings:
“ Annual Cash
Compensation ” shall mean the sum of (a) the highest
annual Base Salary in effect for the Executive during the
Employment Term and (b) an amount equal to the average bonus
paid to the Executive in the two most recent fiscal
years.
“ Change in Control
” shall be deemed to have occurred if (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities under an
employee benefit plan of Corporation, a corporation owned directly
or indirectly by the stockholders of Corporation in substantially
the same proportions as their ownership of stock of Corporation, or
W. Andrew Wright, his spouse or his descendants, becomes the
“beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of Corporation
representing more than 50% of the total voting power represented by
Corporation’s then outstanding securities which vote
generally in the election of directors (referred to herein as
“ Voting Securities ”); or (ii) after the
date of this Agreement, the stockholders of Corporation approve
(x) a merger or consolidation of Corporation with any other
corporation, other than a merger or consolidation, which would
result in the Voting Securities of Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least more than 50% of the total voting
power represented by the Voting Securities of Corporation or such
surviving entity outstanding immediately after such merger or
consolidation, or (y) a plan of complete liquidation of
Corporation or an agreement for the sale or disposition by
Corporation of (in one transaction or a series of transactions) all
or substantially all of Corporation’s assets.
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(c) If Executive’s employment
is terminated by Executive pursuant to Paragraph 7 hereof,
Executive or his estate shall have no further rights against
Corporation, except for the right to receive, with respect to the
period prior to the effective date of te
