Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT
AND NON-COMPETITION
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AND NON-COMPETITION AGREEMENT is executed as of the 27
th day of August, 2007, by and among Addus
HealthCare, Inc., an Illinois corporation (“Company”),
Addus Management Corporation, a Delaware corporation, and Darby
Anderson, an individual domiciled in the State of Illinois
(“Executive”).
WHEREAS, the Company, its subsidiaries and affiliates
(collectively, the “ Addus HealthCare Group ”)
provide home health staffing, home care services, to individuals,
county and state governments, health maintenance organizations,
independent physician associations, insurance companies,
facilities, other business purchasers of such services, and to the
general public at large; and,
WHEREAS, the Addus HealthCare Group is currently engaged
in the business of providing paraprofessional and professional home
care services under contracts with state and local government
agencies and contracts with private payors; and,
WHEREAS, the Executive is currently employed by the
Company as its Regional Vice President, pursuant to an Employment
and Non-Competition Agreement, dated September 18, 2006;
and,
WHEREAS, the Executive will be promoted by the Company to
the Divisional Vice President for Home Care Services, pursuant to
this Amended and Restated Employment and Non-Competition Agreement;
and
WHEREAS, the Executive and the Company are desirous of
memorializing, in writing, all of their agreements with respect to
the Executive’s further employment by the Company;
and,
WHEREAS, by virtue of the Executive’s employment by
the Company pursuant to the terms hereof, the Executive will obtain
and become familiar with certain confidential and proprietary
information relating to the Addus HealthCare Group; and
WHEREAS, the Company desires to protect the goodwill and
all proprietary rights and information of the Addus HealthCare
Group.
NOW, THEREFORE,
in consideration of the mutual
covenants and agreements set forth herein, the parties hereto,
intending to be legally bound, agree as follows:
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1.
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Term of
Employment . The
Company hereby employs the Executive, and the Executive hereby
accepts continued employment by the Company, for the period
commencing as of the date of this Agreement (“
Commencement Date ”) and ending on the fourth
(4 th
) anniversary of the
Commencement Date, or on such earlier date as provided pursuant to
the terms and conditions of this Agreement (the “ Initial
Employment Term ”). At the end of the Initial Employment
Term,
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this Agreement shall automatically
renew for successive one (1) year terms (each, an “
Additional Employment Term ”, and together with the
Initial Employment Term, the “ Employment Term
”) unless the Company provides notice to the Executive of its
intention not to renew this Agreement at least thirty
(30) days prior to the expiration of the Initial Employment
Term or any Additional Employment Term. During the Employment Term,
the Executive shall (i) devote substantially all of his
professional 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 the Addus
HealthCare Group; and (iii) endeavor in all respects to
promote, advance and further the Addus HealthCare Group’s
interests in all matters.
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2.
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Employment Duties . The Company currently employs the Executive as
its Regional Vice President of IHSS for the Midwest and Eastern
Regions. The Executive will be promoted to the Divisional Vice
President for Home Care Services on the Commencement Date. The
Executive’s principal duties and responsibilities shall be
those duties and responsibilities reflected in the employment
description set forth on Exhibit A hereto.
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3.
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Compensation . The Company will pay the Executive as follows
during the Employment Term:
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(a)
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Base
Salary . Commencing
on the date of this Agreement, or sooner if applicable by prior
agreement, the Company shall pay the Executive a base salary at the
rate of One Hundred and Eighty Five Thousand and 00/100 Dollars
($185,000.00) per annum, which shall be paid in accordance with the
normal payroll practices of the Company and shall be subject to
withholding for applicable Federal, State and local taxes.
Thereafter, the Executive’s base salary shall be subject to
review and adjustment by the Board of Directors on or about
January 1, 2009, and annually thereafter for each year during
the Employment Term (as adjusted from time-to-time, the “
Base Salary ”) .
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(b)
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Bonus . The
Executive, at the discretion of the Board of Directors, shall be
eligible (but not entitled) to receive an annual bonus during each
fiscal year in an amount not greater than the amount set forth on
Exhibit B attached hereto, which amount may be amended at the sole
discretion of the Board of Directors. All amounts payable pursuant
to this Section 3(b) shall be paid within no more than thirty
(30) days after completion of the Company’s audited
financial statements for the then current fiscal year and shall be
subject to applicable withholding taxes. Bonus is not salary and is
earned on the day it is paid. To be eligible to receive the bonus,
the Executive must be employed and in good standing and must not
have given notice of termination on or prior to such
date.
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4.
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Expenses
. It is recognized that the
Executive in the performance of his duties hereunder may be
required to expend sums for travel, entertainment and lodging.
During the Employment Term, the Company shall reimburse the
Executive for
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reasonable business expenses
incurred by him during the Employment Term in connection with the
performance of his duties hereunder conditioned upon and subject to
the Company’s established policies and procedures, including
written receipt from the Executive of an itemized accounting in
accordance with the Company’s regular business expense
verification practices.
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5.
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Benefits . During the Employment Term, the Executive
shall be entitled to benefits consistent with benefits paid to
other similarly situated employees pursuant to the Company’s
administrative benefit plan, and in accordance with its policies,
which may change at the sole discretion of the Board of Directions.
Benefits shall be at least:
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(a)
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Four
(4) weeks paid vacation during each year of employment.
Vacation may be carried over to a subsequent year of employment, up
to a maximum of two (2) full years of accrued vacation time
thereafter.
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(b)
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Five
(5) days personal/sick leave per year, with pay. Personal/sick
days may be carried over to a subsequent year of employment, up to
a maximum of two (2) full years of accrued personal/sick
days.
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(c)
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Six Company
holidays, plus two floating holidays.
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(d)
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Coverage under
the Company’s Health Benefit Plan, which may change, at the
sole discretion of the Company’s Board of Directors, from
time to time. The Company will cover the Executive and his
dependents, if any, to the same extent and according to the same
terms as the Company’s other executives are
covered.
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(e)
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Life insurance
policy with a face amount of up to five (5) times the Base
Salary, provided that the Company shall not be required to spend
greater than three percent (3%) of the Base Salary in
purchasing such insurance policy.
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(f)
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Short-term and
long-term disability insurance to the same extent and according to
the same terms as the Company’s other executives are
covered.
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6.
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Termination by Company
.
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(a)
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The Company may
terminate the Executive’s employment hereunder at any time
for reasonable cause. The term “reasonable cause” shall
be limited to the following:
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(i) The Executives dies or the
Executive is physically or mentally disabled
(“Disability”) so that the Executive is or, in the
opinion of an independent physician retained by the Company for
purposes of this determination will be, unable to perform his
duties in a manner satisfactory to the Company for a period of
ninety (90) days out of any one hundred eighty
(180) consecutive-day period (in which event the Executive
shall be deemed permanently disabled);
(ii) A material breach or omission
by the Executive of any of his duties or obligations under this
Agreement (except due to Disability);
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(iii) The Executive shall engage in
any action that materially damages, or that may reasonably be
expected to materially damage, the Company or the business or
goodwill thereof;
(iv) The Executive shall breach his
fiduciary duty to the Company;
(v) The Executive shall commit any
act involving fraud, the misuse or misappropriation of money or
other property of the Company, a felony, habitual use of drugs or
other intoxicants or chronic absenteeism;
(vi) Gross negligence or willful
misconduct by the Executive which is materially injurious to the
Company;
(vii) The Executive shall commit
acts constituting gross insubordination, such as, without
limitation, the intentional disregard of any reasonable directive
of the Company’s CEO or Board of Directors;
(viii) The Executive shall fail to
perform any material duty in a timely and effective manner and
shall fail to cure any such performance deficiency after receipt of
written notice of the deficiency from the Company’s CEO or
Board of Directors, which notice shall designate the period of time
within which the performance deficiency must be cured to the
satisfaction of the Company’s CEO or the Board of Directors,
as applicable, in order to prevent a termination for reasonable
cause; provided, however, that Executive shall only be permitted
the opportunity to cure performance deficiency two times in any
twelve-month rolling period.
Termination of the Executive’s
employment for reasonable cause shall terminate the Employment Term
but shall not affect the Executive’s obligations pursuant to
Paragraph 9 hereof, which obligations shall remain in effect for
the period therein provided.
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(b)
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The Company may
terminate the Executive’s employment hereunder at any time
for any reason other than reasonable cause upon not less than
thirty (30) days prior written notice. If the Company
terminates the Executive’s employment hereunder upon less
than thirty (30) days notice, the Company shall pay the
Executive a pro rata portion of his salary and shall continue to
provide the benefits described in Section 3 and
Section 5, respectively, for the period of deficient
notice.
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7.
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Termination by The
Executive . The
Executive may terminate his obligations hereunder upon not less
than thirty (30) days prior written notice to the Company. If
the Executive terminates his employment hereunder upon less than
thirty (30) days notice, the Executive shall pay the Company a
pro rated portion of his salary and benefits described in
Section 3 and Section 5, respectively, for the period of
deficient notice. The Company (a) at its sole option, may
waive all or any portion
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of such notice requirement and
(b) shall waive all or a portion of such notice requirement
upon the Executive’s payment of that portion of the
Executive’s annual Base Salary that would otherwise be paid
to the Executive during the remaining notice period.
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Termination of the Executive’s
employment by the Executive shall terminate the Employment Term,
but shall not affect the Executive’s obligations pursuant to
Paragraph 9 hereof which obligations shall remain in effect for the
period therein provided.
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8.
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Rights
and Obligations Upon Termination .
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(a)
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If the
Executive’s employment is terminated by the Company pursuant
to Paragraph 6 (a) hereof, the Executive shall have no further
rights against the Company hereunder, except for the right to
receive:
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(i) Any unpaid Base Salary under
Paragraph 3(a) hereof for any period prior to the effective date of
termination;
(ii) Any accrued but unpaid benefits
under Paragraph 5 hereof.
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(b)
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If the
Executive’s employment is terminated by the Company pursuant
to Paragraph 6(b) hereof, the Executive shall be entitled to, in
lieu of any further salary payments to the Executive for periods
subsequent to the date of termination;
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(i) Any unpaid Base Salary under
Paragraph 3(a) hereof for any period prior to the effective date of
termination;
(ii) A pro rata payment for bonus
under Paragraph 3(b) hereof for any period prior to the effective
date of such termination;
(iii) Any accrued but unpaid
benefits under Paragraph 5 hereof;
(iv) Conditioned upon
Executive’s strict compliance with the post-employment
restrictions described in Section 9 below, Severance Pay in
the total amount equal to one (1) times the Executive’s
Annual Cash Compensation (as hereinafter defined) to be paid in
equal installments on the Company’s regular pay dates for one
(1) year following termination of the Executive’s
employment by the Company (subject to customary withholding and
payroll taxes and early termination upon the Executive’s
employment with a new employer), plus continuation of all benefits,
at the level then offered to and enrolled in by the Executive, for
a period equal to one (1) year following the termination of
the Executive’s employment by the Company.
For purposes of this Agreement,
“Annual Cash Compensation” shall mean the sum of
(a) the highest annual Base Salary in effect for
the
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Executive and (b) the greater
of (i) the Executive’s last year’s bonus, if any,
or (ii) the annualized amount of the Executive’s current
year’s bonus; provided however , neither clause
(i) nor (ii) shall exceed fifty percent (50%) of the
Executive’s current annual Base Salary.
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(c)
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If the
Executive’s employment is terminated by the Executive
pursuant to Section 7 hereof, the Executive or his estate
shall have no further rights against the Company, except for the
right to receive, with respect to the period prior to the effective
date of termination;
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(i) Any unpaid Base Salary under
Paragraph 3(a); and
(ii) Any accrued but unpaid benefits
under Paragraph 5 hereof. Such Payments shall be made to the
Executive whether or not the Company chooses to utilize the
services of the Executive for the required notice
period.
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(e)
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The Executive
acknowledges and agrees that, the Company’s obligations to
make payments under Section 8(b) (i) or
(b) (ii) will be conditioned on the Executive timely
executing, delivering and not revoking within the prescribed
revocation period a customary general release in form and substance
satisfactory to the Company.
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9.
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Covenants
of the Executive .
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(a)
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No
Conflicts . The
Executive represents and warrants that he is not personally subject
to any agreement, order or decree, which restricts his acceptance
of this Agreement and performance of his duties with the Company
hereunder.
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(b)
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Non-Competition . During the Employment Term and for a period of
time following the
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