Exhibit 10.1
AMENDED AND
RESTATED
SEVERANCE AND NONCOMPETITION
AGREEMENT
This SEVERANCE AND NONCOMPETITION
AGREEMENT (“ Agreement ”), originally made as of
June 29, 2006 by and between National Mentor
Holdings, Inc., a Delaware corporation, (the “
Company ”), and [NAME] (“
Executive ”), is hereby amended and restated dated
December 31, 2008 and effective January 1,
2009.
WHEREAS, an Agreement and Plan of
Merger (the “ Merger Agreement ”) was previously
entered into by and among NMH Holdings, LLC, a Delaware limited
liability company (“ Parent ”), NMH
Mergersub, Inc. a Delaware corporation wholly owned by Parent,
and National Mentor Holdings, Inc., a Delaware corporation,
pursuant to which the Company became a wholly owned subsidiary of
Parent;
WHEREAS, obtaining the
Executive’s promise to be bound by the restrictive covenants
set forth in this Agreement was a significant factor in the
decision of the Parent to enter into the Merger Agreement, and in
connection therewith the restrictive covenants set forth in
Section 3 of this Agreement are necessary to protect the
Parent’s and the Company’s legitimate business
interests;
WHEREAS, as consideration to induce
the Executive to comply with the restrictive covenants set forth in
this Agreement, the Company shall continue to employ Executive as
an at-will employee and provide the severance payments described in
this Agreement; and
WHEREAS , the parties hereto
have agreed that it is mutually beneficial to amend and restate the
Agreement effective January 1, 2009 to comply with the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”);
NOW THEREFORE, in consideration of
the foregoing, and of mutual covenants and agreements hereinafter
set forth, and intending to be legally bound, the parties hereto
hereby agree as follows:
1.
Effective Date of Agreement
. This Agreement became effective as of the closing of the
transactions contemplated under the Merger Agreement, at the
Effective Time (the “ Effective Date ”), and
shall remain in effect until terminated pursuant to Section 2,
below; provided , however , that the restrictive
covenants contained in Section 3 below and all other
provisions contained in this Agreement which by their terms survive
any termination of this Agreement shall remain in full force and
effect thereafter.
2.
Termination
.
a.
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
(i) “
Cause ” shall mean: (A) the commission by
the Executive of an act of fraud or embezzlement, (B) the
indictment or conviction of the Executive for (x) a felony or
(y) a crime involving moral turpitude or a plea by Executive
of guilty or nolo contendere involving such a crime (to the extent
it gives rise to an adverse effect on the business or reputation of
the Company or any of its subsidiaries), (C) the willful
misconduct by the Executive in the performance of Executive’s
duties, including any willful misrepresentation or willful
concealment by Executive on any report submitted to the Company (or
any of its securityholders or subsidiaries) which is not of a de
minimis nature, (D) the violation by Executive of a written
Company policy regarding substance abuse, sexual harassment or
discrimination policies or any other material written policy of the
Company regarding employment, (E) the willful failure of the
Executive to render services to the Company or any of its
subsidiaries in accordance with Executive’s employment which
failure amounts to a material neglect of the Executive’s
duties to the Company or any of its subsidiaries, (F) the
repeated failure of the Executive to comply with reasonable
directives of the Board of Directors of the Company or the Chief
Executive Officer of the Company consistent with the
Executive’s duties or (G) the material breach by
Executive of any of the provisions of any agreement between
Executive, on the one hand, and the Company or a securityholder or
an affiliate of the Company, on the other hand.
Notwithstanding the foregoing, with respect to clauses (C), (D),
(E), (F) and (G) above, Executive’s termination of
employment with the Company shall not be deemed to have been
terminated for Cause unless and until (X) Executive has been
provided written notice of the Company’s intention to
terminate his employment for Cause and the specific facts relied
on, (Y) Executive has been provided ten (10) business
days from the receipt of such notice to cure any such conduct or
omission giving rise to a termination for Cause, and
(Z) Executive does not cure any such conduct or omission
within such ten business-day period.
(ii) “
Code ” shall mean the Internal Revenue Code of 1986,
as amended.
(iii) “
Disability ” shall mean the inability of the Executive
to perform the essential functions of Executive’s job, with
or without reasonable accommodation, by reason of a physical or
mental infirmity, for a continuous period of six months. The
period of six months shall be deemed continuous unless Executive
returns to work for at least 30 consecutive business days during
such period and performs during such period at the level and
competence that existed prior to the beginning of the six-month
period. The date of such Disability shall be on the first day
of such six-month period.
(iv) “ Severance
Termination ” shall mean the termination of
Executive’s employment by the Company without Cause (other
than by reason of death or Disability) or the Executive’s
termination of the employment relationship for Good
Reason.
(v) “ Good
Reason ” shall mean (A) a change by the Company or
NMH in Executive’s duties and responsibilities which is
materially inconsistent with Executive’s position in the
Company or in NMH, (B) a material reduction in
Executive’s annual base salary or annual bonus opportunity,
provided that any reduction of up to ten percent (10%) of
Officer’s salary or bonus opportunity (in effect on
June 29, 2006)
that is part of a plan to reduce compensation of comparably
situated employees of Company generally shall not be considered a
“material reduction in Officer’s annual base salary or
annual bonus opportunity” hereunder, (C) a
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material breach by the Company of the employment agreement, if any,
between Executive and the Company or one of its subsidiaries or
(D) the relocation of the Executive’s principal place of
work from its current location to a location that is beyond a
50-mile radius of such current location.
Notwithstanding anything to the contrary in the foregoing,
Executive shall only have “Good Reason” to terminate
employment if Executive gives notice, in writing, to the Company of
the act or omission which is alleged to constitute “Good
Reason” within ninety (90) days of the initial occurrence
thereof, and Company fails to remedy such act or omission within
thirty (30) days following Company’s receipt of written
notice from Executive specifying such act or omission.
b.
Executive’s employment may be terminated by the Company with
or without Cause or any other reason at any time upon written
notice to Executive (in accordance with the notice procedures of
Section 8 and, in the event of a termination with Cause, in a
manner consistent with Section 2(a)(i)); provided ,
that if such termination is by reason of Disability, such notice
shall set forth in reasonable detail the facts and circumstances
alleged to provide a basis for such termination. Executive
may terminate his or her employment at any time with or without
Good Reason or any other reason upon thirty (30) days advance
written notice to the Company (in accordance with the notice
procedures of Section 8). Executive’s employment
hereunder shall automatically terminate upon the Executive’s
death.
c.
With respect to any termination of Executive’s employment
hereunder, Executive shall be entitled to receive any unpaid
portion of his base salary, and any unused vacation days accrued
through the date of termination (which shall be paid in accordance
with the Company’s normal payroll practices, but in no event
later than 90 days following the Executive’s termination),
together with such other Company benefits, if any, accrued through
the date of termination in accordance with the applicable terms of
the Company benefit plans.
d.
In the event of a Severance Termination, subject to
Section 2(e) and to Executive’s continued
compliance with the provisions of Section 3, the Company
shall:
(i)
Continue to pay Executive’s base salary (at a rate in effect
as of the date of the Severance Termination), in accordance with
the Company’s regular payroll practices, for a period of
twelve months. Such payments shall begin on the payroll date
next following Executive’s Severance Termination;
(ii)
Pay Executive an amount equal to the Executive’s annual cash
bonus earned by Executive in respect of the year prior to the year
in which such Severance Termination occurs. Such amount will
be payable in equal installments over a period of twelve months in
accordance with the Company’s regular payroll practices. Such
payments shall begin on the payroll date next following
Executive’s Severance Termination; and
(iii) For the
one-year period beginning on the Executive’s Severance
Termination, permit the Executive to elect to participate, subject
to Executive’s continued payment to the Company of the
“active employee” portion of the plan premiums during
such period, in any health, medical and welfare benefit
plans(s) maintained by the Company from time to time for the
Company’s similarly situated active employees,
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provided that (i) Executive was participating in such plans at
the time of Executive’s Severance Termination, (ii) such
plan(s) permit continued participation by terminated employees
and (iii) with respect to any such plan subject to
Consolidated Omnibus Budget Reconciliation Act of 1986
(“COBRA”), such coverage is co-extensive with COBRA and
Executive makes a valid election of continuation coverage under
COBRA.
e.
Any termination of employment triggering payment of benefits under
this Agreement must constitute a “separation from
service” within the meaning of Treas. Reg.
§ 1.409A-1(h) before distribution of such benefits
can commence. For purposes of clarification, this paragraph
shall not cause any forfeiture of benefits on the part of the
Executive, but shall only act as a delay until such time as a
separation from service occurs.
f.
Upon any termination of Executive’s employment hereunder,
Executive shall execute and deliver to the Company a general
release in form and substance reasonably satisfactory to the
Company releasing the Parent, the Company, its directors, officers,
agents and Executives of any form of liability, obligation, claim
or cause of action relating to Executive’s employment by the
Company. Such executed release must be received by the
Company no later than sixty (60) days following the date of the
Executive’s “separation from service” as
described above. If such release is not received by such
time, all severance payments set forth herein shall by irrevocably
forfeited by the Executive.
g.
If any amount to be paid to Executive pursuant to this Agreement as
a result of Executive’s termination of employment is
“deferred compensation” subject to Section 409A of
the Code and the rules and regulations thereunder and if the
Executive is a “Specified Employee” (as defined under
Section 409A of the Code) as of the date of Executive’s
termination of employment hereunder, then, to the extent necessary
to avoid the imposition of excise taxes or other penalties under
Section 409A of the Code, the payment of benefits, if any,
scheduled to be paid by the Company to Executive hereunder during
the first six (6) month period following the date of a
termination of employment hereunder shall not be paid until the
date which is the first business day following the six-month
anniversary of Executive’s termination of employment for any
reason other than death. Any deferred compensation payments
delayed in accordance with the terms of this paragraph shall be
paid in a lump sum when paid.
3.
Restrictive Covenants
.
a.
Confidentiality
.
(i) Executive
will not at any time (whether during or after Executive’s
employment with the Company), other than in the ordinary course of
performing services for the Company, (x) retain or use for the
benefit, purposes or account of Executive or any other person,
firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise whatsoever
(“Person”); or (y) disclose, divulge, reveal,
communicate, share, transfer or provide access to any Person
outside the Company (other than its professional advisers who are
bound by confidentiality obligations), any non-public, proprietary
or confidential information obtained by Executive in connection
with the commencement of Executive’s employment with the
Company or at any time thereafter during the course of
Executive’s employment with the Company — including
without limitation trade secrets, know-how, research and
development,
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software, databases, inventions, processes, formulae, technology,
designs and other intellectual property, information concerning
finances, investments, profits, pricing, costs, products, services,
vendors, customers, clients, partners, investors, personnel,
compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals
— concerning the past, current or future business, activities
and operations of the Company and/or any third party that has
disclosed or provided any of the same to the Company on a
confidential basis (provided that with respect to such third party
Executive knows or reasonably should have known that the third
party provided it to the Company on a confidential basis)
(“Confidential Information”) without the prior written
authorization of the Board of Directors of the Company; provided,
however, that in any event Executive shall be permitted to disclose
any Confidential Information reasonably necessary (i) to
perform Executive’s duties while employed with the Company or
(ii) in connection with any litigation or arbitration
involving this or any other agreement entered into between
Executive and the Company before, on or after the date of this
Agreement in connection with any action or proceeding in respect
thereof.
(ii)
“Confidential Information” shall not include any
information that is (A) generally known to the industry or the
public other than as a result of Executive’s breach of this
covenant or any breach of other confidentiality obligations by
third parties to the extent the Executive knows or reasonably
should have known of such breach by such third parties;
(B) made legitimately available to Executive by a third party
(unless Executive knows or reasonably should have known that such
third party has breached any confidentiality obligation); or
(C) required by law or by any court, arbitrator, mediator or
administrative or legislative body (includi
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