Exhibit 10.1
EMPLOYMENT AND NON-COMPETITION
AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION
AGREEMENT (this “Agreement”) is executed on this 19th
day of September, 2006, and will be made effective as of the
Effective Date (as defined below), by and between Addus Healthcare,
Inc., an Illinois corporation (“Corporation”), and W.
Andrew Wright, an individual domiciled in the State of Illinois
(“Executive”).
WITNESSETH:
WHEREAS, Corporation is currently
engaged in the business of providing home care and adult day care
services under both contracts with state and local government
agencies and contracts with private payors (the
“Business”).
WHEREAS, Corporation currently
employs Executive as its President and Chief Executive Officer, 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, in connection with a Stock
Purchase Agreement, dated as of the date hereof (as it may be
amended, restated or otherwise modified from time to time, the
“Purchase Agreement”), among Addus Holding Corporation,
a Delaware corporation, Addus Management Corporation, a Delaware
corporation, Addus Acquisition Corporation, a Delaware corporation,
Corporation, W. Andrew Wright, III, as Sellers’
Representative, and the parties set forth on Exhibit A
thereto, Corporation and Executive have agreed to enter this new
Agreement.
WHEREAS, the parties desire that
upon the closing of the transactions contemplated by the Purchase
Agreement (such date, the “Effective Date”), the terms
of the prior employment relationship 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 and ending on the fifth anniversary of the Effective
Date (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 most 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. Corporation acknowledges that Executive maintains certain
business interests outside of the Business, and Executive’s
continuation of these interests and efforts related thereto shall
not be deemed to be a violation of this Agreement.
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 the
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
Company’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 the Chief Executive Officer
of the Company.
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3. Compensation . Corporation
will pay Executive as follows during the Employment
Term:
(a) Base Salary . Base salary
starting at the rate of $396,000 per annum and shall increase five
percent (5%) annually on the first day of January during the
Employment Term (with such increases commencing January 1,
2007), which shall be paid in accordance with the normal payroll
practices of Corporation and shall be subject to review and
adjustment as hereinafter provided (“Base Salary”).
Corporation shall have the right, in its sole discretion, to not
increase Executive’s Base Salary based upon Executive’s
failure to perform during the preceding year; provided ,
Corporation gives Executive written notice of his failure to
perform which outlines specific failures of non-performance on or
before the 15th day of September of the prior year, and Corporation
gives Executive an opportunity to cure within a reasonable time
said specific failures or non-performance.
(b) Bonus . Executive shall
be further compensated in the form of an annual bonus according to
the terms of a bonus plan for the year beginning January 1,
2007 that the parties will finalize and agree to during
Corporation’s 2007 budgeting process.
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.
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.
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(b) Executive shall be entitled to
(i) eight (8) 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 currently provided to the Executive by Corporation,
and in any event to no less an extent as provided to any other
senior executive 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 which is the
greater of (i) $2,000,000 or (ii) 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. It shall be the Executive’s responsibility to
request, in writing, an increase in the face amount of this policy
whenever the face amount is less than 5 times his base
salary.
(e) A Corporation-provided vehicle
of a similar type, style and cost as Executive is currently
provided.
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 material misuse or
misappropriation of money or other property of Corporation or
habitual use of illegal drugs or intoxicants that causes material
harm to Corporation; or (B) Executive’s conviction for a
felony that has a materially adverse impact on Corporation;
or
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(C) Executive’s willful
engagement in other gross misconduct (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.
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;
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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
(other than the non-renewal by the Corporation of the Employment
Term upon the expiration thereof), 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
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under Paragraph 5 hereof and
(iv) conditioned upon Executive’s 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
