Exhibit 10.16
EXECUTIVE
AGREEMENT
(Severance/Non-Competition)
This Executive Agreement (the
“Agreement”) is made as of July 1, 2004, by and between
Horizon Health Corporation, a Delaware corporation (hereinafter
referred to as “Horizon”), and David K. Meyercord
(hereinafter referred to as “Executive”).
WHEREAS, the Executive has accepted
employment as a Senior Vice President and General Counsel of
Horizon; and
WHEREAS, the Executive and Horizon
have agreed to enter into a severance agreement, in part, for and
in consideration of the agreement of the Executive to a
non-competition agreement on the terms and conditions hereinafter
set forth;
In consideration of the premises and
the mutual terms and conditions hereinafter set forth, Horizon and
the Executive hereby agree as follows:
1. Severance
Agreements . In the event of the termination of employment
of the Executive by Horizon without Cause (as defined in Section 2
hereof) or the termination of employment of the Executive by the
Executive with Good Reason (as defined in Section 3
hereof,
a. Executive shall be entitled to
severance pay in an amount equal to the Executive’s annual
base salary then in effect on the date of termination of employment
plus fifty percent (50%) of the maximum annual cash bonus that the
Executive was eligible to receive with respect to the fiscal year
in which such termination occurs. Such severance amount shall be
payable in twelve (12) equal monthly installments payable on the
first regular payroll payment date of Horizon in the calendar month
after the month in which such termination of employment
occurs.
b. In the event such termination
occurs after a Change of Control, all stock options or other equity
deferred awards granted by the Company to the Executive, all
contributions made by the Company for the account of the Executive
to any pension, thrift or any other benefit plan, and all other
benefits or bonuses (including cash bonuses) which contain vesting
or exercisability provisions conditioned upon or subject to the
continued employment of the Executive, shall become fully vested;
provided, however, that, if any such amount, benefit, or payment
cannot become fully vested pursuant to such plan or arrangement on
account of limitations imposed by law, the Executive shall be
entitled, to the extent permitted by law, to receive from the
Company an amount in cash payable within 30 days of the date of
termination equal to the total amount of benefits or payments which
the Executive will have to forfeit pursuant to such plan or
arrangement on account of such termination of
employment.
c. The Company shall continue the
participation of the Executive on the same basis as extended to
senior executive officers of the Company from time to time in all
life, accident, disability, medical, dental and all other health
plans maintained by the Company for its
1
senior executives for a period of one year
commencing with the calendar month after the month in which such
termination occurs. No severance pay shall be payable to the
Executive in the event of (a) the voluntary termination of
employment by the Executive without Good Reason, (b) the
termination of employment of the Executive by Horizon with Cause or
(c) the termination of employment of the Executive due to death,
disability or retirement.
2. Definition of Cause
. For purposes of this Agreement, the term “Cause”
shall mean: (i) conviction of a crime punishable by imprisonment
under state or federal law; (ii) commission of any act of
dishonesty against Horizon; (iii) willful and material failure to
perform the employment duties by the Executive and the continuation
of such failure for at least ten days after Horizon provides
written notice to the Executive specifying in reasonable detail the
nature of such failure, (iv) failure by the Executive to devote
substantially all his working, time and ability exclusively to the
attention of Horizon; or (v) the failure of the Executive to
exercise diligence to protect the trade secrets and confidential
and proprietary information of Horizon.
3. Definition of Good
Reason . For the purposes of this Agreement, the term
“Good Reason” shall mean:
i. If the Company breaches any
material provision of this Agreement or fails to perform any of its
obligations hereunder, including, without limitation, the failure
to timely pay any amounts due hereunder, and such breach or failure
continues for at least ten days after the Executive provides
written notice to the Company specifying in reasonable detail the
nature of such breach or failure; or
ii. After the occurrence of a Change
of Control, the Executive is required to work at an office location
outside the Dallas/Ft. Worth metropolitan area; or
iii. After the occurrence of a
Change of Control, the Company materially reduces the compensation
of the Executive or assigns to the Executive any duties
inconsistent in any respect with the Executive’s position
(including status, office, title and reporting requirements),
authority or responsibilities or take any other action which
results in a material diminution in such position, authorities,
duties or responsibilities of the Executive.
4. Definition of Change of
Control . For purposes of this Agreement, “Change of
Control” shall mean:
a. The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (an “Acquiring Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote gen
