EXHIBIT 10.1
AMENDED AND
RESTATED
SEVERANCE BENEFITS
AGREEMENT
THIS AMENDED AND RESTATED SEVERANCE BENEFITS
AGREEMENT (“Agreement”) is entered into as of the 17th
day of December, 2008 by and between CAREERSTAFF UNLIMITED, INC., a
Delaware corporation (“Employer”) and RICHARD L.
PERANTON (“Employee”) with reference to the following
facts:
A. Employer
is a wholly-owned subsidiary of SHG Services, Inc., a Delaware
corporation that is itself a wholly-owned subsidiary of Sun
Healthcare Group, Inc., a Delaware corporation
(“Parent”, which corporation, is referred to herein,
collectively with its various direct and indirect subsidiaries, as
“Sun”).
B. Employer
and Employee are parties to that certain Severance Benefits
Agreement dated as of November 1, 2004, as amended as of August 22,
2007 (the “Existing Agreement”);
and
C. Employer
and Employee wish to amend and restate the Existing Agreement upon
the terms set forth in this Agreement to comply with Section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”), effective as of the date hereof.
NOW THEREFORE, in consideration of the foregoing
premises and for other good and valuable consideration, Employer
and Employee agree as follows:
I. SEVERANCE
BENEFITS
Employee shall be entitled to the severance
benefits described below upon execution of Employer’s then
standard separation agreement and mutual release (the
“Release”) and delivery of such executed Release to
Employer within 21 days following the effective date of the
Qualifying Termination (as defined in Section II) or Change in
Control (as defined in Section IV), as applicable.
The following cash payments shall be made to
Employee following a Qualifying Termination or a Change in Control,
as applicable (the below provisions do not alter or affect the
legal obligations of Employer to pay Employee upon
a termination of employment that does not constitute a
Qualifying Termination or a Change in Control):
1.
Lump Sum Severance
Payment . In
the event of a Qualifying Termination or a Change in Control,
Employee shall be entitled to a lump sum severance payment in an
amount equal to one hundred percent (100%) of his annual base
salary, at the rate then in effect, less applicable federal and
state tax withholding and any other deductions required by law or
otherwise authorized by Employee, with such amount to be paid to
Employee in the month immediately following the month in which
Employee’s Qualifying Termination or Change in Control
occurs, as applicable.
2.
Earned Salary; Reimbursable
Expenses . In the event
of a Qualifying Termination, Employer shall pay Employee the full
amount of any earned but unpaid salary through the date of such
termination, plus a cash payment (calculated on the basis of
Employee’s salary at the rate then in effect) for all unused
vacation that Employee has earned as of the date of such
termination, together with a cash payment for any unreimbursed
expenses, with such amount to be paid to Employee upon or promptly
following (but in all events within 30 days after) the date of the
Qualifying Termination. Employee agrees to provide
documentation of any such expenses promptly after such expenses are
incurred.
B.
Health Care Coverage
. In the event of a Qualifying
Termination, Employee and Employee’s eligible dependents
shall be entitled to continued coverage under Employer’s
health insurance plans on the same basis as active employees until
the earlier of (1) the last day of the twelfth month to commence on
or after the date of termination; or (2) the date Employee or
Employee’s eligible dependents become eligible to participate
in a plan of a successor employer.
C.
Other Plans
. Except as expressly provided to
the contrary in Section I.B, upon any termination of employment,
including without limitation a Qualifying Termination,
Employee’s right to participate in any retirement or benefits
plans and perquisites shall cease as of the date of
termination.
II.
QUALIFYING TERMINATION .
Employee will have incurred a
Qualifying Termination for purposes of this Agreement if either of
the following events occurs during the term of Employee’s
employment.
A.
Termination by
Employer . Any
termination of Employee’s employment by Employer other than
for “Good Cause” or “Disability” (as each
such term is defined in Section IV, below); or
B.
Termination by
Employee . Employee’s termination of his employment
with Employer for “Good Reason” within one (1) year
after the occurrence of a “Change in Control” (as each
such term is defined in Section IV below).
III.
EFFECT OF NON-QUALIFYING TERMINATIONS .
If Employee’s employment with
Employer terminates for any reason other than a Qualifying
Termination, Employer shall pay Employee the full amount of any
earned but unpaid salary through the date of such termination, plus
a cash payment (calculated on the basis of Employee’s salary
at the rate then in effect) for all unused paid time off which
Employee has earned as of the date of such termination and a cash
payment for any unreimbursed expenses, with such amount to be paid
to Employee upon or promptly following (but in all events within 30
days after) the date of such termination. Employee agrees to
provide documentation of any such expenses promptly after such
expenses are incurred. As of the date of such
termination, Employee shall immediately relinquish the right to any
additional payments of benefits from Employer under this Agreement
or otherwise. Employee’s right to participate in any
retirement or benefits plans and perquisites shall cease as of the
date of termination. Employee and Employee’s eligible
dependents may elect to continue coverage under COBRA of any
health, dental and vision plans in effect at the time.
IV.
DEFINITIONS .
The following capitalized terms shall have the
meanings specified below:
A.
“Good
Cause” shall mean
any one of the following:
(1) Any criminal
conviction of the Employee under the laws of the United States or
any state or other political subdivision thereof which, in the good
faith determination of the Chief Executive Officer of Parent (the
“CEO”), renders Employee unsuitable as an employee or
legal representative of Employer and/or Sun.
(2) Employee’s
continued failure substantially to perform the duties reasonably
requested by the CEO and commensurate with. Employee’s
position and within Employee’s control as President of CSUI
(other than any such failure resulting from Employee’s
incapacity due to Employee’s Disability) after a written
demand for substantial performance is delivered to Employee by the
CEO, which demand specifically identifies the manner in which the
CEO believes that Employee has not substantially performed his
duties, and which performance is not substantially corrected by
Employee within thirty (30) days of receipt of such demand;
and
(3) Any material
workplace misconduct or willful failure by Employee to comply with
Employer’s and Sun’s general policies and procedures as
they may exist from time to time which, in the good faith
determination of the CEO, renders Employee unsuitable as an
employee or legal representative of Employer and/or Sun.
B.
“Change in
Control” shall mean
the occurrence of any one or more of the following
events:
(1) Any
“person” or “group” (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”)), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of more than 33 1/3% of the then
outstanding voting stock of Employer;
(2) A merger or
consolidation of Employer with any other corporation not affiliated
with Employer; and
(3) A sale or other
disposition by Employer of all or substantially all of
Employer’s assets;
provided, however , in no event shall any
acquisition of securities, or a merger or other consolidation
pursuant to a plan of reorganization under chapter 11 of the
Bankruptcy Code with respect to Employer (“Chapter 11
Plan”), or a liquidation under the Bankruptcy Code constitute
a Change in Control. In addition, notwithstanding the above, a
Change in Control shall not be deemed to have occurred in the event
of any transaction undertaken for the purpose of reincorporating
Employer under the laws of another jurisdiction, if such
transaction does not materially affect the beneficial ownership of
Employer’s capital stock. Employee’s continued
employment without objection following a Change in Control shall
not, by itself, constitute consent to or a
waiver of rights with respect to any
circumstances constituting Good Reason hereunder. A Change in
Control shall not, by itself, constitute Good Reason hereunder. A
termination of Employee’s employment with Employer without
Good Cause (other than by reason of Employee’s death or
Disability) within six (6) months preceding a Change in Control
shall be treated as if such termination occurred on the date of
such Change in Control if it is reasonably demonstrated that the
termination was at the request of the third party who has taken
steps reasonably calculated to effect such Change in Control or
otherwise arose in connection with or in anticipation of such
Change in Control.
C.
“Disability” means Employee’s inability to engage in
substantial gainful activity by reason of any medically
determinable mental or physical impairment which can be expected to
result in death or which has lasted or can be expected to last for
a period of 120 substantially consecutive calendar days.
D.
“Good
Reason” means a
resignation of Employee’s employment with Employer (or any
person succeeding t
