Exhibit 10.55
SEVERANCE COMPENSATION
AND
RESTRICTIVE COVENANT AGREEMENT
THIS SEVERANCE
COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT (the
“Agreement”) is dated as of June 4, 2007 between
MATRIA
HEALTHCARE, INC ., a Delaware corporation (the
“Company”), and THOMAS D.
UNDERWOOD (the
“Executive”).
WHEREAS , the
severance benefits payable by the Company to the Executive as
provided herein are in part intended to ensure that the
Executive receives reasonable compensation given the specific
circumstances of Executive’s employment history with
the Company;
NOW, THEREFORE ,
in consideration of their respective obligations to one
another set forth in this Agreement, and other good and
valuable consideration, the receipt, sufficiency and adequacy
of which the parties hereby acknowledge, the parties to this
Agreement, intending to be legally bound, hereby agree as
follows:
1.
Term
. The term of this Agreement began on June 4, 2007
and shall terminate, except to the extent that any obligation
of the Company hereunder remains unpaid as of such time, upon
the Date of Termination (as hereinafter defined) of the
Executive’s employment with the Company as a result of
the Executive’s death, Disability (as defined in
Section 2(b)) or Retirement (as defined in
Section 2(c)), by the Company for Cause (as defined in
Section 2(d)), or by the Executive other than for Good
Reasons (as defined in Section 2(e)).
2.
Termination of
Employment During the Term .
(a)
General
. The Executive shall be entitled to the
compensation and benefits provided in Section 3 upon the
termination of the Executive’s employment with the
Company by the Executive or by the Company during the term of
this Agreement, unless such termination is as a result of
(i) the Executive’s death; (ii) the
Executive’s Disability; (iii) the
Executive’s Retirement; (iv) the Executive’s
termination by the Company for Cause; or (v) the
Executive’s decision to terminate employment other than
for Good Reason.
(b)
Disability
. The term “Disability” as used in
this Agreement shall mean termination of the
Executive’s employment by the Company as a result of
the Executive’s incapacity due to physical or mental
illness, provided that the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months and such absence
shall
have continued unabated for 30 days after Notice of
Termination as described in Section 2(f) is thereafter given
to the Executive by the Company.
(c)
Retirement
. The term “Retirement” as used in
this Agreement shall mean termination of the
Executive’s employment by the Company based on the
Executive’s having attained age 65 or such later
retirement age as shall have been established pursuant to a
written agreement between the Company and the
Executive.
(d)
Cause
. The term “Cause” for purposes of
this Agreement shall mean (i) the Executive’s failure,
neglect or refusal, as determined by the reasonable judgment
of the Company, to perform the duties of his position, unless
the Executive shall have cured such failure, neglect or
refusal within 30 days of receipt of written notice from the
Company of such failure, neglect or refusal and has not at
any time thereafter repeated such failure or failed to
sustain such cure; (ii) any intentional act by the Executive
that has the effect of injuring the reputation or business of
the Company or any of its affiliates in any material respect;
(iii) the Executive’s continued or repeated absence
from the Company, unless such absence is (x) approved or
excused by the Chief Executive Officer of the Company or (y)
is the result of illness, Disability or incapacity; (iv) the
Executive’s use of illegal drugs or repeated
drunkenness; (v) the Executive’s arrest and/or
conviction for the commission of a felony; or (vi) the
commission by the Executive of an act of fraud, deceit,
material misrepresentation or embezzlement against the
Company or any of its affiliates. For purposes of
this Agreement only, the preparation and filing of
fictitious, false or misleading claims in connection with any
federal, state or other third party medical reimbursement
program, or any other violation of any rule or regulation in
respect of any federal, state or other third party medical
reimbursement program by the Company or any subsidiary of the
Company shall not be deemed to constitute “criminal
fraud” or “civil fraud.”
(e)
Good
Reason . For purposes of this Agreement,
“Good Reason” shall mean (i) a reduction of the
Executive’s base salary; (ii) any failure of the
Company to continue the Executive’s participation in
its applicable Management Incentive Plan or any reduction in
the Executive’s bonus amount as expressed as a
percentage of the Executive’s base salary; (iii)
failure of the Company to continue the Executive’s
participation in any benefit programs except those programs
or arrangements that may be discontinued for all other
similarly situated executives of the Company; or (iv) a
relocation of the Company’s principal executive offices
to a location more than 50 miles outside of Marietta, Georgia
or the relocation of the Executive’s office to any
place other than the Company’s principal executive
offices.
(f)
Notice of
Termination . Any termination of the
Executive’s employment by the Company for a reason
specified in Section 2(b), 2(c) or 2(d) shall be
communicated to the Executive by a Notice of Termination
prior to the effective date of the
termination. For purposes of this Agreement, a
“Notice of Termination” shall mean a written
notice which shall indicate whether such termination is for
the reason set forth in Section 2(b), 2(c) or 2(d) and which
sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the
Executive’s employment under the provision so
indicated. For purposes of this Agreement,
no
termination
of the Executive’s employment by the Company shall
constitute a termination for Disability, Retirement or Cause
unless such termination is preceded by a Notice of
Termination.
(g)
Date of
Termination . For purposes of this
Agreement, “Date of Termination” shall mean
(a) if the Executive’s employment is terminated by
the Company for Disability, 30 days after a Notice of
Termination is given to the Executive (provided that the
Executive shall not have returned to the performance of the
Executive’s duties on a full-time basis during such
30-day period) or (b) if the Executive’s
employment is terminated by the Company or the Executive for
any other reason, the date on which the Executive’s
termination is effective.
3.
Compensation
and Benefits upon Termination of Employment
.
(a) If
the Company shall terminate the Executive’s employment
other than pursuant to Section 2(b), 2(c) or 2(d) and
Section 2(f), or if the Executive shall terminate his or her
employment for Good Reason, then, provided the Executive
shall have executed the Company’s standard general
release (which release shall not obligate the Executive to
release any benefits payable in connection with any
supplemental executive retirement plan or other retiree
benefits), the Company shall pay to the Executive, as
severance compensation and in consideration of the
Executive’s adherence to the terms of Section 4 hereof
and execution of the aforesaid general release, the
following:
(i) On
the Date of Termination, the Company shall become liable to
the Executive for an amount equal to one times the
Executive’s annual base compensation, targeted base
bonus and annual car allowance, which amount shall be payable
over the one year following the Date of Termination on the
regular payroll dates.
(ii) For
a period of one year following the Date of Termination, the
Executive and anyone entitled to claim under or through the
Executive shall be entitled to all benefits under the group
hospitalization plan, health care plan, dental care plan,
life insurance or death benefit plan, or other present or
future similar group employee benefit plan or program of the
Company for which he was eligible at the Date of Termination,
to the same extent as if the Executive had continued to be an
employee of the Company during such period.
(iii) Notwithstanding
any other provision of this Agreement, it is intended that any
payment or benefit provided pursuant to or in connection with
this Agreement that is considered to be nonqualified deferred
compensation subject to Section 409A of the Code shall be
provided and paid in a manner, and at such time and in such
form, as complies with the applicable requirements of Section
409A of the Code. If and to the extent required by
Section 409A of the Code, no payment or benefit shall be made
or provided to a “specified employee” (as defined
below) prior to the six-month anniversary of the
Executive’s separation from service (within the meaning
of Section 409A(a)(2)(A)(i) of the Code). The
amounts provided for in this Agreement that constitute
nonqualified deferred compensation shall be paid as soon as
the six-month deferral period ends
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