EXHIBIT 10.12
CHANGE IN CONTROL AGREEMENT
Agreement, made this ___ day of _________, 2000, by and
between Gentiva Health Services, Inc., a Delaware corporation (the "Company"),
and _________________ (the "Executive").
WHEREAS, the Executive is a key employee of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board")
considers the maintenance of a sound management to be essential to protecting
and enhancing the best interests of the Company and its stockholders and
recognizes that the possibility of a change in control raises uncertainty and
questions among key employees and may result in the departure or distraction of
such key employees to the detriment of the Company and its stockholders; and
WHEREAS, the Board wishes to assure that it will have the
continued dedication of the Executive and the availability of his or her advice
and counsel, notwithstanding the possibility, threat or occurrence of a bid to
take over control of the Company, and to induce the Executive to remain in the
employ of the Company; and
WHEREAS, the Executive is willing to continue to serve the
Company taking into account the provisions of this Agreement;
NOW, THEREFORE, in consideration of the foregoinq, and the
respective covenants and agreements of the parties herein contained, the parties
agree as follows:
1. OPERATION AND TERM OF AGREEMENT. This Agreement shall
commence at the Effective Time of the Merger as contemplated in the Merger
Agreement (defined below) and shall continue through the third anniversary of
such date; PROVIDED, HOWEVER, that after a Change in Control of the Company
during the term of this Agreement, this Agreement shall remain in effect until
all of the obligations of the parties hereunder are satisfied and the Protection
Period has expired. Prior to a Change in Control this Agreement shall
immediately terminate upon termination of the Executive's employment, except in
the case of such termination under circumstances set forth in the last paragraph
of Section 4 below.
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2. CHANGE IN CONTROL; PROTECTION PERIOD. A "Change of
Control" shall be deemed to occur on the date that any of the following events
occur:
(a) any person or persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act (other
than the Company or any subsidiary) shall beneficially own (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, at least 25% of the total
voting power of all classes of capital stock of the Company entitled to vote
generally in the election of the Board;
(b) either (i) Current Directors (as herein defined)
shall cease for any reason to constitute at least a majority of the members of
the Board (for these purposes, a "Current Director" shall mean any member of the
Board as of the date hereof, and any successor of a Current Director whose
election, or nomination for election by the Company's shareholders, was approved
by at least two-thirds of the Current Directors then on the Board) or (ii) at
any meeting of the shareholders of the Company called for the purpose of
electing directors, a majority of the persons nominated by the Board for
election as directors shall fail to be elected;
(c) consummation of (i) a plan of complete liquidation of
the Company, or (ii) a merger or consolidation of the Company (A) in which the
Company is not the continuing or surviving corporation (other than a
consolidation or merger with a wholly owned subsidiary of the Company in which
all shares of Common Stock outstanding immediately prior to the effectiveness
thereof are changed into common stock of the subsidiary) or (B) pursuant to
which the Common Stock is converted into cash, securities or other property,
except a consolidation or merger of the Company in which the holders of the
Common Stock immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the common stock of the continuing or
surviving corporation immediately after such consolidation or merger or in which
the Board immediately prior to the merger or consolidation would, immediately
after the merger or consolidation, constitute a majority of the board of
directors of the continuing or surviving corporation; or
(d) consummation of a sale or other disposition (in one
transaction or a series of transactions) of all or substantially all of the
assets of the Company.
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Notwithstanding the foregoing, the transactions provided for
in the Agreement and Plan of Merger By and Among Adecco SA, Staffing Acquisition
Corporation and Olsten Corporation dated as of August 17, 1999, as amended (the
"Merger Agreement"), shall not constitute a Change in Control for purposes
hereof.
A "Protection Period" shall be the period beginning on the
date of a Change in Control and ending on the third anniversary of the date on
which the Change in Control occurs.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. The
Executive shall be entitled to the benefits provided in Section 4 hereof upon
any termination of his or her employment with the Company within a Protection
Period, except a termination of employment (a) because of his or her death, (b)
because of a "Disability," (c) by the Company for "Cause," or (d) by the
Executive other than for "Good Reason."
(i) DISABILITY. The Executive's employment shall be
deemed to have terminated because of a "Disability" if the Executive
applies for and is determined to be eligible to receive disability
benefits under the Company's Long-Term Disability Plan.
(ii) CAUSE. Termination by the Company of the Executive's
employment for "Cause" shall mean termination upon: (A) the willful and
continued failure by the Executive to substantially perform his or her
duties with the Company, after a written demand for substantial
performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his or her duties; or (B) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise. For
purposes hereof, no act, or failure to act, on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that his
or her action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership
of the Board
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at a meeting of the Board called and held for that purpose (after
reasonable notice to the Executive and an opportunity for the
Executive, together with his or her counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the
Executive engaged in the prohibited conduct set forth above in clauses
(A) or (B) of the first sentence of this subsection and specifying the
particulars thereof in detail.
(iii) WITHOUT CAUSE. The Company may terminate the
employment of the Executive without Cause during a Protection Period
only by giving the Executive written notice of termination to that
effect. In that event, the Executive's employment shall terminate on
the last day of the month in which such notice is given (or such later
date as may be specified in such notice), and the benefits set forth in
Section 4 hereof shall be provided to the Executive.
(iv) GOOD REASON. Termination of employment by the
Executive for "Good Reason" shall mean termination:
(A) if there has occurred a reduction by the Company
in the Executive's base salary in effect on the date hereof,
as increased from time to time thereafter, other than a
reduction in the Executive's base salary of not more than ten
percent which is part of a general salary reduction for a
majority of the salaried employees of the Company and its
subsidiaries;
(B) if without the Executive's written consent, the
Company has required the Executive to be relocated anywhere in
excess of fifty (50) miles from the Executive's office
location on the date hereof, except for required travel on the
business of the Company;
(C) if there has occurred a failure by the Company to
maintain plans providing benefits not materially less
favorable than those provided by any benefit or compensation
plan (including, without limitation, any incentive
compensation plan, bonus plan or program, retirement, pension
or savings plan, stock option plan, restricted stock plan,
life insurance plan, health and dental plan and disability
plan) in
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which the Executive is participating immediately before the
beginning of the Protection Period, or if the Company has
taken any action which would adversely affect the Executive's
participation in or reduce the Executive's benefits (other
than stock option or restricted stock grants) under any of
such plans or deprive the Executive of any material fringe
benefit enjoyed by the Executive immediately before the
beginning of the Protection Period, or if the Company has
failed to provide the Executive with the number of paid
vacation days to which he or she would be entitled in
accordance with the normal vacations policy of the Company as
in effect immediately before the beginning of the Protection
Period; PROVIDED, HOWEVER, that a reduction in benefits under
the Company's tax-qualified retirement, pension or savings
plans or its life insurance plan, health and dental plan,
disability plans or other insurance plans which reduction
applies equally to all participants in the plans and has a DE
MINIMIS effect on the Executive shall -- not constitute "Good
Reason" for termination by the Executive;
(D) the assignment to the Executive of any material
duties inconsistent with his or her status as a senior
executive officer of the Company or a substantial adverse
alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the
Change in Control;
(E) if the Company has failed to obtain the
assumption of the obligations contained in this Agreement by
any successor as contemplated in Section 8(c) hereof; or
(F) if there occurs any purported termination of the
Executive's employment by the Company which is not effected
pursuant to a written notice of termination as described in
subsection (ii) or (iii) above.
The Executive shall exercise his or her right to terminate
employment for Good Reason by giving the Company a written notice of termination
specifying in reasonable detail the circumstances constituting such Good Reason.
In that event, the Executive's employment shall terminate on the last day of the
month in which such notice is given.
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A termination of employment by the Executive within a
Protection Period shall be for Good Reason if one of the occurrences specified
in this subsection (iv) shall have occurred, notwithstanding that the Executive
may have other reasons for terminating employment, including employment by
another employer which the Executive desires to accept.
4. BENEFITS UPON TERMINATION WITHIN PROTECTION PERIOD.
If, within a Protection Period, the Executive's employment by the Company shall
be terminated (a) by the Company other than for Cause or because of the
Executive's death or Disability, or (b) by the Executive for Good Reason, the
Executive shall be entitled to the benefits provided for below (and the
Executive shall not be entitled to severance benefits otherwise payable under
the Executive's separate severance letter agreement with the Company):
(i) The Company shall pay to the Executive through the
date of the Executive's termination of employment salary at the rate
then in effect, together with salary in lieu of vacation accrued to the
date on which his employment terminates, in accordance with the
standard payroll practices of the Company;
(ii) The Company shall pay to the Executive an amount in
cash equal to two times the sum of (A) the Executive's annual base
salary in effect immediately prior to the date of the Executive's
termination of employment or the date of the Change in Control
(whichever is higher), and (B) the higher of (x) the Executive's target
annual bonus for the year that includes the date of the Executive's
termination of employment or (y) the Executive's target annual bonus
for the year that includes the date of the Change in Control; and such
payment shall be made in a lump sum within 10 business days after the
date of such termination of employment;
(iii) The Company shall continue to cover the Executive and
his or her dependents under, or provide the Executive and his or her
dependents with insurance coverage no less favorable than, the
Company's life, disability, health, dental or other emp1oyee welfare
benefit plans or programs (as in effect on the day immediately
preceding the Protection Period or, at the option of the Executive, on
the date of termination of his or her employment) for a period equal to
the lesser of (x) two years following the
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date of termination or (y) until the Executive is provided by another
employer with benefits substantially comparable to the benefits
provided by such plans or programs;
(iv) All options to purchase Company stock granted under
the Company's 1999 Stock Incentive Plan (or other Company plan) held by
the Executive shall become immediately vested and exercisable in full
upon such termination of employment, and all such stock options shall
remain exercisable for one year following such termination of
employment (but not beyond the original full term of the stock option);
and
(v) All of the Executive's benefits accrued under the
pension, retirement, savings and deferred compensation plans of the
Company shall become vested in full; PROVIDED, HOWEVER, that to the
extent such accelerated vesting of benefits cannot be provided under
one or more of such plans consistent with applicable provisions of the
Internal Revenue Code of 1986, as amended, such benefits shall be paid
to the Executive in a lump sum within 10 days after termination of
employment outside the applicable plan.
Anything in this Agreement to the contrary notwithstanding,
the Executive shall be entitled to the benefits described in this Section 4, if
the Executive's employment with the Company is terminated by the Company (other
than for Cause) within one year prior to the date on which a Change in Control
occurs, and it is reasonably demonstrated that such termination (i) was at the
request of a third party who has taken steps reasonably calculated or intended
to effect a Change in Control or (ii) otherwise arose in connection with or
anticipation of a Change in Control.
5. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, practices, policies or programs
provided by the Company or any of its subsidiaries and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements with the
Company or any of its subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, practice, policy
or program of the Company or any of its subsidiaries at or
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subsequent to the date of termination of the Executive's employment shall be
payable in accordance with such plan, practice, policy or program.
6. FULL-SETTLEMENT; LEGAL EXPENSES. The Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement. The Company agrees to pay, upon written demand
therefor by the Executive, all legal fees and expenses which the Executive may
reasonably incur as a result of any dispute or contest by or with the Company or
others regarding the validity or enforceability of, or liability under, any
provision of this Agreement (including as a result of any contest by the
Executive about the amount of any payment hereunder) if the Executive
substantially prevails in the dispute or contest, plus in each case interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Internal
Revenue Code of 1986, as amended (the "Code"). In any such action brought by the
Executive for damages or to enforce any provisions of this Agreement, the
Executive shall be entitled to seek both legal and equitable relief and
remedies, including, without limitation, specific performance of the Company's
obligations hereunder, in his or her sole discretion.
7. EXCISE TAX CUT BACK.
(a) Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment, distribution or
benefit provided (including, without limitation, the acceleration of any
payment, distribution or benefit and the acceleration of exercisability of any
stock option) to the Executive or for his or her benefit (whether paid or
payable or distributed or distributable) pursuant to the terms of this Agreement
or otherwise would be subject, in whole or in part, to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Excise
Tax"), then the amounts payable to the Executive under this Agreement shall be
reduced (by the minimum possible amount) until no amount payable to the
Executive is subject to the Excise Tax; PROVIDED HOWEVER, that no such reduction
shall be made if the net after-tax benefit (after taking into account Federal,
state, local or other income, employment, self-employment and excise taxes) to
which the Executive would otherwise be entitled without such reduction would be
greater than the net after-tax benefit (after taking into account Federal,
state, local or
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other income, employment, self-employment and excise taxes) to the Executive
resulting from the receipt of such payments with such reduction. If, as a result
of subsequent events or conditions, it is determined that payments have been
reduced by more than the minimum amount required under this Section 7, then an
additional payment shall be promptly made to the Executive in an amount equal to
the excess reduction.
(b) All determinations required to be made under this
Section 7, including whether a payment would result in an Excise Tax shall be
made by PricewaterhouseCoopers LLP (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive as
requested by the Company or the Executive. All fees and expenses of the
Accounting Firm shall be borne solely by the Company and shall be paid by the
Company. Except as set forth in the last sentence of Section 7(a) hereof, all
determinations made by the Accounting Firm under this Section 7 shall be final
and binding upon the Company and the Executive.
8. CONFIDENTIAL INFORMATION. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
subsidiaries, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
subsidiaries and which shall not be or become public knowledge (other than by
acts of the Executive or his or her representatives in violation of this
Agreement). After the date of termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
9. SUCCESSORS.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be
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assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives or successor(s) in interest.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to a11 or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.
10. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws therof. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO THE EXECUTIVE:
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IF TO THE COMPANY:
Gentiva Health Services, Inc.
175 Broad Hollow Road
Melville, NY 11747
Attention:
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision thereof.
(f) This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof but,
except as specifically provided in Section 4 hereof, does not supersede or
override the provisions of any stock option, severance letter agreement,
employee benefit or other plan, program, policy or practice in which Executive
is a participant or under which the Executive is a beneficiary; PROVIDED,
HOWEVER, that this Agreement does supersede the Change in Control Agreement
between Olsten Corporation and the Executive dated ______________.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed as of the day and year first above written.
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Name:
GENTIVA HEALTH SERVICES, INC.
By:
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Name:
Title: