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Exhibit 10.24
AMENDMENT TO
SALARY CONTINUATION AGREEMENT
KEVIN SHAW ("EMPLOYEE")
THIS Amendment to the Salary Continuation Agreement ("Agreement") is
made as of this 21 day of August, 2001 by and between NCS HealthCare, Inc., an
Ohio corporation (hereinafter referred to as the "Company"), and the above named
Employee.
WHEREAS, the Board of Directors of the Company (the "Board") previously
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Employee,
notwithstanding the possibility, threat, or occurrence of a Change of Control of
the Company; and
WHEREAS, the Board believes it is imperative to provide the Employee
with compensation arrangements upon a Change of Control which provide the
Employee with individual financial security and which are competitive with those
of other corporations; and
WHEREAS, in order to accomplish these objectives, the Board caused the
Company to enter into the Agreement with the Employee dated as of the 29 day of
September, 2000; and
WHEREAS, the Board believes that in order to assure the Employee's full
attention and dedication to the Company currently and in the event of any change
of control which would involve the bankruptcy or insolvency of the Company, it
is necessary to amend certain provisions of the Agreement, including extending
the term of the compensation arrangements and amending the definition of Change
of Control.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
1. Section 1.2 shall be amended by the addition of the following
new Section 1.2(d):
(d) The adjudication of the Company as a debtor or the
Company having entered against it an order for relief
under Title 11 of the United States Code, as the same
may be amended from time to time; the Company's
filing of a voluntary petition in bankruptcy or the
Company's filing of a petition or an answer seeking
reorganization or an arrangement with creditors or
seeking to take advantage of any other law (whether
federal or state) relating to relief of debtors, or
the
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Company's admission (by answer, by default or
otherwise) the material allegations of a petition
filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or
state) relating to relief of debtors; or the
Company's suffering or permitting to continue
unstayed and in effect for thirty (30) consecutive
days any judgment, decree or order entered by a court
of competent jurisdiction, which approves a petition
seeking its reorganization or appointment of a
receiver, custodian, trustee, interim trustee or
liquidator of all or a substantial part of its assets
(any and all of the foregoing shall hereinafter be
referred to as an "Insolvency Change of Control").
2. Section 3.1 is amended to read as follows:
WITHOUT CAUSE. If, at any time prior to the earlier of (i) the
date that is twelve (12) months subsequent to the Effective
Date, or (ii) the Employee's Normal Retirement Date (the
"Salary Continuation Period"), the Company shall terminate the
Employee's employment other than for Cause, Disability, or
death or if the Employee shall terminate his employment for
Good Reason ("Without Cause Termination"):
(a) The Company shall continue pay to the Employee in
accordance with its normal payroll practices the
Employee's base salary at an annual rate equal to the
greater of the Employee's (i) highest monthly base
salary paid or payable by the Company during the
twelve-month period immediately preceding the
Effective Date, or (ii) the highest monthly salary
paid or payable by the Company at any time from the
90-day period preceding the Effective Date through
the Date of Termination (the "Highest Base Salary"),
for the shorter of (x) twenty-four (24) months
following the Date of Termination, or (y) until the
Employee's Normal Retirement Date (the "Salary
Continuation Period").
(b) For the remainder of the Salary Continuation Period,
or such longer period as any plan, program, practice
or policy may provide, the Company shall continue to
provide health insurance, life insurance and
retirement benefits to the Employee and/or the
Employee's family at least equal to those which would
have been provided to them if the Employee's
employment had not been terminated, in accordance
with the most favorable plans, practices, programs or
policies of the Company and its subsidiaries during
the 90-day period immediately preceding the Effective
Date or, if more favorable to the Employee, as in
effect at any time thereafter with respect to other
key employees and their families and for purposes of
eligibility for retirement benefits pursuant to such
plans, practices, programs and policies, the Employee
shall be considered to have remained employed until
the end of the Salary Continuation Period and to have
retired on the last day of such period.
Notwithstanding the foregoing, the Employee shall
have no right to participate in any bonus plan of the
Company subsequent to the Date of Termination.
3. Section 3 is amended by the addition of the following new
Sections 3.5 at the end thereof:
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3.5 WITHOUT CAUSE FOLLOWING INSOLVENCY CHANGE OF CONTROL.
(a) Notwithstanding anything herein to the contrary, in
the event of an Insolvency Change of Control: (i) if
the Employee incurs a Without Cause Termination prior
to the earlier of (A) the date that is twenty-four
(24) months subsequent to the Effective Date or (B)
the Employee's Normal Retirement Date, or (ii) if the
Employee incurs a Without Cause termination at any
time during the pendency of the case constituting the
Insolvency Change of Control, the Company shall pay
to the Employee a lump sum amount equal to his
"Highest Base Salary" multiplied by twenty-four (24)
months (the "Insolvency Salary Continuation Period").
Such lump sum distribution shall be subject to
employment and income tax withholding and shall be
paid as soon as practicable following the Employee's
Date of Termination.
(b) For the remainder of the Insolvency Salary
Continuation Period, or such longer period as any
plan, program, practice or policy may provide, the
Company shall continue to provide health insurance,
life insurance and retirement benefits to the
Employee and/or the Employee's family at least equal
to those which would have been provided to them if
the Employee's employment had not been terminated, in
accordance with the most favorable plans, practices,
programs or policies of the Company and its
subsidiaries during the 90-day period immediately
preceding the Effective Date or, if more favorable to
the Employee, as in effect at any time thereafter
with respect to other key employees and their
families and for purposes of eligibility for
retirement benefits pursuant to such plans,
practices, programs and policies, the Employee shall
be considered to have remained employed until the end
of the Insolvency Salary Continuation Period and to
have retired on the last day of such period.
Notwithstanding the foregoing, the Employee shall
have no right to participate in any bonus plan of the
Company subsequent to the Date of Termination.
4. Section 7 is amended by the addition of the following new
Section 7(h) at the end thereof:
(h) Payment of salary continuation benefits pursuant to
any provision of this Agreement shall not be
duplicated under any other provision of this
Agreement.
Capitalized terms not defined herein shall have the meanings described to them
in the Agreement.
All other provisions of the Agreement shall remain unchanged.
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Amendment to be effective on the day and year first above written.
EMPLOYEE NCS HEALTHCARE, INC.
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Kevin Shaw Jon Outcalt
Chairman of the Board
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