EXHIBIT 10.26
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 16th day of May, 1994 by and between David P.
Williams, 1000 Ann Street, Birmingham, Michigan 48009.
("Employee"), and Chemed Corporation, a Delaware corporation (the
"Company").
WHEREAS, the Company has employed Employee and desires to continue to
employ Employee as a senior executive and Employee desires to work for the
Company or its subsidiaries in such capacity on the terms and conditions
hereinafter provided;
WHEREAS, Employee is a key senior executive of the Company with major
responsibilities for planning, directing, coordinating and controlling overall
corporate operations;
WHEREAS, in such capacity Employee will develop or have access to all
or substantially all of the business methods and confidential information
relating to the Company, including but not limited to, its financial performance
and results, its product formulae, its manufacturing organization and methods,
its product research and development policies and programs, its service
techniques, its purchasing organization and methods, its sales organization and
methods, its pricing of products, its market development and expansion plans,
its personnel policies and training and development programs, and its customer
and supplier relationships; and franchising programs and franchisee
relationships;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. EMPLOYMENT
Section 1.1 Position and Duties.
(a) The Company agrees to employ Employee and Employee agrees to work
for the Company as a senior executive. Employee shall have such duties and
authority as are normally associated with his office. Employee will also serve
in such other management capacities as may be mutually agreed upon from time to
time. While employed hereunder, Employee shall devote his full time, effort,
skill and attention to the affairs of the Company. During the term of his
employment hereunder, Employee shall not render any services to any other person
that might be in competition with the Company or any of its subsidiaries or
affiliates or in conflict with his position as a senior executive of the Company
or his duty of undivided loyalty to the Company.
Section 1.2 Term. Unless sooner terminated in accordance with the
provisions hereof, the term of employment shall commence on May 16, 1994 and
shall continue until May 16, 1997.
2. COMPENSATION
Section 2.1 Base Salary. While employed hereunder the Company shall
pay Employee a base salary of $86,400.00 per annum or such higher amount or
amounts as the Company may from time to time approve. The base salary shall be
due and payable at the same times and intervals at which salary payments are
made to other senior executives.
Section 2.2 Incentive Compensation. Employee will be entitled to
participate in all incentive compensation and bonus plans as such have been
maintained by the
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Company for its senior executives generally. The Employee's annual incentive
compensation will be payable, with respect to each calendar year, on or before
February 10 in the following year.
Section 2.3 Employee Benefits. Employee shall be entitled to
participate in and receive rights and benefits under those "fringe" benefit
plans which the Company provides for its executives generally, which at the
present time include:
Chemed Employees Savings & Investment Plan
Chemed Employee Stock Ownership Plan I & II
Chemed Flexible Spending Account Plan
Chemed Long Term Disability Income Plan
Chemed Business Travel Accident Insurance Plan
Chemed Group Life, Medical and Disability Plans
Employee's participation in such plans will be in accordance with and subject to
the terms and provisions thereof.
Section 2.4 Pension. Employee will continue to participate in
Chemed's Excess Benefit Plan in accordance with and subject to their respective
provisions.
Section 2.5 Miscellaneous.
(a) Company will pay or reimburse Employee for his reasonable business
expenses in accordance with Company policies.
(b) Employee will be entitled to paid vacation in accordance with
current Company policy. Employee will be entitled to payment for unused vacation
time in accordance with Company policy.
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(c) Subject to Section 1.1(a) of this Agreement, compliance with
applicable laws relating to interlocking directorships, the Company's policies
on conflicts of interest and improper payments and accounting records contained
in a statement entitled "Policies on Business Ethics" and to any other current
applicable Company policy, during the term of Employee's employment hereunder,
Employee will be permitted to accept election, and to serve as, a director of
other entities. Employee will be permitted to retain all fees and other benefits
resulting from his service as a director of any such entity.
(d) The Company shall promptly pay upon demand any reasonable legal
fees incurred by Employee in connection with any enforcement of his rights under
this Agreement.
3. TERMINATION.
Section 3.1 Termination of Employment. The employment of Employee
shall terminate prior to the expiration of the term specified in Section 1.2
upon the occurrence of any of the following prior to such time:
(a) The death of Employee;
(b) The termination of Employee's employment due to Employee's
disability pursuant to Section 3.2; or
(c) The termination by the Company of Employee's employment for Cause
pursuant to Section 3.3.
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The termination by the Company of Employee's employment hereunder for any
reason other than those specified in paragraphs (a), (b) and (c) above shall
hereinafter be referred to as a termination "Without Cause".
Section 3.2 Disability. If, by reason of physical or mental
disability, Employee is unable to carry out the duties he has assumed pursuant
to this Agreement for four (4) consecutive months, his services hereunder may be
terminated by the Company upon two (2) months' written notice to be given to
Employee at any time after the period of four (4) continuous months of
disability and while such disability continues. If, prior to the expiration of
the two (2) months after the giving of such notice, Employee shall recover from
such disability and return to the active discharge of his duties, then such
notice shall be of no further force and effect and Employee's employment shall
continue as if such disability had not occurred. If Employee shall not so
recover from his disability and return to his duties, then his services shall
terminate at the expiration date of such two (2) months' notice. During the
period of Employee's disability and until the expiration date of such two (2)
months' notice, Employee shall continue to receive all compensation and other
benefits provided herein as if he had not been disabled, at the time, in the
amounts and in the manner provided herein. In the event a dispute arises between
Employee and the Company concerning Employee's physical or mental ability to
continue or return to the performance of his duties as aforesaid, Employee shall
submit to examination by a competent physician mutually agreeable to both
parties, and such physician's opinion as to Employee's ability to so perform
will be final and binding.
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Section 3.3 For Cause. The Company may, at any time by written notice
to the Employee, terminate his services hereunder for Cause. Such notice shall
specify the event or events and the actions or failure to act constituting
Cause. The term "Cause", as used herein, shall mean and be limited to the
occurrence of one or more of the following events:
(a) His conviction, by a court of competent jurisdiction, of a felony,
which through lapse of time or otherwise is not subject to appeal;
(b) His commission of an act of fraud upon, or an act evidencing
material dishonesty toward, the Company; or
(c) Any willful failure by him to observe or perform his material
agreements herein contained.
If the basis for discharge is pursuant to paragraph (c) above,
Employee shall have thirty (30) days from his receipt of the notice of
termination for Cause to cure the actions or failure to act specified in such
notice and, in the event of any such cure within such period, such conduct shall
not constitute Cause hereunder.
Section 3.4 Consequences of Termination.
(a) If Employee's employment hereunder shall terminate pursuant to any
of the provisions of this Article 3, his base salary and incentive compensation
referred to in Sections 2.1 and 2.2 shall cease to accrue forthwith.
(b) If the Company shall terminate Employee's employment hereunder
Without Cause, the Company shall pay Employee monthly severance payments at an
annual rate equal to 150% of the sum of (i) the Employee's then current base
salary plus (ii) the
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amount of the annual incentive bonus most recently paid or approved to be paid
to Employee in respect of the previous year, plus (iii) the fair market value of
all shares of Chemed Corporation capital stock subject to stock awards granted
to Employee under one or more stock incentive plans of Chemed Corporation which
have vested during the 12 months prior to the Employee's termination, such fair
market value to be determined as of the date of vesting of any such shares. Such
monthly severance payments shall be made for a period equal to the balance of
the term of employment provided for in Section 1.2.
(c) In the event that Employee's employment hereunder shall terminate
pursuant to any of the provisions of this Article 3, the rights of Employee
under any incentive compensation plan referred to in Section 2.2, under the
executive or employee benefit plans or arrangements referred to in Section 2.3
and Section 2.4 or otherwise, shall be determined in accordance with the terms
and provisions of such plans, arrangements and options applicable to an employee
whose employment has terminated in the manner that occurred, except that a
termination Without Cause shall be treated as a retirement under a retirement
plan of the Company for the purposes of the Company stock incentive plans.
4. OTHER COVENANTS OF EMPLOYEE.
Section 4.1 Employee shall have no right, title or interest in any
reports, studies, memoranda, correspondence, manuals, records, plans, or other
written, printed or otherwise recorded materials of any kind belonging to or in
the possession of the Company or its subsidiaries, or in any copies, pictures,
duplicates, facsimiles or other
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reproductions, recordings, abstracts or summaries thereof and Employee will
promptly surrender to the Company any such materials (other than materials which
have been published or otherwise have lawfully been made available to the public
generally) in his possession upon the termination of his employment or any time
prior thereto upon request of the Company.
Section 4.2 Without the prior written consent of the Company, Employee
shall not at any time (whether during or after his employment with the Company)
use for his own benefit or purposes or for the benefit or purposes of any other
person, firm, partnership, association, corporation or business organization,
entity or enterprise, or disclose (except in he performance of his duties
hereunder) in any manner to any person, firm, partnership, association,
corporation or business organization, entity or enterprise, or disclose (except
in the performance of his duties hereunder) in any manner to any person, firm,
partnership, association, corporation or business organization, entity or
enterprise, any trade secret, or other confidential or proprietary information,
data, know_how or knowledge (including, but not limited to, that relating to
financial policies, product composition, manufacturing organization and methods,
research and development policies and programs, service techniques, purchasing
organization and methods, sales organization and methods, product pricing,
market development and expansion plans, personnel policies and training and
development programs, customer and supplier relationships) belonging to, or
relating to the affairs of, the Company or its subsidiaries.
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Section 4.3 Employee shall promptly disclose to the Company (and to no
one else) all improvements, discoveries and inventions that may be of
significance to the Company or its subsidiaries made or conceived alone or in
conjunction with others (whether or not patentable, whether or not made or
conceived at the request of or upon the suggestion of the Company during or out
of his usual hours of work or in or about the premises of the Company or
elsewhere) while in the employ of the Company, or made or conceived within six
months after the termination of his employment by the Company, if resulting
from, suggested by or relating to such employment. All such improvements,
discoveries and inventions shall, to the extent that they are patentable, be the
sole and exclusive property of the Company and are hereby assigned to the
Company. At the request of the Company and at its cost and without liability to
Employee, Employee shall assist the Company, or any person or persons from time
to time designated by it, in obtaining the grant of patents in the United States
and/or in such other country or countries as may be designated by the Company
covering such improvements, discoveries and inventions and shall be connection
therewith execute such applications, statements or other documents, furnish such
information and data and take all such other action (including, but not limited
to, the giving of testimony) as the Company may from time to time request.
Section 4.4 The obligations of Employee set forth in this Article 4
are in addition to and not in limitation of any obligations which would
otherwise exist as a matter of law. The provisions of this Article 4 shall
survive the termination of Employee's employment hereunder.
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5. CERTAIN REMEDIES
Section 5.1 Breach by the Company. In the event that the Company
shall fail, in any material respect, to observe and perform its obligations
hereunder, the Employee may give written notice to the Company specifying the
nature of such failure. If within thirty (30) days after its receipt of such
notice the Company shall not have remedied such failure, the Employee shall have
the right and option to treat such failure as termination of his employment by
the Company Without Cause, to cease rendering services hereunder and thereafter
to receive the severance benefits and have the other rights and obligations
provided for in Article 3 hereof in the case of a termination by the Company
Without Cause. The parties agree that a material breach by the Company for
purposes of this Section 5.1 shall include, but not be limited to, a material
reduction in Employee's title, authority or responsibilities from those he was
exercising on the date of execution of this Agreement. The remedy provided for
in this Section 5.1 shall be in addition to and not in limitation of any other
remedies which would otherwise exist as a matter of law.
Section 5.2 Breach by the Employee. Employee acknowledges and agrees
that the Company's remedy at law for any breach of any of Employee's obligations
under Sections 1.1(a), 4.1, 4.2 and 4.3 would be inadequate, and agrees and
consents that temporary and permanent injunctive relief may be granted in any
proceeding that may be brought to enforce any provision of any such sections,
without the necessity of proof of actual damage.
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6. GENERAL PROVISIONS
Section 6.1 Representations and Warranties. Employee represents and
warrants to the Company that he is free to enter into the agreement and that he
has no prior or other obligations or commitments of any kind to anyone that
would in any way hinder or interfere with his acceptance of, or the full,
uninhibited and faithful performance of, his employment hereunder or the
exercise of his best efforts as an employee of the Company.
Section 6.2 Understandings; Amendments. Except as otherwise provided
herein, this Agreement sets forth the entire agreement and understanding of the
parties concerning the subject matter hereof and supersedes all prior
agreements, arrangements and understandings between Employee and the Company
concerning such subject matter. No representation, promise, inducement or
statement of intention has been made by or on behalf of either party hereto that
is not set forth in this Agreement or the documents referred to herein. This
Agreement may not be amended or modified except by a written instrument
specifically referring to this Agreement executed by the parties hereto.
Section 6.3 Notices.
(a) Any notice or other communication required or permitted to be
given hereunder shall be in writing and may either be delivered personally to
the addressee or be mailed, registered mail, postage prepaid, as follows:
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If to the Company:
Chemed Corporation
2600 Chemed Center
Cincinnati, OH 45202
Attn: President
with a copy to:
Secretary
Chemed Corporation
2600 Chemed Center
Cincinnati, OH 45202
If to Employee:
1000 Ann Street
Birmingham, MI 48009
(b) Either party may change the address to which any such notices or
communications are to be directed to it by giving written notice to the other
party in the manner provided in the preceding paragraph (a).
Section 6.4 Assignments; Binding Effect.
(a) Employee acknowledges that the services to be rendered by him are
unique and personal. Accordingly, Employee may not assign any of his rights or
delegate any of his duties or obligations under this Agreement. This Agreement
shall be binding upon, and to the extent herein permitted shall inure to the
benefit of, Employee's heirs, legatees and legal representatives.
(b) The Company may not assign this Agreement or its rights hereunder
except to a successor of all or substantially all of the business and assets of
the Company. This Agreement shall be binding upon, and shall inure to the
benefit of, the Company's successors and permitted assigns.
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Section 6.5 Waivers. The failure of either party hereto at any time
or from time to time to require performance of any of the other party's
obligations under this agreement shall in no manner affect the right to enforce
any provision of this Agreement at a subsequent time, and the waiver of any
rights arising out of any breach shall not be construed as a waiver of any
rights arising out of any subsequent breach.
Section 6.6 Severance Plans. Amounts paid hereunder are in addition
to any amounts payable under the Company severance plans, without offset or
reduction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written hereinabove.
CHEMED CORPORATION
By: /s/ Kevin J. McNamara
------------------------------------
Kevin J. McNamara
EMPLOYEE
/s/ David P. Williams
----------------------------------------
David P. Williams
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AMENDMENT NO. 7
TO EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 21, 2001 between David P. Williams
("Employee") and Chemed Corporation (the "Company").
WHEREAS, Employee and the Company have entered into an Employment
Agreement dated as of May 16, 1994 and amended May 15, 1995, May 20, 1996, May
19, 1997, May 18, 1998, May 17, 1999 and May 15, 2000 ("Employment Agreement");
and
WHEREAS, Employee and the Company desire to further amend the
Employment Agreement in certain respects.
NOW, THEREFORE, Employee and the Company mutually agree that the
Employment Agreement shall be amended, effective as of May 21, 2001, as follows:
A. The date, amended as of May 15, 2000, set forth in Section 1.2 of
the Employment Agreement, is hereby deleted and the date of May
21, 2004 is hereby substituted therefor.
B. The base salary amount set forth in the first sentence of Section
2.1 of the Employment Agreement is hereby deleted and the base
salary amount of $157,500 per annum is hereby substituted.
C. The amount of unrestricted stock award recognized in lieu of
incentive compensation in 2000 is $37,895.
Except as specifically amended in this Amendment No. 7 to Employment
Agreement, the Employment Agreement, as amended, shall continue in full force
and effect in accordance with its terms, conditions and provisions.
IN WITNESS WHEREOF, the parties have duly executed this amendatory
agreement as of the date first above written.
EMPLOYEE
/s/ David P. Williams
----------------------------------------
David P. Williams
CHEMED CORPORATION
/s/ Kevin J. McNamara
----------------------------------------
Kevin J. McNamara
President
AMENDMENT NO. 10
TO EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 19, 2003 between David P. Williams
("Employee") and Chemed Corporation (the "Company").
WHEREAS, Employee and the Company have entered into an Employment
Agreement dated as of May 16, 1994 and amended May 15, 1995, May 20, 1996, May
19, 1997, May 18, 1998, May 17, 1999, May 15, 2000, May 21, 2001, January 2,
2002 and August 7, 2002 ("Employment Agreement"); and
WHEREAS, Employee and the Company desire to further amend the
Employment Agreement in certain respects.
NOW, THEREFORE, Employee and the Company mutually agree that the
Employment Agreement shall be amended, effective as of May 19, 2003, as follows:
A. The date, amended as of August 7, 2002, set forth in Section 1.2
of the Employment Agreement, is hereby deleted and the date of
May 21, 2006 is hereby substituted therefore.
B. The amount of unrestricted stock award recognized in lieu of
incentive compensation in 2002 is $37,181.
Except as specifically amended in this Amendment No. 10 to Employment
Agreement, the Employment Agreement, as amended, shall continue in full force
and effect in accordance with its terms, conditions and provisions.
IN WITNESS WHEREOF, the parties have duly executed this amendatory
agreement as of the date first above written.
EMPLOYEE
/s/ David P. Williams
----------------------------------------
David P. Williams
CHEMED CORPORATION
/s/ Kevin J. McNamara
----------------------------------------
Kevin J. McNamara
President & Chief Executive Officer