NETSMART TECHNOLOGIES, INC.
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Executive Retirement Plan
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April 1, 2004
NETSMART TECHNOLOGIES, INC.
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Executive Retirement Plan
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Contents Page
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Section 1. Purpose of the Plan 1
Section 2. Definitions 1
Section 3. Administration 2
Section 4. Participation 3
Section 5. Benefits and Payments Under the Plan 4
Section 6. Amendment and Termination of the Plan 5
Section 7. General Provisions 5
APPENDIX A 7
NETSMART TECHNOLOGIES, INC.
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Executive Retirement Plan
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SECTION 1. Purposes of the Plan.
1.1 Netsmart Technologies, Inc. (the "Company") has adopted this Executive
Retirement Plan (the "Plan), effective April 1, 2004, in order to
provide an unfunded retirement benefit to certain current and future
management employees of the Company and its Subsidiaries and Affiliates
who have attained the required age and length of service with the
Company, and who have retired from employment with the Company in good
standing.
SECTION 2. Definitions.
For purposes of the Plan, the following terms shall have the meanings
set forth below:
2.1 "Beneficiary" shall mean the person or persons designated by the
Participant under the Plan to receive benefits under the Plan in the
event of the Participant's death.
2.2 "Benefit" or "Benefits" shall mean the annual and cumulative financial
payment(s) which a Participant is eligible to receive upon Retirement
(as herein defined) under the Plan pursuant to the provisions of Section
5 hereof.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Cause" as it pertains to any Participant under this Plan shall mean (a)
repeated failure to perform material instructions from the Board which
are reasonable; or (b) breach of certain covenants not to compete or
solicit, or concerning trade secrets, proprietary information,
inventions and discoveries, as such covenants are provided by any
employment agreement with the Company; or (c) a breach of trust whereby
personal gain or benefit is obtained at the expense of or to the
detriment of the Company; or (d) a conviction of any felony.
2.5 "Change in Control" shall mean a change in control of the Company as a
result of any of the following:
(a) a change-in-control as such term is defined in Regulation
240.12b-(2) of the Securities Exchange Act of 1934, as amended
(the "Act");
(b) if any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) other than the Company or any person who is a
director or officer of the Company, becomes the "beneficial
owner" (as defined in Rule 13(d)-3 of the Act) directly or
indirectly, of securities of the Company representing twenty
percent (25%) of more of the voting power of the Company's then
outstanding securities;
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Executive Retirement Plan
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(c) if, during any period of two (2) consecutive years during the
term of this Plan, individuals who at the beginning of such
period constitute the Board of Directors, cease for any reason
to constitute at least a majority thereof unless the election of
each new director was nominated, ratified or approved by at
least two-thirds (2/3) of the directors then still in office who
were either directors at the beginning of such period or who
were elected or appointed with the approval or ratification of
at least two-thirds (2/3) of the directors who were directors at
the beginning of such period;
(d) the occurrence of a CSM Disposition as such term is defined in
certain senior executive employment agreements of the Company.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.7 "Committee" shall mean the Compensation Committee of the Board of
Directors of the Company acting on the majority vote of such Committee.
2.8 "Company" shall mean Netsmart Technologies, Inc., a corporation
organized under the laws of the State of Delaware (or any successor
corporation), and any Subsidiaries or Affiliates thereof.
2.9 "Effective Date" shall mean April 1, 2004.
2.10 "Employee" shall mean any employee employed by the Company on or after
the Effective Date of the Plan.
2.11 "Participant" shall mean any Employee of the Company and who has been
designated by the Board for participation in this Plan pursuant to
Paragraph 4.1 hereof at least 60 days prior to any Retirement hereunder.
2.12 "Plan" shall mean the Netsmart Technologies Inc. Executive Retirement
Plan as set forth herein and as amended from time to time.
2.13 "Retirement" shall mean (solely for purposes of this Plan) the voluntary
or involuntary termination of employment (other than for Cause) of any
Participant upon such Participant's attainment of a minimum of
fifty-five (55) years of age with a minimum of eight (8) years of
continuous Company service.
SECTION 3. Administration.
3.1 The Plan shall be administered by the Committee. Any Retirement by any
Participant (as such terms are herein defined) shall be authorized by a
majority of the Committee. The Committee shall have full power and
authority to interpret, construe and administer the Plan in accordance
with the provisions of this Plan document, subject to review by the full
Board.
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Executive Retirement Plan
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3.2 The Committee shall establish and maintain Plan records and may arrange
for the engagement of consultants or legal counsel, and make use of such
external resources, as it shall require or deem advisable for the
purposes of the Plan. The Committee may rely upon the written opinion of
any such consultants or counsel engaged by the Committee, and may also
delegate certain tasks and responsibilities necessary to the
administration of the Plan to such consultants or counsel, or to certain
financial or human resources personnel of the Company.
3.3 To the maximum extent permitted by applicable law, no member of the
Committee or the Board shall be personally liable by reason of any
resolution, contract or other instrument executed by him in his capacity
as a member of the Committee or the Board, nor for any decisions made in
good faith, and the Company shall indemnify and hold harmless each
member of the Committee and the Board, and each officer, employee or
director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan is delegated against any
cost or expense (including reasonable legal fees) or liability arising
out of any action or failure to act taken in good faith in connection
with the administration of the Plan.
SECTION 4. Participation.
4.1 The Board of Directors shall, from time to time, designate those
management employees of the Company who shall be Participants under the
Plan.
4.2 The participation of any designated Participant shall not be rescinded
by the Board or the Committee other than for Cause (as herein defined)
or for breach of Paragraph 4.3 hereof.
4.3 While receiving any Benefits under this Plan following Retirement, a
Participant shall not, without the prior written approval of the Board,
directly or indirectly, or through any other individual or entity,
become an officer or employee of, or render any services (including
consulting services) to any direct competitor of the Company. Further, a
Participant shall not solicit, entice or induce any customer of the
Company to cease purchasing goods or services from the Company or to
become a customer of any direct competitor of the Company, and shall not
solicit, entice or induce any employee of the Company to leave the
employ of the Company or to become an employee of any direct competitor
of the Company.
4.4 A Participant's breach of any of the provisions of Paragraph 4.3 hereof
will result in the termination of all Benefits provided hereunder to
such Participant unless otherwise determined by the Board in its sole
discretion.
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SECTION 5. Benefits and Payments Under the Plan.
5.1 Commencing with the date of the Participant's Retirement (as defined
herein), the Company will annually pay to the Participant (or his
designated legal representative) the Benefits afforded by this Plan.
Such Benefits are fixed by the terms of this Plan and shall increase
based on the number of completed calendar years of Company service
provided by the Participant after the Effective Date in accordance with
the Benefit schedule on Appendix A hereof. The Benefits shall be paid
annually for a period of six calendar years after any such Retirement
(including the year of Retirement).
5.2 Should a Participant die after Retirement but before receiving the full
amount of the Benefits provided herein, the Company shall continue to
make payment of such Benefits (as provided in Paragraph 5.1 hereof) to
the Participant's Beneficiary, as designated in writing by the
Participant and accepted by the Committee, for a period up to and
including the sixth calendar year following Retirement (including the
year of Retirement). In the absence of any effective designation of
Beneficiary, the Benefits provided herein shall be payable to the
Participant's duly-qualified Executor or Administrator for the benefit
of the Participant's estate.
5.3 Payment of Benefits under this Plan shall be made annually in no more
than four equal quarterly installments or (at the discretion of the
Committee) payment may be made in one annual installment of the entire
amount payable to the Participant. These payment(s) shall be made at
such time(s) as is convenient for the Company (but in no event shall any
annual or quarterly installment payments commence after March 31 of each
year in which such Benefits are payable).
5.4 In addition to the Benefits provided by Paragraph 5.1 hereof, the
Participant shall continue to receive for life the health benefits
(including major medical, accident, life and long-term disability
insurance) provided by the Company pursuant to the terms and conditions
of any Employment Agreement in effect between the Company and the
Participant immediately preceding such Participant's Retirement, and
such health benefits shall be considered the Additional Benefits
hereunder.
5.4 All Benefits payments provided for under the Plan shall be paid in cash
from the general funds of the Company, provided, however, that such
payments shall be reduced by the amount of any payments made to the
Participant or his Beneficiary or estate from any trust, special or
separate fund, or insurance policy, established by the Company to assure
such payments. If the Company, in its sole discretion, elects to
establish any such trusts, or special or separate funds, or elects to
make any investments or purchase any insurance to aid it in meeting its
obligations hereunder, the Participant or his Beneficiary or estate
shall have no right, title or interest whatsoever in or to any such
trusts, funds, investments, or insurance. Nothing contained in this
Plan, and no action taken pursuant to any provisions of the Plan, shall
create or be construed to create a trust of any kind between the Company
and the Participant or his Beneficiary or estate. To the extent that any
Participant acquires the right to receive payments hereunder, such right
shall be no greater than the right of an unsecured creditor of the
Company.
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Executive Retirement Plan
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SECTION 6. Amendment and Termination of the Plan.
6.1 The Plan may be amended or suspended, in whole or in part, by the Board
at any time, but no such action shall retroactively impair or otherwise
adversely affect the rights of any Participant to receive the Benefits
to which such Participant is otherwise entitled under the Plan prior to
the date of such action.
6.2 The Board may terminate the Plan at any time. However, the Benefits then
being paid or then owed to any Participant under Section 5 hereof shall
commence or continue to be paid until paid in full. Notwithstanding the
foregoing, no termination of the Plan upon the occurrence of a Change in
Control of the Company shall have effect of reducing or eliminating the
Benefits then being paid or then owed to any Participant.
6.3 Nothing in the Plan shall preclude the Company from selling to,
consolidating or merging into or with, or transferring all or
substantially all of its assets to, another corporation, and such
corporation shall assume this Plan and all obligations of the Company
hereunder.
SECTION 7. General Provisions.
7.1 Nothing in this Plan shall be construed to affect in any manner the
rights and privileges of any Employee or Participant to be covered by or
participate in any employee benefit plan which the Company may now or in
the future provide.
7.2 Nothing contained herein shall confer upon any Participant or Employee
the right to be retained in the employ of the Company, nor interfere
with the right of the Company to terminate the employment of any
Participant or Employee without regard to the existence of this Plan.
Notwithstanding any other provisions of this Plan, in the event of a
Participant's termination for Cause, such Participant or his Beneficiary
or estate shall forfeit all rights to payments under the Plan.
7.3 The Plan is intended to constitute an "unfunded plan for management or
other highly compensated individuals" as defined in the Employee
Retirement Income Security Act of 1974 (ERISA) and shall therefore not
be construed as a qualified employee retirement benefit program.
Notwithstanding the foregoing, the Plan may be subject to certain
provisions of ERISA, including certain requirements relating to
reporting, disclosure, enforcement and claims.
7.4 The Company may withhold from any Benefits payable under the Plan all
Federal, state, city or other taxes as shall be required pursuant to any
law or governmental regulation or ruling.
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Executive Retirement Plan
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7.5 All expenses incurred in administering the Plan shall be paid by the
Company and none shall be paid by the Participant.
7.6 No right to any amount payable at any time under the Plan may be
assigned, transferred, pledged or otherwise encumbered, either
voluntarily or by operation of law, except as expressly provided herein.
This Plan shall be binding upon and inure to the benefit of the Company
and its successors and assigns, and the Participant, his Beneficiary and
estate.
7.7 This Plan shall be construed, regulated and administered according to
the Code and the laws of the State of New York.
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Executive Retirement Plan
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APPENDIX A
Schedule of Retirement Benefits Under the Plan Assuming the Participant's
Attainment of the Minimum Retirement Age of 55 (with 8 or More Years of Total
Company Service)
Completed Calendar Years of Company
Service After Effective Date of Plan Annual Retirement Benefit
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Less than 1 Completed Calendar Year $ 85,000
1 Completed Calendar Year $ 93,500
2 Completed Calendar Years $102,850
3 Completed Calendar Years $113,135
4 Completed Calendar Years $124,448
5 Completed Calendar Years or More $136,893 (Maximum Benefit)