Attached files
| file | filename |
|---|---|
| 10-K - SUN HEALTHCARE GROUP INC | form10k.htm |
| EX-4.1 - SUN HEALTHCARE GROUP INC | ex41.htm |
| EX-31.2 - SUN HEALTHCARE GROUP INC | ex312.htm |
| EX-21.1 - SUN HEALTHCARE GROUP INC | ex211.htm |
| EX-31.1 - SUN HEALTHCARE GROUP INC | ex311.htm |
| EX-23.2 - SUN HEALTHCARE GROUP INC | ex232.htm |
| EX-23.1 - SUN HEALTHCARE GROUP INC | ex231.htm |
| EX-32.1 - SUN HEALTHCARE GROUP INC | ex321.htm |
| EX-4.2.3 - SUN HEALTHCARE GROUP INC | ex423.htm |
| EX-32.2 - SUN HEALTHCARE GROUP INC | ex322.htm |
| EX-10.16 - SUN HEALTHCARE GROUP INC | ex1016.htm |
| EX-10.12 - SUN HEALTHCARE GROUP INC | ex1012.htm |
EXHIBIT 10.18
AMENDED AND
RESTATED
SEVERANCE BENEFITS
AGREEMENT
THIS
AMENDED AND RESTATED SEVERANCE BENEFITS AGREEMENT (“Agreement”) is entered into
as of the 17th day of December, 2008 by and between SunDance Rehabilitation
Corporation (“Employer” or “SunDance”) and Sue Gwyn (“Employee”) with reference
to the following facts:
A. Employee
provides services to Employer as its President; and
B. Employer
and Employee are parties to that certain Severance Benefit Agreement dated as of
November __, 2007 (the “Existing Agreement”); and
C. Employer
and Employee wish to amend and restate the Existing Agreement upon the terms set
forth in this Agreement to comply with Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), effective as of the date hereof.
NOW
THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, Employer and Employee agree as follows:
I.
SEVERANCE BENEFITS.
In the
event of a “Qualifying Termination” as defined in Section II, Employee shall be
entitled to the severance benefits described below upon execution of Employer’s
then standard separation agreement and release (the “Release”) and delivery of
such executed Release to Employer within 21 days following the effective date of
the Qualifying Termination.
A. Cash Payments. The
following cash payments shall be made to Employee:
1. Lump
Sum Severance Payment.
Employee
shall be entitled to a lump sum severance payment in an amount equal to one (1)
year of pay at her base salary then in effect, less applicable federal and state
tax withholding and any other deductions authorized by Employee, with such
amount to be paid to Employee in the month immediately following the month in
which the Qualifying Termination occurs.
2. Earned Salary; Reimbursable Expenses.
Employer shall pay Employee the full amount of any earned but unpaid
salary through the date of such termination, plus payment for all unused
vacation (calculated on the basis of Employee’s salary at the rate then in
effect) that Employee has earned as of the date of such
termination. Payment for any unreimbursed expenses will be made in
accordance with Employer’s normal practice,
with such
amount to be paid to Employee upon or promptly following (but in all events
within 30 days after) the date of the Qualifying
Termination. Employee agrees to provide documentation of any such
expenses promptly after such expenses are incurred.
B. Group Medical
Insurance. Employee and Employee’s eligible dependents shall
be entitled to continued coverage under Employer’s group medical insurance plans
on the same basis as active employees until the earlier of (1) the last day of
the year period commencing on the date of termination; or (2) the date Employee
or Employee’s eligible dependents become eligible to participate in a plan of a
successor employer.
C. Other Plans. Except
as expressly provided to the contrary in Section I.B and Section VI.C., upon any
termination of employment, including without limitation a Qualifying
Termination, Employee’s right to participate in any retirement or benefit plans
and perquisites shall cease as of the date of termination.
II.
QUALIFYING TERMINATION.
Employee
will have incurred a Qualifying Termination for purposes of this Agreement if
either of the following events occurs during the term of Employee’s
employment.
A. Termination by
Employer. Termination of Employee’s employment by Employer
other than for “Good Cause” or “Disability” (as each such term is defined in
Section V, below); or
B. Termination by
Employee. Employee’s termination of her employment with
Employer for “Good Reason” (as such term is defined in Section V
below).
III.
EFFECT OF NON-QUALIFYING TERMINATION.
If
Employee’s employment with Employer terminates for any reason other than a
Qualifying Termination, Employer shall pay Employee the full amount of any
earned but unpaid salary through the date of such termination, plus payment for
all unused vacation time (calculated on the basis of Employee’s salary at the
rate then in effect) which Employee has accrued as of the date of such
termination and a cash payment for any unreimbursed expenses, with such amounts
to be paid to Employee upon or promptly following (but in all events within 30
days after) the date of such termination. Employee agrees to provide
documentation of any such expenses promptly after such expenses are
incurred As of the date of such termination, Employee shall
immediately relinquish the right to any additional payments of benefits from
Employer under this Agreement or otherwise. Employee’s right to
participate in any retirement or benefit plans and perquisites shall cease as of
the date of termination, except as provided in Section VI.C.
-2-
|
|
IV.
EFFECT OF CHANGE IN CONTROL
|
A
termination of Employee’s employment with SunDance without Good Cause within the
six (6) months preceding a Change In Control (as such term is defined in Section
V below) shall be treated as if such termination occurred on the date of such
Change In Control if it is reasonably demonstrated that the termination was at
the request of a third party that has taken steps reasonably calculated to
effect a Change In Control or otherwise arose in connection with or in
anticipation of a Change In Control.
A Change
In Control, in and of itself, does not constitute Good Reason.
V.
DEFINITIONS.
The
following capitalized terms shall have the meanings specified
below:
A.
“Good Cause” shall mean any
one of the following:
|
(1)
|
Any
criminal conviction of the Employee under the laws of the United States or
any state or other political subdivision thereof which, in the good faith
determination of the Chief Operating Officer (“COO”) of SHG Services,
Inc., the parent company of Employer, or the COO’s designee, renders
Employee unsuitable as an employee or legal representative of
SunDance;
|
|
(2)
|
Employee’s
continued failure to substantially perform the duties reasonably requested
by the COO, or the COO’s designee, and commensurate with Employee’s
position and within Employee’s control as President of SunDance (other
than any such failure resulting from Employee’s incapacity due to
Employee’s Disability) after a written demand for substantial performance
is delivered to Employee by the COO, or the COO’s designee, which demand
specifically identifies the manner in which the COO or such designee
believes that Employee has not substantially performed Employee’s duties,
and which performance is not substantially corrected by Employee within
thirty (30) days of receipt of such demand;
or
|
|
(3)
|
Any
material workplace misconduct or willful failure to comply with Employer’s
general policies and procedures as they may exist from time to time by
Employee which, in the good faith determination of the COO, or the COO’s
designee, renders Employee unsuitable as an employee or legal
representative of SunDance.
|
B. “Disability” means Employee’s
inability to engage in substantial gainful activity by reason of any medically
determinable mental or physical impairment
-3-
which can
be expected to result in death or which has lasted or can be expected to last
for a period of 120 substantially consecutive calendar days.
C. “Good Reason” means a
resignation of Employee’s employment with SunDance as a result of and within 60
days after the occurrence of any of the following without Employee’s written
consent:
(1) a
meaningful and detrimental reduction in Employee’s authority, duties or
responsibilities, or a meaningful and detrimental change in Employee’s reporting
responsibilities, as in effect immediately prior to Employee’s termination of
employment;
(2) a
material reduction in Employee’s annual base salary as in effect immediately
prior to the Employee’s delivery of notice to Employer stating the basis of
Employee’s allegation that “Good Reason” exists (the “Good Reason Notice”), a
material reduction in Employee’s target annual bonus (expressed as a percentage
of base salary) as in effect immediately prior to the circumstances described in
the Good Reason Notice, or a material failure to provide Employee with any other
form of compensation or material employment benefit being provided to Employee
immediately prior to the circumstances described in the Good Reason Notice
(excluding however, any reduction in the amount of any annual bonus or the
granting or withholding of incentive compensation (including without limitation
options or stock units) but including a material reduction to the target amount
of the bonus as stated above); or
(3) A
relocation of Employee’s principal place of employment by more than fifty (50)
miles (or the requirement that Employee be based at a different location),
provided that such relocation results in a longer commute (measured by actual
mileage) for Employee from her primary residence to such new
location.
For any
of the circumstances listed in clauses (1), (2) or (3) to constitute “Good
Reason” hereunder, (A) Employee must deliver the Good Reason Notice to Employer
within 30 days of the date on which the circumstances creating “Good Reason”
have first occurred, (B) such circumstance is not corrected by Employer in a
manner that is reasonably satisfactory to Employee (including full retroactive
correction with respect to any monetary matter) within 30 days of Employer’s
receipt of the Good Reason Notice from Employee and (C) Employee terminates her
employment with Employer within the 60 day time period described
above.
A Change
In Control is expressly excluded from the definition of “Good
Reason.”
D.
“Change
In Control”. means the occurrence of any one or more of the following
events:
(1) Any
“person” or “group” (as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a
trustee or other fiduciary
-4-
|
|
holding
securities under an employee benefit plan of Sun Healthcare Group, Inc.
(the parent company of SHG Services, Inc. and the ultimate parent company
of Employer; herein referred to as “SHG”), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 33 1/3% of the then outstanding voting stock of
SHG;
|
|
|
(2)
|
A
merger or consolidation of SHG with any other corporation or other entity,
other than a merger or consolidation that would result in the voting
securities of SHG outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 50.1% of the combined
voting power of the voting securities of SHG or the surviving entity
outstanding immediately after such merger or
consolidation;
|
|
|
(3)
|
A
sale or other disposition by SHG of all or substantially all of its assets
to any entity that is not a subsidiary of
SHG;
|
|
|
(4)
|
A
merger or consolidation of Employer with any other entity that is not SHG
or a subsidiary of SHG, other than a merger or consolidation that would
result in beneficial ownership by SHG, after such merger or consolidation,
of at least 50.1% of the combined voting power of the voting securities of
Employer or such surviving entity outstanding immediately after the merger
or consolidation;
|
|
|
(5)
|
A
sale or other disposition of 50.1% or more of the combined voting power of
the voting securities of Employer to any entity that is not SHG or a
subsidiary of SHG;
|
|
|
(6)
|
A
sale or other disposition by Employer of all or substantially all of
Employer's assets to any other entity that is not SHG or a subsidiary of
SHG.
|
In
addition, notwithstanding clauses (3), (4), (5) and (6), a Change In Control
shall not be deemed to have occurred in the event of a sale or conveyance in
which SHG continues as a holding company of an entity or entities that conduct
the business or businesses formerly conducted by Employer, or any transaction
undertaken for the purpose of reincorporating SHG under the laws of another
jurisdiction, if such transaction does not constitute a Change In Control
pursuant to clauses (1) or (2).
-5-
VI. MISCELLANEOUS.
A. Governing Law. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of New Mexico applicable to contracts
entered into and performed in such State.
B. Dispute
Resolution; Jurisdiction. Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively in
arbitration conducted in Albuquerque, New Mexico in accordance with the
commercial rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. Punitive damages shall not be
awarded.
C. COBRA. Following
termination of participation by Employee and her eligible dependents in
Employer’s group medical insurance plans, Employee and her eligible dependents
may elect to continue coverage under COBRA of any health, dental and vision
plans in effect at the time.
D. Legal Fees and
Expenses. Employer shall pay or reimburse Employee on an
after-tax basis for all costs and expenses (including, without limitation, court
costs and reasonable legal fees and expenses which reflect common practice with
respect to the matters involved) incurred by Employee as a result of any claim,
action or proceeding (a) contesting, disputing, or enforcing any right,
benefits, or obligations under this Agreement, or (b) arising out of or
challenging the validity, advisability, or enforceability of this Agreement or
any provision thereof; provided, however, that this provision shall not apply if
the arbitrator(s) rule in Employer’s favor with respect to Employee’s claim or
position.
E. Successors; Binding
Agreement. This Agreement shall be binding upon and inure to
the benefit of Employee (and Employee’s personal representatives and heirs),
Employer, SHG or any affiliated parent or subsidiary entities, and any
organization that succeeds to substantially all of the business or assets of the
foregoing, or any portion thereof. For the avoidance of any doubt as
to such matters, there shall be no termination of Employee’s employment for
purposes of this Agreement if Employee shall continue to be employed or engaged
by any person or entity that purchases or otherwise succeeds to the assets of
Employer, SHG, or an affiliated parent or subsidiary (or any portion
thereof). Should a Qualifying Termination occur after a Change in
Control described in clause (4), (5) or (6) of the definition thereof is
completed, the payments described in this Agreement shall be made by the
purchasing entity or successor owner of SunDance.
This
Agreement shall inure to the benefit of and be enforceable by the Employer’s
successors and assigns and by Employee’s personal or legal
representatives,
-6-
executors,
administrators, successors, heirs, distributees, devisees, and
legatees. If Employee should die while any amount would still be
payable to Employee hereunder if Employee had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Employee’s devisee, legatee, or other designee or, if
there is no such designee, to Employee’s estate.
F. Effectiveness and
Term. On execution by Employer and Employee, this Agreement
shall be effective and shall continue so long as Employee remains employed by
Employer or its successor, or the parties supersede or terminate the Agreement
in writing.
G. Prior Severance Benefits
Agreement. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof and any prior
agreement, arrangement or understanding between Employer and Employee, relating
to or in connection with the possible payment of severance to Employee upon
termination of her employment, is hereby terminated and superseded in its
entirety by this Agreement.
H. Notices. For
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to
SunDance:
SunDance
Rehabilitation Corporation c/o
Sun
Healthcare Group, Inc.
Attention: General
Counsel
18831 Von
Karman Avenue, Suite 400
Irvine,
California 92612
If to
Employee:
Sue
Gwyn
10 Concord Street
Charlestown, MA 02129
I. Amendments, Waivers,
Etc. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or
-7-
implied,
with respect to the subject matter hereof have been made by either party that
are not expressly set forth in this Agreement.
J.
Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and
effect.
K. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
L. Source of
Payments. Except as expressly provided herein, all payments
provided under this Agreement shall be paid in cash from the general funds of
Employer or SHG and no special or separate fund shall be established, and no
other segregation of assets made, to assure payment. Employee will
have no right, title, or interest whatsoever in or to any investments that
Employer, SHG, or any affiliated parent or subsidiary may make to aid in meeting
its obligations hereunder. To the extent that any person acquires a
right to receive payment from Employer or SHG pursuant to this Agreement, such
right shall be not greater than the right of an unsecured creditor whose claim
arose on the date such right to receive payment arose.
M.
Headings. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect the rights of
the parties to this Agreement.
N. Entire
Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby
and supersedes all prior agreements and understandings of the parties with
respect to the subject matter hereof.
O. Section
409A. (1) If Employee is a “specified employee”
within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of
Employee’s separation from service (within the meaning of Treasury Regulation
Section 1.409A-1(h)(1), without regard to the optional alternative definitions
available thereunder) and any payment or benefit provided in Section I hereof
constitutes a “deferral of compensation” within the meaning of Section 409A of
the Code, Employee shall not be entitled to any such payment or benefit until
the earlier of: (i) the date which is six (6) months after her separation from
service for any reason other than death, or (ii) the date of her
death. The provisions of this paragraph shall only apply if, and to
the extent, required to avoid the imputation of any tax, penalty or interest
pursuant to Section 409A of the Code. Any amounts otherwise payable
to Employee upon or in the six (6) month period following her separation from
service that are not so paid by reason of this Section VI.O.(1) shall be paid
(without interest) as soon as practicable (and in all events within thirty (30)
days) after the date that is
-8-
|
|
six
(6) months after Employee’s separation from service (or, if earlier, as
soon as practicable, and in all events within thirty (30) days, after the
date of her death).
|
(2) To
the extent that any reimbursements pursuant to Sections I.B. or VI.D., are
taxable to Employee, any reimbursement payment due to Employee pursuant to such
provision shall be paid to Employee on or before the last day of Employee’s
taxable year following the taxable year in which the related expense was
incurred. The benefits and reimbursements pursuant to Sections I.B.
and VI.D. are not subject to liquidation or exchange for another benefit and the
amount of such benefits and reimbursements that Employee receives in one taxable
year shall not affect the amount of such benefits and reimbursements that
Employee receives in any other taxable year.
(3) It
is intended that any amounts payable under this Agreement and Employer’s, SHG’s
and Employee’s exercise of authority or discretion hereunder shall comply with
and avoid the imputation of any tax, penalty or interest under Section 409A of
the Code. This Agreement shall be construed and interpreted
consistent with that intent.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first written above.
“Employer”
SUNDANCE REHABILITATION
CORPORATION
By: /s/ Michael
Newman
Michael
Newman
Vice
President
“Employee”
/s/
Sue
Gwyn
Sue Gwyn
-9-