Amendment No. 2 to EMPLOYMENT AGREEMENT
EXHIBIT
10.1
Amendment
No. 2
to
THIS
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (“Agreement”) effective as of October
31, 2007, by and between L. Xxxxx Xxxxx (“Xx. Xxxxx”) and Sun Healthcare Group,
Inc., a Delaware corporation (“Sun”);
WHEREAS,
Sun and Xx. Xxxxx entered into an Employment Agreement dated as of February
14,
2005, and amended such Employment Agreement effective as of October 12, 2006
(as
so amended, the “Employment Agreement”), and they desire to amend the Employment
Agreement with respect to the terms and conditions of Xx. Xxxxx’x bonus
eligibility, as approved by the Compensation Committee of the Board of Directors
of Sun on February 27, 2007), as set forth below (capitalized terms used in
this
Agreement without definition shall have the meanings provided in the Employment
Agreement).
NOW,
THEREFORE, in consideration of the above recitals and the mutual covenants
and
agreements contained herein, Xx. Xxxxx and Sun agree as follows:
1. Amendment. Schedule
A to the Employment Agreement is amended by deleting it in its entirety and
inserting Schedule A hereto in lieu thereof.
2. Miscellaneous.
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(a)
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Amendments,
Waivers, Etc. Except as otherwise provided herein,
no provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by both parties. 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.
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(b)
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Entire
Agreement. The Employment Agreement, as amended by
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. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in
the Employment Agreement, as amended hereby, and the Employment Agreement,
as so amended, shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral
or
written, with respect to the subject matter hereof. Except for
the changes set forth in Section 1 and Schedule A hereto, the Employment
Agreement shall remain in full force and
effect.
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1
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(c)
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which,
when
so executed and delivered, shall be deemed an original, but all such
counterparts together shall constitute one and the same
instrument.
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The
parties hereto have executed this
Agreement as of the date first above written.
| /s/ L. Xxxxx Xxxxx | October 31, 2007 |
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L.
Xxxxx Xxxxx
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Date
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SUN
HEALTHCARE GROUP, INC.
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By /s/
Xxxxxxx X. Xxxxxx
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October
31, 2007
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Its
Chief Executive Officer
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Date
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2
Schedule
A
Xx.
Xxxxx’x Bonus for any fiscal year shall be based on the criteria set forth
below. There are two components to his
Bonus: EBITDA and individual goals, which are defined and outlined
below. In no event shall his Bonus exceed 120% of his Base Salary for
such fiscal year.
1. Maximum
Amount. The maximum amount of the Bonus shall be based upon
the earnings before interest, taxes, depreciation and amortization of Sun
(“EBITDA”), as published by Sun in its press release announcing financial
results for the year in which the Base Salary was earned, but excluding the
effect of actuarial adjustments for self-insurance for general and professional
liability. The Compensation Committee reserves the right to make
adjustments to the calculation, including the inclusion or exclusion of
discontinued operations and other normalizing adjustments.
The
Compensation Committee shall
establish the EBITDA target each year.The potential amount
of
the Bonus shall be based upon actual EBITDA attained as a percentage
of the target EBITDA as follows: if actual EBITDA is less than 85% of
target EBITDA, the maximum amount of the Bonus (the “Maximum Amount”) will be
zero; if actual EBITDA is 85% of target EBITDA, the Maximum Amount will be
10%
of Base Salary; if actual EBITDA is 100% of target EBITDA, the Maximum Amount
will be 50% of Base Salary (if actual EBITDA is greater than 85% but less than
100% of target EBITDA, the amount will be pro rated between 10% and 50% of
Base
Salary); and if actual EBITDA is 115% (or greater) of target EBITDA, the Maximum
Amount will be 120% of Base Salary (if actual EBITDA is greater than 100% but
less than 115% of target EBITDA, the Maximum Amount will be pro rated between
50% and 120% of Base Salary).
2. EBITDA
Component. In the event
that the
Maximum Amount is greater than zero, then Xx. Xxxxx shall be paid 80% of the
Maximum Amount in recognition of the achievement of the EBITDA
target.
3. Individual
Goals Component. The Chief Executive Officer of Sun (the
“CEO”) shall establish the individual goals each year after consulting
with Xx.
Xxxxx, the Compensation Committee, and such others as the CEO deems
appropriate. In the event that the Maximum Amount is greater than
zero, then Xx. Xxxxx shall be paid up to 20% of the Maximum Amount in
recognition of the achievement of his individual goals, to be determined as
follows: after the fiscal year end, the CEO shall make a recommendation to
the
Compensation Committee as to what extent the goals have been met. The
Compensation Committee shall determine the amount of this component of the
Bonus
to be paid to Xx. Xxxxx based upon the level of attainment of the
goals.
4. Timing
of Payment. Both components of the Bonus shall be paid to
Xx. Xxxxx at the time specified in Section 3(b).
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