GENTIVA HEALTH SERVICES, INC.
EXECUTIVE OFFICERS BONUS PLAN
(amended as of January 1, 2005)
SECTION 1. Purpose.
Gentiva Health Services, Inc. (the "Company") has established this
Executive Officers Bonus Plan (the "Plan"), which was originally effective
January 1, 2000. The Plan is hereby amended, effective January 1, 2005, subject
to shareholder approval, in order to provide the Company's executive officers
with an opportunity to earn annual bonus compensation, contingent on the
achievement of certain performance goals, as an incentive and reward for their
leadership, ability and exceptional services.
SECTION 2. Definitions.
2.1 "Award" means the amount of bonus compensation to which an Eligible
Employee is entitled to each Plan Year as determined by the Committee
pursuant to Section 4 of the Plan.
2.2 "Code" means the Internal Revenue Code of 1986, as amended, including
applicable regulations thereunder.
2.3 "Committee" means a committee of the Company's Board of Directors (the
"Board") consisting solely of not less than two persons who, to the
extent required to satisfy the exception for performance-based
compensation under Code Section 162(m), are "outside directors" within
the meaning of such section. The members of the Committee shall serve
at the pleasure of the Board.
2.4 "Determination Date" means (i) the day immediately preceding the first
day of a Plan Year; or (ii) no later than ninety (90) days after the
beginning of the Plan Year (provided however, that if the performance
period is a period of less than one year, the Committee shall take any
such actions prior to the lapse of 25% of the performance period), by
which date the Committee may establish performance goals for a Plan
Year without causing an Award to be treated as other than
performance-based compensation within the meaning of Code Section
2.5 "Eligible Employee" means any executive officer of the Company.
2.6 "Plan Year" means the fiscal year of the Company.
SECTION 3. Administration.
3.1 The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present shall be
deemed the acts of the Committee.
3.2 The Committee shall have the authority to establish performance goals
for the awarding of Awards for each Plan Year; to determine the
Eligible Employees to whom Awards are to be made for each Plan Year;
to determine whether performance goals for each Plan Year have been
achieved; to authorize payment of Awards under the Plan; to adopt,
alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall deem advisable; to interpret the terms
and provisions of the Plan; and to correct any defect, supply any
omission or reconcile any inconsistency or conflict in the Plan or in
any Award. The Committee's determinations under the Plan need not be
uniform among all Eligible Employees.
3.3 Subject to the provisions of the Plan, the Committee shall have the
authority and discretion to determine the extent to which Awards under
the Plan will be structured to conform to the requirements applicable
to performance-based compensation as described in Code Section 162(m),
and to take such action, establish such procedures, and impose such
restrictions at the time such Awards are granted as the Committee
determines to be necessary or appropriate
to conform to such requirements. Notwithstanding any provision of the
Plan to the contrary, if an Award under the Plan is intended to
qualify as performance-based compensation under Code Section 162(m)
and the regulations issued thereunder and a provision of the Plan
would prevent such Award from so qualifying, such provision shall be
administered, interpreted and construed to carry out such intention
(or disregarded to the extent such provision cannot be so
administered, interpreted or construed).
3.4 Notwithstanding any provision of the Plan to the contrary, if any
Award provided under the Plan is subject to the provisions of Section
409A of the Code and the regulations issued thereunder, the provisions
of the Plan shall be administered, interpreted and construed in a
manner necessary to comply with Section 409A and the regulations
issued thereunder (or disregarded to the extent such provision cannot
be so administered, interpreted, or construed.)
3.5 All determinations made by the Committee, in its sole and absolute
discretion, with respect to the Plan and Awards thereunder shall be
final and binding on all persons, including the Company and all
SECTION 4. Determination of Awards.
4.1 No later than the Determination Date, the Committee shall establish
(i) the Eligible Employees who shall be eligible for an Award for a
Plan Year, (ii) the performance goals for such Plan Year and (iii) the
corresponding Award amounts payable under the Plan upon achievement of
such performance goals.
4.2 The amount of an Award for any Plan Year shall be an amount not
greater than the lesser of: (i) 200% of such Eligible Employee's
annual base salary; or (ii) $2.5 million, which amount shall be
determined based on the achievement of one or more performance goals
established by the Committee with respect to such Eligible Employee.
4.3 Performance goals may vary from Eligible Employee to Eligible Employee
and shall be based upon such one or more of the following performance
criteria as the Committee may deem appropriate: appreciation in share
value, total shareholder return, earnings per share, operating income,
net income, pro forma net income, return on equity, return on
designated assets, return on capital, economic value added, earnings,
revenues, expenses, operating profit margin, operating cash flow,
gross profit margin, net profit margin, employee turnover, employee
headcount, labor costs, customer service, market share and accounts
receivable. The performance goals may be determined by reference to
the performance of the Company, or of a subsidiary or affiliate, or of
a division or unit of any of the foregoing. In addition to
establishing minimum performance goals below which no compensation
shall be payable pursuant to an Award, the Committee, in its sole
discretion, may create a performance schedule under which the
Committee balances various factors in determining whether the target
Award may be paid, including determining that an amount less than or
more than the target Award will be paid as a result of the interplay
of such factors.
4.4 The Committee, in its sole discretion, may also establish such
additional restrictions or conditions that must be satisfied as a
condition precedent to the payment of all or a portion of any Awards.
Such additional restrictions or conditions need not be
performance-based and may include, among other things, the receipt by
an Eligible Employee of a specified annual performance rating, the
continued employment by the Eligible Employee and/or the achievement
of specified performance goals by the Company, business unit or
Eligible Employee. Furthermore and notwithstanding any provision of
the Plan to the contrary, the Committee, in its sole discretion, may
reduce the amount of any Award to an Eligible Employee if it concludes
that such reduction is necessary or appropriate based upon: (i) an
evaluation of such Eligible Employee's performance; (ii) comparisons
with compensation received by other similarly situated individuals
working within the Company's industry; (iii) the Company's financial
results and conditions; or (iv) such other factors or conditions that
the Committee deems relevant. Notwithstanding any provision of the
Plan to the contrary, the Committee shall
not use its discretionary authority to increase any Award that is
intended to be performance-based compensation under Code Section
4.5 To the extent consistent with Code Section 162(m), the Committee may
determine that certain adjustments shall apply, in whole or in part,
in such manner as specified by the Committee, to exclude the effect of
any of the following events that occur during a performance period
hereunder: the impairment of tangible or intangible assets; litigation
or claim judgments or settlements; the effect of changes in tax law,
accounting principles or other such laws or provisions affecting
reported results; accruals for reorganization and restructuring
programs, including, but not limited to, reductions in force and early
retirement incentives; currency fluctuations; and any extraordinary,
unusual, infrequent or non-recurring items, including, but not limited
to, such items described in management's discussion and analysis of
financial condition and results of operations or the financial
statements and notes thereto appearing in the Company's annual report
on Form 10-K for the applicable year.
SECTION 5. Payment of Award.
5.1 An Award (if any) to any Eligible Employee for a Plan Year shall be
paid in a single lump sum in cash as soon as practicable after the end
of the Plan Year, provided, however, (A) that the Committee shall have
first certified in writing (i) that a performance goal with respect to
such Eligible Employee for such Plan Year was satisfied and the level
of such goal attained, and (ii) the amount of each such Eligible
Employee's Award; and (B) such payment shall be made no later than two
and one-half months from the end of the Plan Year in which the
Eligible Employee performed the services related to the Award.
5.2 If an Eligible Employee dies after the end of a Plan Year but before
receiving payment of any Award, the amount of such Award shall be paid
to a designated beneficiary or, if no beneficiary has been designated,
to the Eligible Employee's estate, in the form of a lump sum payment
in cash as soon as practicable after the Award for the Plan Year has
been determined and certified in accordance with this Section 5.
5.3 Notwithstanding the foregoing, the Committee may determine, by
separate employment agreement with any Eligible Employee or otherwise,
that all or a portion of an Award for a Plan Year shall be payable to
the Eligible Employee during the Plan Year upon the Eligible
Employee's death, disability (which, to the extent necessary to comply
with Code Section 409A, shall have the meaning set forth in Code
Section 409A(a)(2)(C)) or termination of employment with the Company,
or upon a change of control of the Company (which, to the extent
necessary to comply with Code Section 409A, shall have the meaning set
forth in Code Section 409A(a)(2)(A)(v)).
5.4 In the event a separate employment agreement does not provide for
payment upon the events described in Section 5.3, unless otherwise
determined by the Committee, Eligible Employees who have terminated
employment with the Company prior to the end of a performance period
for any reason other than death, retirement or disability, shall
forfeit any and all rights to payment under any Awards then
outstanding under the terms of the Plan and shall not be entitled to
any cash payment for such period. Unless otherwise determined by the
Committee, if an Eligible Employee's employment with the Company
should terminate during a performance period by reason of death,
retirement or disability, the Eligible Employee's Award shall be
prorated to reflect the period of service prior to his/her death,
retirement or disability, and shall be paid either to the Eligible
Employee or, as appropriate, to his/her estate, subject to the
Committee's certification that the applicable performance goals have
SECTION 6. Non-transferability.
No Award or rights under this Plan may be transferred or assigned other
than by will or by the laws of descent and distribution.
SECTION 7. Amendments and Termination.
7.1 The Board may terminate the Plan at any time and may amend it from
time to time, provided, however, that no termination or amendment of
the Plan shall adversely affect the rights of an Eligible Employee or
a beneficiary to a previously certified Award. Amendments to the Plan
may be made without shareholder approval except as required to satisfy
Code Section 162(m).
7.2 Notwithstanding the foregoing or any provision of the Plan to the
contrary, the Committee may at any time (without the consent of the
Eligible Employee) modify, amend or terminate any or all of the
provisions of the Plan to the extent necessary to conform the
provisions of the Plan with Code Section 409A, regardless of whether
such modification, amendment, or termination of the Plan shall
adversely affect the rights of an Eligible Employee under the Plan.
SECTION 8. General Provisions.
8.1 Nothing set forth in the Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of
the Plan nor the determination of any Award hereunder shall confer
upon an Eligible Employee any right to continued employment.
8.2 No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall
be personally liable for any action, determination or interpretation
taken or made with respect to the Plan, and all members of the Board
or the Committee and all officers or employees of the Company acting
on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such
action, determination or interpretation.
8.3 The Plan is not funded, and all Awards payable hereunder shall be paid
from the general assets of the Company. No provision contained in the
Plan and no action taken pursuant to the provisions of the Plan shall
create a trust of any kind or require the Company to maintain or set
aside any specific funds to pay benefits hereunder. To the extent an
Eligible Employee acquires a right to receive payments from the
Company under the Plan, such right shall be no greater than the right
of any unsecured general creditor of the Company.
8.4 The Company shall have the right to withhold from any Awards payable
under the Plan or other wages payable to an Eligible Employee such
amounts sufficient to satisfy federal, state and local tax withholding
obligations arising from or in connection with the Eligible Employee's
participation in the Plan and such other deductions as may be
authorized by the Eligible Employee or as required by applicable law.
SECTION 9. Effective Date of Plan.
The Plan was originally effective January 1, 2000, and the Plan, as herein
amended, shall be effective January 1, 2005, subject to approval by the
shareholders of the Company.