a6087067ex10-4.htm


    EXHIBIT
10.4

    


    CHEMED
CORPORATION

    SENIOR
EXECUTIVE SEVERANCE POLICY

    AS AMENDED
JULY 9, 2009

    


    


    Chemed Corporation hereby establishes
the Chemed Corporation Senior Executive Severance Policy (“the
Policy”).

     

    1.  PARTICIPATION.  Participants
in the Policy shall consist of those officers designated from time to time on
Attachment A to this Policy by the Compensation/Incentive Committee of the Board
of Directors, as may be approved by the Board of Directors.  The
Compensation/Incentive Committee and/or the Board shall have the ability to add
or remove Participants at its discretion.

     

    2.  TERMINATION OF
EMPLOYMENT.

     

    §2.1  Termination of
Employment.  The employment of a Participant shall terminate
upon the occurrence of any of the following:

     

    (a)         The
death of the Participant;

     

    (b)         The
termination of the Participant's employment due to the Participant's disability
pursuant to §2.2;

     

    (c)         The
termination by the Company of the Participant's employment for Cause pursuant to
§2.3;

     

    (d)         The
retirement of the Participant under a retirement plan of the Company;
or

     

    (e)         The
resignation of the Participant.

     

    The termination by the Company of the
Participant's employment for any reason other than those specified in this §2.1
shall hereinafter be referred to as a termination "Without Cause".

     

    §2.2  Disability.  If,
by reason of physical or mental disability, the Participant is unable to carry
out his or her duties pursuant to this Policy for four (4) consecutive months,
the Participant’s may be terminated by the Company upon two (2) months' written
notice to be given to the Participant 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, the Participant shall recover from such disability
and return to the active discharge of his or her duties, then such notice shall
be of no further force and effect and the Participant's employment shall
continue as if such disability had not occurred. If the Participant shall not so
recover from his or her disability and return to his or her duties, then the
Participant’s services shall terminate at the expiration date of such two (2)
months' notice.  In the event a dispute arises between the Participant
and the Company concerning the Participant's physical or mental ability to
continue or return to the performance of his or her duties as aforesaid, the
Participant shall submit to examination by a competent physician mutually
agreeable to both parties, and such physician's opinion as to the Participant's
ability to so perform will be final and binding.

     

     

    
      
         

      

      
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    §2.3  For
Cause.  The Company may, at any time by written notice to the
Participant, terminate his or her services for Cause.  Such notice
shall specify the event or events and the actions or failure to act constituting
Cause.  “Cause” shall mean,
with respect to a Participant’s termination of employment: (a) the willful
and repeated
failure of the Participant  to perform substantially the Participant’s
duties with Company (other than any such failure resulting from incapacity due
to physical or mental illness); (b) the Participant’s conviction of, or plea of
guilty or nolo contendere to, which through lapse of time or otherwise is not
subject to appeal, a felony which is materially and demonstrably injurious to
Company; or (c) the Participant’s engagement in willful gross misconduct or
gross negligence in connection with his or her employment.

     

    If the basis for discharge is pursuant
to paragraph (c) above, the Participant shall have thirty (30) days from receipt
of the notice of termination for Cause to cure, if curable, 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.

     

    §2.4  Consequences of
Termination.

     

    (a) If the Participant's employment
shall terminate pursuant to any of the provisions of this Article 2, the
Participant’s base salary and all incentive compensation shall cease to accrue
forthwith.

     

    (b)  If the Company shall
terminate the Participant's employment Without Cause, the Company shall pay the
Participant within 10 days of termination but in no event later than the
following March 15 a lump sum amount in cash equal to one and one-half times the
Participant’s then annual base salary plus a lump sum amount in cash equal to
the product of: (i) the average amount of the Participant’s annual incentives
under the Company’s annual incentive plan paid or payable for the last three
full fiscal years prior to termination; and (ii) a fraction, the numerator of
which is the number of days in the fiscal year through the date of termination
and the denominator of which is 365.  The Participant shall also be
eligible to participate in the Company’s welfare benefits plans such as health
insurance, life insurance, long-term care insurance, and long-term disability
benefits plans for twelve months following termination, at the then current
employee contribution rates; provided that if the Participant is precluded from
continuing his or her participation in any applicable plan, program, or
arrangement, the Participant shall be provided with the after-tax cost of
continuation of such coverage, including premiums under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, (“COBRA Premiums”), for the
Participant with respect to the benefits provided under such plan, program, or
arrangement, paid as a lump sum within 10 days of termination, but in no event
later than the following March 15.  If the Participant becomes
reemployed with another employer and is eligible to receive health insurance, life
insurance, long-term care insurance or long-term disability coverage under
another employer-provided plan (regardless of whether the Participant elects
such coverage), the welfare benefits provided pursuant to this Policy shall be
secondary to those provided under such other plan.

     

    
      
         

      

      
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    (c) In the event that the Participant’s
employment shall terminate pursuant to any of the provisions of this Article 2,
the rights of the Participant under any incentive compensation plan of the
Company, under any executive or employee benefit plans or arrangements, or
otherwise shall be determined, subject to this Article 2, 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.

     

    (d) If the Participant’s employment
shall terminate pursuant to §2.1(a), (b), or (d), the Company shall pay the
Participant, during the period from the  183rd to
the 190th day
following termination, in lieu of any amounts that may be due and payable under
the Company’s annual incentive plan for the fiscal year of termination a lump
sum amount in cash equal to the product of: (i) the average amount of the
Participant’s annual incentives under the Company’s annual incentive plan paid
or payable for the last three full fiscal years prior to termination; and (ii) a
fraction, the numerator of which is the number of days in the fiscal year
through the date of termination and the denominator of which is
365.

     

    (e) If the Participant’s employment
shall terminate pursuant to §2.1(e) or if the Company shall terminate
Participant’s employment with Cause pursuant to §2.1(c), Participant’s annual
incentive bonus shall then be forfeited.

     

    (f) Participant shall not be required
to offset against amounts due from the Company under this Article 2 for any
salary, bonus or other benefits (other than welfare benefits described above)
received by the Participant from a third-party, and the Participant shall be
under no duty to mitigate by seeking or accepting another position.

     

    (g) Any amounts paid or benefits
received under this Policy are conditioned upon execution of a waiver of
liability in favor of the Company executed by the Participant, in the form
approved by the Company’s counsel.

     

    (h) Any amounts paid or benefits
received under this Policy are also conditioned, other than a termination under
Section 2.1(a), upon execution of the following in a form approved by the
Company’s counsel: (i) an agreement prohibiting directly or indirectly
publishing or disclosing any confidential information of the Company or any of
its affiliates, or using such confidential information for the Participant’s own
use or making it available to others; (ii) a one-year post termination
non-compete agreement under which the Participant will not directly or
indirectly engage in or become interested in any business providing or arranging
for any products or services that directly or indirectly are in competition with
the Company or any of its subsidiaries; and (iii) an agreement prohibiting
solicitation during such one-year period of the employment of any employees or
other personnel providing services to the Company or any of its subsidiaries or
soliciting the business of any customer of the Company or any of its
subsidiaries.

     

    
      
         

      

      
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    3. APPLICATION OF SECTION 409A
OF THE INTERNAL REVENUE CODE.

     

    §3.1  In the event that
any payment or benefit to the Participant or for the Participant’s benefit paid
or payable or distributed or distributable under this Policy (“Payment”), would
be subject to the excise tax imposed by Section 409A of the Internal Revenue
Code (“Code”), or any interest or penalties are incurred by the Participant with
respect to such excise tax (collectively, “Excise Tax”), the Participant will be
entitled to receive an additional payment (“Gross-Up Payment”) in an amount such
that after payment by the Participant of all taxes (including any income or
payroll tax, interest or penalties imposed with respect to such taxes and the
Excise Tax, other than interest and penalties imposed by reason of the
Participant’s failure to file timely a tax return or pay taxes shown due on the
Participant’s return, and including any Excise Tax imposed upon the Gross-Up
Payment), the Participant retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.

     

    An initial determination as to
whether and in what amount a Gross-Up Payment is required will be made at the
Company’s expense by an accounting firm of recognized national standing selected
by the Company (“Accounting Firm”).  The Accounting Firm will provide
its determination (“Determination”), together with detailed supporting
calculations and documentation, to the Company and the Participant within five
days of the date of termination, if applicable, or such other time as requested
by the Company or by the Participant (provided the Participant reasonably
believes that any of the Payments may be subject to the Excise
Tax).  If the Accounting Firm determines that no Excise Tax is payable
by the Participant with respect to a Payment or Payments, it will furnish the
Participant an opinion reasonably acceptable to the Participant that no Excise
Tax will be imposed.  Within 10 days of the delivery of the
Determination, the Participant will have the right to dispute the Determination
(the “Dispute”).  The Gross-Up Payment, if any, as determined pursuant
to this Section will be paid by the Company to the Participant within 5 days of
the receipt of the Determination.  The existence of the Dispute will
not in any way affect the Participant’s right to receive the Gross-Up Payment in
accordance with the Determination.  If there is no Dispute, the
Determination will be binding upon the Company and the Participant, subject to
the following paragraph.

     

    
      
         

      

      
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    As a result of uncertainty in the
application of Section 409A of the Code, it is possible that a Gross-Up Payment
will be paid which should not be paid (“Excess Payment”) or that a Gross-Up
Payment which should be paid will not be paid (“Underpayment”).  An
Underpayment will be deemed to have occurred (i) upon notice to the Participant
from any governmental taxing authority that the Participant’s tax liability
(whether in respect of the Participant’s current taxable year or in respect of
any prior taxable year) may be increased by reason of the imposition of the
Excise Tax on a Payment or Payments with respect to which the Company has failed
to make a sufficient Gross-Up Payment, (ii) upon a determination by a court,
(iii) by reason of a determination by the Company (which will include the
position taken by the Company on its federal income tax return) or (iv) upon the
resolution of the Dispute to the Participant’s satisfaction. If an Underpayment
occurs, the Participant will promptly notify the Company and the Company will
promptly, but in any event at least 5 days prior to the date on which the
applicable government taxing authority has requested payment, pay to the
Participant an additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties (other than interest and penalties
imposed by reason of the Participant’s failure to file timely a tax return or
pay taxes shown due on the Participant’s return) imposed on the
Underpayment.

     

    An Excess Payment will be deemed to
have occurred upon a Final Determination (as hereinafter defined) that the
Excise Tax will not be imposed upon a Payment or Payments (or portion thereof)
with respect to which the Participant had previously received a Gross-Up
Payment.  A “Final Determination” will be deemed to have occurred when
the Participant has received from the applicable government taxing authority a
refund of taxes or other reduction in the Participant’s tax liability by reason
of the Excise Payment and upon either (x) the date a determination is made by,
or an agreement is entered into with, the applicable governmental taxing
authority which finally binds the Participant and such taxing authority, or if a
claim is brought before a court, the date a final determination has been made by
such court and either all appeals have been finally resolved or the time for all
appeals has expired or (y) the statute of limitations with respect to the
Participant’s applicable tax return has expired.  If an Excess Payment
is determined to have been made, the Participant will pay to the Company (but
not less than 10 days after the determination of such Excess Payment and written
notice has been delivered to the Participant) the amount of the Excess Payment
plus interest at an annual rate equal to the Applicable Federal Rate provided
for in Section 1274(d) of the Code from the date the Gross-Up Payment was paid
until the date of repayment.  The Participant will use reasonable
cooperative efforts at the request of the Company to assist in the determination
of the amount of any Excess Payment or Underpayment made to the Participant
pursuant to this Policy.

     

    
      
         

      

      
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    4. §3.2  All Payments are
intended by Company and Employee to meet the requirements of Section 409A of the
Code.LEGAL FEES AND
EXPENSES, ARBITRATION.  Each party shall pay their own legal
fees incurred in connection with any enforcement of rights under this
Policy.  All disputes arising hereunder shall be subject to
arbitration according to the rules of the American Arbitration
Association.  The Company and the Participant shall share equally in
any third party costs of such arbitration.

     

    5. GOVERNING
LAW.  This Policy, the rights and obligations hereunder, and
any related claims shall be governed by and construed in accordance with the
laws of the State of Ohio.

     

    
      
         

      

      
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    Attachment
A

    


    


    Senior
Executives

    


    


    


    1.         T.
C. Hutton

    


    2.         N.
C. Dallob

    


    3.         A.
V. Tucker

    


    4.         T.
J. Reilly

    


    5.         L.
A. Dittman

    


    6.         S.
S. Lee

    


    7.         R.
L. Arquilla

    


    8.         G.
H. Sander

    


    9.         R.
P. Goldschmidt

    


    10.         D.
Lawe

    


    11.         P.
Pettit

    


    12.         D.
A. Wester

     

    
 

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