ex10_2.htm


     

    Ezxhibit 10.2

     


    CHANGE IN CONTROL
AGREEMENT

     

    Agreement,
made this 12th day of November, 2008, by and between Gentiva Health Services,
Inc., a Delaware corporation (the “Company”), and Ronald A. Malone (the
“Executive”).

     

    WHEREAS,
the Executive is a key employee of the Company; and

     

    WHEREAS,
the Board of Directors of the Company (the “Board”) considers the maintenance of
a sound management to be essential to protecting and enhancing the best
interests of the Company and its stockholders and recognizes that the
possibility of a change in control raises uncertainty and questions among key
employees and may result in the departure or distraction of such key employees
to the detriment of the Company and its stockholders; and

     

    WHEREAS,
the Board wishes to assure that it will have the continued dedication of the
Executive and the availability of his or her advice and counsel, notwithstanding
the possibility, threat or occurrence of a bid to take over control of the
Company, and to induce the Executive to remain in the employ of the Company;
and

     

    WHEREAS,
the Executive and the Company previously entered into a Change in Control
Agreement dated March 22, 2004; and

     

    WHEREAS,
the Executive and the Company wish to amend and restate the Change in Control
Agreement as set forth herein; and

     

    WHEREAS,
the Executive is willing to continue to serve the Company taking into account
the provisions of this Agreement;

     

    NOW,
THEREFORE, in consideration of the foregoing, and the respective covenants and
agreements of the parties herein contained, the parties agree as
follows:

     

    1. Operation and Term of
Agreement.  This Agreement shall commence on the date set forth
above and shall terminate on December 31, 2009 unless this Agreement is
terminated earlier, as set forth below; provided, however, that in the
event of a Change in Control of the Company and a termination of the Executive’s
employment by the Company not for Cause or a termination by the Executive for
Good Reason during the term of this Agreement, this Agreement shall remain in
effect until all of the obligations of the parties hereunder are
satisfied.  Notwithstanding the foregoing, prior to a Change in
Control this Agreement shall immediately terminate upon termination of the
Executive’s employment, except in the case of such termination under
circumstances set forth in the last paragraph of Section 4 below.

     

    2. Change in Control;
Protection Period.  A “Change in Control” shall be deemed to
occur on the date that any of the following events occur:

     

    (a) any
person or persons acting together which would constitute a “group” for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) (other than the Company or any subsidiary and other than
Permitted Holders) shall beneficially own (as defined in Rule 13d-3 of the
Exchange Act), directly

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    or
indirectly, at least 25% of the total voting power of all classes of capital
stock of the Company entitled to vote generally in the election of the
Board;

     

    (b) either
(i) Current Directors (as herein defined) shall cease for any reason to
constitute at least a majority of the members of the Board (for these purposes,
a “Current Director” shall mean any member of the Board as of the date set forth
in the first paragraph of this Agreement, and any successor of a Current
Director whose election, or nomination for election by the Company’s
shareholders, was approved by at least two-thirds of the Current Directors then
on the Board) or (ii) at any meeting of the shareholders of the Company called
for the purpose of electing directors, a majority of the persons nominated by
the Board for election as directors shall fail to be elected;

     

    (c) consummation
of (i) a plan of complete liquidation of the Company, or (ii) a merger or
consolidation of the Company (A) in which the Company is not the continuing or
surviving corporation (other than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of common stock of the Company
(the “Common Stock”) outstanding immediately prior to the effectiveness thereof
are changed into common stock of the subsidiary) or (B) pursuant to which the
Common Stock is converted into cash, securities or other property, except a
consolidation or merger of the Company in which the holders of the Common Stock
immediately prior to the consolidation or merger have, directly or indirectly,
at least a majority of the common stock of the continuing or surviving
corporation immediately after such consolidation or merger or in which the Board
immediately prior to the merger or consolidation would, immediately after the
merger or consolidation, constitute a majority of the board of directors of the
continuing or surviving corporation; or

     

    (d) consummation
of a sale or other disposition (in one transaction or a series of transactions)
of all or substantially all of the assets of the Company.

     

    Notwithstanding
the foregoing, none of the events set forth in clauses (a) through (d) above in
the definition of Change in Control shall constitute a “Change in Control”
unless such event is also a “change in control event” as defined in Treas. Reg.
§ 1.409A-3(i)(5).

     

    For
purposes of this Section 2 under this Agreement, “Permitted Holders” shall mean
Miriam Olsten, Stuart Olsten, and Cheryl Olsten, and each of their spouses,
their lineal descendants and their estates and their Affiliates or Associates
(as defined in Rule 12b-2 of the Exchange Act) (collectively the “Olsten
Stockholders”), so long as the Olsten Stockholders beneficially own 20% or less
of the voting power of all classes of capital stock of the Company entitled to
vote generally in the election of the Board.

     

    A
“Protection Period” shall be the period beginning on the date of a Change in
Control and ending on December 31, 2009.

     

    3. Termination Following Change
in Control.  The Executive shall be entitled to the benefits
provided in Section 4 hereof if, within a Protection Period, the Executive’s
employment by the Company shall be terminated (a) by the Company not
for

     


    
      
         


      

      
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    “Cause”
and not due to the Executive’s death or “Disability”, or (b) by the Executive
for “Good Reason.”

     

    (i) Disability.  The
Executive’s employment shall be deemed to have terminated because of a
“Disability” if the Executive applies for and is determined to be eligible to
receive disability benefits under the Company’s long-term disability plan or
program, or, in the absence of such a plan or program, as defined in Section 22
of the Internal Revenue Code of 1986, as amended (the “Code”).

     

    (ii) Cause.  Termination
by the Company of the Executive’s employment for “Cause” shall mean termination
due to (A) the Executive’s conviction of a felony, or (B) any act of willful
fraud, dishonesty or moral turpitude.

     

    (iii) Without
Cause.  The Company may terminate the employment of the
Executive without Cause during a Protection Period only by giving the Executive
written notice of termination to that effect.  In that event, the
Executive’s employment shall terminate on the last day of the month in which
such notice is given (or such later date as may be specified in such notice),
and the benefits set forth in Section 4 hereof shall be provided to the
Executive.

     

    (iv) Good
Reason.  For purposes hereof, “Good Reason” shall mean, unless
remedied by the Company within thirty (30) days after the receipt of written
notice from the Executive as provided below or consented to in writing by the
Executive:

     

    (A) a
reduction by the Company in the Executive’s annual base salary (other than any
reduction therein which is in proportion to reductions in the base salaries of
all of the Company’s executive officers, unless, however, such proportionate
reduction exceeds 20% of the Executive’s annual base salary);

     

    (B) there has
occurred a failure by the Company to maintain plans providing benefits not
materially less favorable than those provided by any benefit or compensation
plan (including, without limitation, any incentive compensation plan, bonus plan
or program, retirement, pension or savings plan, stock option plan, restricted
stock plan, life insurance plan, health and dental plan and disability plan) in
which the Executive is participating immediately before the beginning of the
Protection Period, or the Company has taken any action which would adversely
affect the Executive’s participation in or reduce the Executive’s benefits
(other than stock option or restricted stock grants) under any of such plans or
deprive the Executive of any material fringe benefit enjoyed by the Executive
immediately before the beginning of the Protection Period, or the Company has
failed to provide the Executive with the number of paid vacation days to which
he would be entitled in accordance with the normal vacation policy of the
Company as in effect immediately before the beginning of the Protection Period;
provided, however, that a
reduction in benefits under the Company’s taxqualified retirement, pension or
savings plans or its life insurance plan, health and dental plan, disability
plans or other insurance plans which reduction applies

     


    
      
         


      

      
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    equally
to all participants in the plans and has a de minimis effect on the
Executive shall not constitute “Good Reason” for termination by the
Executive;

     

    (C) a
material diminution in the Executive’s title, positions, duties and
responsibilities from those described in Section 2 of the Executive’s Employment
Agreement with the Company dated of even date herewith (the “Employment
Agreement”) as in effect on the date of the Change in Control (other than as
permitted under the Employment Agreement) or the assignment by the Company to
the Executive of duties and responsibilities that are materially inconsistent
with his position;

     

    (D) a failure
by the Company to assign to the Executive the duties, responsibilites and
obligations customarily assigned to individuals serving as chairman of the board
of directors of comparable companies;

     

    (E) a
material breach by the Company of the Employment Agreement;

     

    (F) the
Company has failed to obtain the assumption of the obligations contained in this
Agreement by any successor as contemplated in Section 9(c) hereof;
or

     

    (G) there
occurs any purported termination of the Executive’s employment by the Company
without Cause which is not effected pursuant to a written notice of termination
as described in subsection (iii) above.

     

    The
Executive shall exercise his right to terminate employment for Good Reason by
giving the Company a written notice of termination specifying in reasonable
detail the circumstances constituting such Good Reason, and the Company will
have a period of thirty (30) days from receipt of such written notice during
which it may remedy the condition.  In the event the Company fails to
remedy the condition within such period, the Executive’s employment shall
terminate immediately following the end of such period.

     

    A
termination of employment by the Executive within a Protection Period shall be
for Good Reason if one of the occurrences specified in this subsection (iv)
shall have occurred, notwithstanding that the Executive may have other reasons
for terminating employment, including employment by another employer which the
Executive desires to accept.

     

    4. Benefits Upon Termination
Within Protection Period.  If, within a Protection Period, the
Executive’s employment by the Company shall be terminated (a) by the Company not
for Cause and not due to the Executive’s death or Disability, or (b) by the
Executive for Good Reason, the Executive shall be entitled to the benefits
provided for below (and the Executive shall not be entitled to severance
benefits otherwise payable under the Executive’s Employment Agreement with the
Company or under any other severance plan or policy of the
Company):

     

    (i) The
Company shall pay to the Executive (A) base salary at the rate then in
effect through the date of the Executive’s termination of employment in
accordance with the standard payroll practices of the Company, and (B) base
salary in lieu of vacation ac-

     


    
      
         


      

      
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    crued to
the date on which his employment terminates, which shall be paid, subject to
Section 10 below, 10 business days after the date of such termination of
employment;

     

    (ii) The
Company shall pay to the Executive an amount in cash equal to two and one half
(2.5) times the sum of (A) the Executive’s annual base salary in effect
immediately prior to the date of the Executive’s termination of employment or
the date of the Change in Control (whichever is higher), and (B) the higher of
(x) the Executive’s target annual bonus for the year that includes the date of
the Executive’s termination of employment or (y) the Executive’s target annual
bonus for the year that includes the date of the Change in Control; and such
amount shall be paid, subject to Section 10 below, in a lump sum
10 business days after the date of such termination of
employment;

     

    (iii) The
Company shall continue to cover the Executive and his dependents under, or
provide the Executive and his dependents with insurance coverage no less
favorable than, the Company’s life, disability, health, dental or other employee
welfare benefit plans or programs (as in effect on the day immediately preceding
the Protection Period or on the date of termination of his employment, whichever
is more favorable to the Executive) for a period equal to the lesser of (x) two
years following the date of termination or (y) until the Executive is provided
by another employer with benefits substantially comparable to the benefits
provided by such plans or programs; provided, however, that the
provision of this benefit shall be contingent upon the cooperation of the
Executive (or his dependent, as applicable) in any reasonable request by the
Company to facilitate the provision of such benefit, including responding to
questionnaires and submitting to minimally intrusive medical examinations; and,
so long as the Executive has not become eligible for substantially similar
health benefit coverage from a subsequent employer, for the period beginning on
the second anniversary of the date of termination of employment and ending on
the earlier of the date the Executive is eligible for substantially similar
health benefit coverage from a subsequent employer or the date he becomes
eligible for Medicare, the Company will reimburse the Executive’s premium cost
for health benefit plan coverage (to the extent such coverage is substantially
similar to the coverage provided from time to time under the medical, dental and
vision care plans of the Company for senior executives of the Company) up to a
monthly amount equal to the sum of (i) the monthly contribution the Company
would have made toward the premium cost of such coverage had the Executive
remained covered under the Company’s medical, dental and vision care plans, and
(ii) $417, and such reimbursement shall be made within thirty (30) business days
following presentment to the Company by the Executive of a receipt for such
payment of such premiums by him;

     

    (iv) All
options to purchase Company stock held by the Executive and all restricted
shares of Company stock, restricted Company share units and other equity-based
compensation awards held by the Executive shall become immediately vested in
full upon such termination of employment, and all such stock options shall be
exercisable for three years following such termination of employment (but not
beyond the original full term of the stock option); and

     

    (v) All of
the Executive’s benefits accrued under the pension, retirement, savings and
deferred compensation plans of the Company shall become vested in
full;

     


    
      
         


      

      
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    provided, however, that to the
extent such accelerated vesting of benefits cannot be provided under one or more
of such plans consistent with applicable provisions of the Code, such benefits
shall be paid to the Executive outside the applicable plan in a lump sum,
subject to Section 10 below, 10 business days after the date of termination
of employment; provided, further,
however, that, to the extent any such unvested benefit constitutes
deferred compensation for purposes of Section 409A of the Code, the payment of
such deferred compensation shall instead be made at the time it was otherwise
scheduled to be paid under the applicable plan.

     

    Anything
in this Agreement to the contrary notwithstanding, the Executive shall be
entitled to the benefits described in this Section 4, if the Executive’s
employment with the Company is terminated by the Company prior to
December 31, 2009 (other than for Cause) and within one year prior to the
date on which a Change in Control occurs, and it is reasonably demonstrated that
such termination (i) was at the request of a third party who has taken steps
reasonably calculated or intended to effect a Change in Control or (ii)
otherwise arose in connection with or anticipation of a Change in Control. In
such event, amounts will be payable hereunder only following, and, subject to
Section 10 below, 10 business days after, the Change in
Control.  Any amount so payable hereunder shall be reduced by the
amount of severance benefits paid to the Executive under the Employment
Agreement or under any other severance agreement or plan of the
Company.

     

    5. Non-exclusivity of
Rights.  Except as expressly set forth herein, this Agreement
shall not prevent or limit the Executive’s continuing or future participation in
any benefit, bonus, incentive or other plans, practices, policies or programs
provided by the Company or any of its subsidiaries and for which the Executive
may qualify, nor shall it limit or otherwise affect such rights as the Executive
may have under any stock option or other agreements with the Company or any of
its subsidiaries.  Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, practice, policy or
program of the Company or any of its subsidiaries at or subsequent to the date
of termination of the Executive’s employment shall be payable in accordance with
such plan, practice, policy or program.

     

    6. Full-Settlement; Legal
Expenses.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement.  The Company agrees to pay all legal fees and expenses
which the Executive may reasonably incur as a result of any dispute or contest
by or with the Company or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement (including as a result of any
contest by the Executive about the amount of any payment hereunder) if the
Executive substantially prevails in the dispute or contest.  Following
the final determination of the dispute in which the Executive has substantially
prevailed, the Company shall reimburse all such reasonable costs within 10 days
following written demand therefor (supported by documentation of such costs) by
the Executive, and the Executive shall make such written demand within 60 days
following the final determination of the dispute; provided, however,
that such payment shall

     


    
      
         


      

      
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    be made
no later than on or prior to the end of the calendar year following the calendar
year in which the cost is incurred.  Notwithstanding the foregoing, in
the event a final determination of the dispute has not been made by
December 20 of the year following the calendar year in which the cost is
incurred, the Company shall, within 10 days after such December 20,
reimburse such reasonable costs (supported by documentation of such costs)
incurred in the prior taxable year; provided, however,
that the Executive shall return such amounts to the Company within 10 business
days following the final determination if the Executive did not substantially
prevail in the dispute.  The amount of any expenses eligible for
payment under this Section 6 during a calendar year will not affect the amount
of any expenses eligible for payment under this Section 6 in any other
taxable year.  In any such action brought by the Executive for damages
or to enforce any provisions of this Agreement, the Executive shall be entitled
to seek both legal and equitable relief and remedies, including, without
limitation, specific performance of the Company’s obligations hereunder, in his
sole discretion.

     

    7. Excise Tax
Gross-Up.

     

    (a) In the
event it shall be determined that any payment, award, benefit or distribution
(including, without limitation, the acceleration of any payment, award,
distribution or benefit), by the Company or any of its affiliates to or for the
benefit of the Executive (whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 7) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Code or any corresponding provisions of state or local
tax law, or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
(including any Excise Tax, income tax or employment tax) imposed upon the
Gross-Up Payment and any interest or penalties imposed with respect to such
taxes, the Executive retains from the Gross-Up Payment an amount equal to the
Excise Tax imposed upon the Payments.  Notwithstanding the foregoing
provisions of this Section 7(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the portion of the Payments that would
be treated as “parachute payments” under Section 280G of the Code does not
exceed by more than $25,000 the greatest amount (the “Safe Harbor Amount”) that
could be paid to the Executive such that the receipt of Payments would not give
rise to any Excise Tax, then no Gross-up Payment shall be made to the Executive
and the amount payable under Section 4(ii) of this Agreement shall be
reduced so that the Payments, in the aggregate, are reduced to the Safe Harbor
Amount.  For purposes of reducing the payments to the Safe Harbor
Amount, only amounts payable under this Agreement (and no other Payments) shall
be reduced. If the reduction of the amounts payable under this Agreement would
not result in a reduction of the Payments to the Safe Harbor Amount, no amounts
payable under this Agreement shall be reduced pursuant to this Section
7.  Notwithstanding any other provision in this Section 7, in the
event a Change in Control occurs after March 24, 2009 (other than pursuant
to an acquisition agreement entered into by the Company and the acquiror on or
prior to March 24, 2009), for purposes of this Section 7 the amount of any
Gross-Up Payment resulting from such Change in Control shall be no greater
than $1 million.

     


    
      
         


      

      
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    (b) Subject
to the provisions of Section 7(c), all determinations required to be made under
this Section 7, including the determination of whether a Gross-Up Payment is
required and of the amount of any such Gross-up Payment, shall be made by the
outside firm of auditors regularly used by the Company to audit its financial
statements at the time of the Change in Control (the “Accounting Firm”), which
shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days after the receipt of notice from the Company
that the Executive has received a Payment, or such earlier time as is requested
by the Company.  The initial Gross-Up Payment, if any, as determined
pursuant to this Section 7(b), shall be paid to the Executive (or for the
benefit of the Executive to the extent of the Company’s withholding obligation
with respect to applicable taxes) no later than the later of (i) the due date
for the payment of any Excise Tax, and (ii) the receipt of the Accounting Firm’s
determination.  Any determination by the Accounting Firm meeting the
requirements of this Section 7(b) shall be binding upon the Company and the
Executive.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder.  In the event
that the Company exhausts its remedies pursuant to Section 7(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.  The fees and disbursements of the
Accounting Firm shall be paid by the Company.

     

    (c) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
a Gross-Up Payment. Such notification shall be given as soon as practicable but
not later than ten business days after the Executive receives written notice of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which it gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due).  If
the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

     

    (i) give the
Company any information reasonably requested by the Company relating to such
claim,

     

    (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,

     

    (iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and

     

    (iv) permit
the Company to participate in any proceedings relating to such
claim;

     


    
      
         


      

      
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    provided, however, that the
Company shall bear and pay directly all fees, costs and expenses (including
additional interest and penalties, and reasonable attorneys’ fees) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax, income tax or employment
tax, including interest and penalties with respect thereto, imposed as a result
of such representation and payment of fees, costs and
expenses.  Without limitation on the foregoing provisions of this
Section 7(c), the Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax, income tax or employment tax, including
interest or penalties with respect thereto, imposed with respect to such
advance; and further, provided that any
extension of the statute of limitations relating to the payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested
amount.  Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

     

    (d) If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 7(c), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 7(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 7(c), a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     

    (e) Anything
in this Agreement to the contrary notwithstanding, except as otherwise provided
in Treas. Reg. Section 1.409A-3(i)(1)(v), in no event shall any payment by the
Company pursuant to this Section 7 be made later than the end of the Executive’s
taxable year next following the Executive’s taxable year in which he remits the
related taxes.

     

    8. Confidential
Information.  The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its subsidiaries, and their respective
businesses, which shall have been obtained by the Executive during the
Executive’s employment by the Company or any of its subsidiaries and which has
not become public knowledge (other than by acts of the Executive or his or her
representatives in violation of this Agreement).  After the date of
termination of the

     


    
      
         


      

      
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    Executive’s
employment with the Company, the Executive shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge
or data to anyone other than the Company and those designated by
it.  In no event shall an asserted violation of the provisions of this
Section 8 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.

     

    9. Successors.

     

    (a) This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution.  This Agreement shall inure to
the benefit of and be enforceable by the Executive’s heirs, executors,
administrators, legal representatives or successor(s) in interest.

     

    (b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

     

    (c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  As used
in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

     

    10. Section
409A.  It is intended that this Agreement will comply with
Section 409A of the Code (and any regulations and guidelines issued thereunder)
to the extent the Agreement is subject thereto, and the Agreement shall be
interpreted on a basis consistent with such intent.  If an amendment
of the Agreement is necessary in order for it to comply with Section 409A, the
parties hereto will negotiate in good faith to amend the Agreement in a manner
that preserves the original intent of the parties to the extent reasonably
possible.  Notwithstanding any provision to the contrary in this
Agreement, if the Executive is deemed on the date of his “separation from
service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be a
“specified employee” (within the meaning of Treas. Reg.
Section 1.409A-1(i)), then with regard to any payment that is required to
be delayed pursuant to Section 409A(a)(2)(B) of the Code, such payment shall not
be made prior to the earlier of (i) the expiration of the six (6)-month period
measured from the date of his “separation from service,” or (ii) the date of his
death (the “Delay Period”).  Upon the expiration of the Delay Period,
all payments delayed pursuant to this Section 10 (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid to the Executive in a lump sum together with interest at 1%
above the prime rate (as reported in The Wall Street Journal, Eastern Edition),
as in effect on the first day of the Delay Period, and any remaining payments
due under this Agreement shall be paid in accordance with the normal payment
dates specified for them herein.  Notwithstanding any provision of
this Agreement to the contrary, for purposes of Section 4 above, the
Executive’s employment will be deemed to have terminated on the date of the
Executive’s “separation from service” (within the meaning of Treas. Reg. Section
1.409A-1(h)) with the Company.  No action or failure to act, pursuant
to this Section 10 shall subject the

     


    
      
         


      

      
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    Company
to any claim, liability, or expense, and the Company shall not have any
obligation to indemnify or otherwise protect the Executive from the obligation
to pay any taxes, interest or penalties pursuant to Section 409A of the
Code.  With respect to any reimbursement or in-kind benefit
arrangements of the Company and its subsidiaries that constitute deferred
compensation for purposes of Section 409A of the Code, the following
conditions shall be applicable: (i) the amount eligible for reimbursement,
or in-kind benefits provided, under any such arrangement in one calendar year
may not affect the amount eligible for reimbursement, or in-kind benefits to be
provided, under such arrangement in any other calendar year (except that the
health and dental plans may impose a limit on the amount that may be reimbursed
or paid if such limit is imposed on all participants), (ii) any
reimbursement must be made on or before the last day of the calendar year
following the calendar year in which the expense was incurred, and (iii) the
right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit.  Whenever payments under this Agreement
are to be made in installments, each such installment shall be deemed to be a
separate payment for purposes of Section 409A.

     

    11. Miscellaneous.

     

    (a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without reference to principles of conflict of laws thereof.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect.  This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

     

    (b) All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

     

    If to the
Executive:


     

    Ronald A.
Malone

     

    To the
last address of Executive on record with the Company

     

    If to the
Company:


     

    Gentiva
Health Services, Inc.

    3
Huntington Quadrangle, 2S

    Melville,
NY 11747


     

    Attention:  Chairman,
Compensation Committee

     

    or to
such other address as either party shall have furnished to the other in writing
in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     

    (c) The
invalidity or unenforceability of any provision of this Agreement shall, not
affect the validity or enforceability of any other provision of this
Agreement.

     


    
      
         


      

      
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    (d) The
Company may withhold from any amounts payable under this Agreement such Federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.

     

    (e) The
Executive’s failure to insist upon strict compliance with any provision hereof
shall not be deemed to be a waiver of such provision or any other provision
thereof.

     

    (f) Any
dispute or controversy arising under or in connection with this Agreement shall
be resolved by binding arbitration.  This arbitration shall be held in
New York City and except to the extent inconsistent with this Agreement, shall
be conducted in accordance with the Expedited Employment Arbitration Rules of
the American Arbitration Association then in effect at the time of the
arbitration, and otherwise in accordance with principles which would be applied
by a court of law or equity.  The Executive and the Company shall be
entitled to discovery in any such proceeding.  All fees, costs and
expenses of the arbitration, with the exception (other than as provided in
Section 6 above) of the Executive’s attorney’s fees, costs and expenses, shall
be borne by the Company.  The arbitrator shall be acceptable to both
the Company and the Executive.  If the parties cannot agree on an
acceptable arbitrator, the dispute shall he held by a panel of three
arbitrators, one appointed by each of the parties and the third appointed by the
other two arbitrators.  The arbitrator(s) shall not have the power to
commit substantive errors of law, legal reasoning or fact, shall set forth their
factual and legal reasoning in any award or determination, and any such award or
determination may be vacated or corrected as a result.

     

    (g) This
Agreement contains the entire understanding of the Company and the Executive
with respect to the subject matter hereof but, except as specifically provided
in Section 4 hereof does not supersede or override the provisions of (i) any
stock option, employee benefit or other plan, program, policy or practice in
which Executive is a participant or under which the Executive is a beneficiary,
or (ii) the Employment Agreement of even date herewith between the Executive and
the Company; provided, however, that this
Agreement does supersede and replace any prior severance agreement (but not the
Employment Agreement) and change in control agreements between the Company and
the Executive, including specifically all such agreements entered into by the
Executive and the Company as of March 14, 2000 and those entered into on June
14, 2002 and March 22, 2004.

     

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    IN
WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents
to be executed as of the day and year first above written.

     

    
      	By: 
      /s/ Ronald A. Malone        
	
                     
      Name:  Ronald A. Malone

                     
      Title:    Chief Executive Officer and

                                  
      Chairman of the Board

            
	 
      
	 
	 
	
              GENTIVA
      HEALTH SERVICES, INC.

            
	 
	
              By: 
      /s/ Stuart R. Levine        

                     
      Name:  Stuart R. Levine

                     
      Title:    Chair, Compensation
  Committee

            


    

    


     

     

     

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