EXHIBIT 10.14
RES-CARE, INC.
00000 XXXX XXXXXXX XXXX
XXXXXXXXXX, XXXXXXXX 00000
(000) 000-0000
January 12, 2005
Xxxxxxx X Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
RE: TERMINATION OF EMPLOYMENT AND AGREEMENT REGARDING CERTAIN CONSULTING
SERVICES
Dear Xxxx:
This letter agreement is being executed by Res-Care, Inc. (the "Company")
and you ("Xxxxxxx") to provide for the parties' agreements regarding the mutual
termination of Xxxxxxx'x employment with the Company and the provision of
certain consulting services by Xxxxxxx for a period of one year thereafter. The
parties hereby agree as follows:
1. The parties acknowledge and agree that that certain Employment
Agreement dated January 13, 2002, as amended, between the Company and Xxxxxxx
(the "Employment Agreement"), terminated by expiration of its term effective as
of December 31, 2004.
2. Xxxxxxx'x employment with the Company terminated effective midnight,
December 31, 2004. Such termination is by expiration of the Employment Agreement
and mutual consent of the parties. The terms and conditions of such termination
and Xxxxxxx'x compensation and obligations in connection with the same shall be
governed by this letter agreement and the surviving provisions of the Employment
Agreement specifically referenced herein.
3. Effective midnight, December 31, 2004, Xxxxxxx hereby resigns as an
officer and director of all of the Res-Care Companies (as defined in the
Employment Agreement). Contemporaneously herewith, Xxxxxxx shall execute the
resignation letter attached hereto as Exhibit A.
4. Not later than January 31, 2005, Xxxxxxx shall execute and deliver to
the Chairman and/or any officer designated by the Chairman, a certificate of
Xxxxxxx'x level of compliance and Xxxxxxx'x knowledge of the level of compliance
by the Company and its subsidiaries with applicable laws, regulations and
Company policies regarding the provision of services to clients and xxxxxxxx to
Xxxxxxx X Xxxxxxx
January 12, 2005
Page 2
its paying agencies substantially in the form attached as Exhibit X. Xxxxxxx
further specifically acknowledges that he is aware that it is the Company's
policy that all employees immediately report to their supervisor, other
management personnel, or the appropriate state and federal authorities, any
activity which is, was, or may be in violation of state or federal laws or the
Company's policies and procedures. Xxxxxxx hereby represents that sufficient
opportunities were made available to him to make such report(s), and that he has
never knowingly witnessed or been a party to any activity in violation of
federal or state laws while employed at the Company. Further, he agrees that he
has observed no violations of Company policies or procedures except to the
extent that he may have already reported the same to the Company in writing. Not
later than January 15, 2006, Xxxxxxx will execute and deliver to the Chairman a
comparable certificate as described in this paragraph 4 with regard to his
knowledge of the operations of the Company and its subsidiaries during the
Consulting Term (as defined in paragraph 8).
5. Not later than January 15, 2006, Xxxxxxx shall return to the Company
any property of the Company or its subsidiaries then in Xxxxxxx'x possession or
control, including without limitation, any Confidential Information (as defined
in the Employment Agreement) and whether or not constituting Confidential
Information, any technical data, performance information and reports, sales or
marketing plans, documents or other records, and any manuals, drawings, tape
recordings, computer programs, discs, and any other physical representations of
any other information relating to the Company, its subsidiaries or affiliates or
to the business conducted by the Company and its subsidiaries or affiliates.
Xxxxxxx hereby acknowledges that any and all of such documents, items, physical
representations and information are and shall remain at all times the exclusive
property of the Company. Xxxxxxx shall also promptly return to the Company any
of the property of the Company described in Section 3(f) of the Employment
Agreement if requested in writing by the Company. The provisions of this
paragraph 5 shall supersede the provisions of Section 6 of the Employment
Agreement.
6. Xxxxxxx is eligible for and may earn a bonus under the Incentive
Program applicable to Xxxxxxx for the calendar year 2004 as provided in Section
3(b) of the Employment Agreement depending upon the satisfaction of the
performance, financial and quality targets applicable to Xxxxxxx and the Company
for such period. If any such bonus is earned, such bonus shall be paid to
Xxxxxxx (subject to applicable withholding) not later than March 31, 2005. The
Company and Xxxxxxx agree that as of December 31, 2004, all of the options
granted to him by the Company, whether pursuant to Section 3(d) of the
Employment Agreement or otherwise, have vested. A copy of the Company stock
option plan that is applicable to its managerial employees and the options
previously granted to Xxxxxxx (the "Stock Plan") is attached hereto as Exhibit
X. Xxxxxxx agrees that except for any amounts payable under this paragraph or
Xxxxxxx'x accrued and unused vacation or paid time off as of December 31, 2004,
Xxxxxxx shall not be entitled to any severance or other payment of any nature in
connection with the termination of his employment. The amount of Xxxxxxx'x
accrued and unused vacation or paid time off shall be paid to Xxxxxxx (subject
to applicable withholding) not later than January 31, 2005.
7. Should Xxxxxxx elect to exercise his option to continue his health care
benefits currently provided by the Company following the termination of his
employment, the continuation
Xxxxxxx X Xxxxxxx
January 12, 2005
Page 3
of such health care benefits, including the payment of premiums for such health
care benefits after December 31, 2004, shall be at Xxxxxxx'x sole expense. The
COBRA election, as regulated by ERISA, shall begin at December 31, 2004,
Xxxxxxx'x last date of official employment.
8. For the period January 1, 2005 and December 31, 2005 (the "Consulting
Term"), Xxxxxxx shall consult with and be generally available to the Company and
its personnel at the request of the Chairman, President and Chief Executive
Officer of the Company ("Chairman"), or the Chairman's designee, as reasonably
necessary to provide consultation, assistance and information regarding (a) the
assets and operations that were formerly a part of the Company's Division for
Youth Services, (b) any obligations of any Res-Care Company under any management
agreement, consulting agreement or other agreement that was previously the
responsibility of the Company's Division for Youth Services, (c) the transition
of management of the assets and operations that were formerly a part of the
Company's Division for Youth Services to the Company's Division for Persons with
Disabilities, (d) personnel matters with regard to employees of any of the
Res-Care Companies that were formerly assigned to the Company's Division for
Youth Services, (e) governmental and other agency relations, and (f) potential
or possible acquisitions relating to and/or dispositions of any of the assets or
operations that were formerly a part of the Company's Division for Youth
Services. Xxxxxxx shall not have responsibility for any operations on behalf of
the Res-Care Companies and shall be engaged in an advisory capacity only. Any
final decision with regard to any matter in connection with the business of the
Res-Care Companies, irrespective of whether the advice of Xxxxxxx has been
solicited or received, shall rest with the Company. Xxxxxxx'x services to the
Company shall be limited to those described in this paragraph 8 and no other or
further engagement has been promised or made except as mutually agreed by the
parties in writing.
9. In consideration of Xxxxxxx'x consulting services as described in
paragraph 8 of this letter agreement, and provided that Xxxxxxx complies with
his continuing obligations in Section 7 of the Employment Agreement, the Company
shall pay to Xxxxxxx the aggregate sum of $210,000 during the Consulting Term in
twenty-four (24) substantially equal semi-monthly installments of $8,750 on or
before the 15th and last day of each calendar month during the Consulting Term.
In all matters relating to the consulting services rendered by Xxxxxxx as
provided in paragraph 8 hereof, Xxxxxxx will be acting as an independent
contractor and neither Xxxxxxx nor any employee or agent of Xxxxxxx will be an
employee of any Res-Care Company within the meaning or application of any
federal, state or local income or unemployment insurance laws, or old age
benefits law, or other social security laws or worker's compensation or
industrial law, or otherwise. Xxxxxxx will be responsible for and indemnify and
hold the Company harmless from and against any and all federal, state and local
income taxes (including withholding taxes), social security taxes and/or
Medicare taxes with respect to the payments described in this paragraph 9.
Xxxxxxx will timely pay all of such taxes in compliance with applicable laws and
regulations.
10. Xxxxxxx hereby agrees that his covenants in Section 7 of the
Employment Agreement shall survive the expiration of the Employment Agreement,
the execution of this letter agreement and the future expiration of the
Consulting Term in accordance with the terms and provisions of such Section 7.
Notwithstanding the forgoing, the provision of the consulting services in
accordance with paragraph 8 hereof shall not violate any of the covenants in
such Section 7 and all Confidential
Xxxxxxx X Xxxxxxx
January 12, 2005
Page 4
Information provided to or otherwise in the possession of Xxxxxxx relating to
such services shall be subject to his confidentiality obligations in such
Section 7.
11. As additional consideration for the covenants and agreements of
Xxxxxxx herein, the Company, for itself and all of the other Res-Care Companies,
and for their successors, affiliates, employees, officers, directors and
assigns, hereby fully and completely release, acquit and forever discharge
Xxxxxxx, Xxxxxxx'x heirs, successors, assigns, and legal representatives
(collectively, the "Xxxxxxx Indemnitees"), from all claims, liabilities, demands
and causes of action which they may have or claim to have against the Xxxxxxx
Indemnitees, known or unknown; however, this release does not waive any claims
based upon fraud, gross misrepresentation or illegal conduct and does not waive
any rights or claims which may arise after the date that this letter agreement
is signed by the parties and does not release Xxxxxxx'x obligations under this
letter agreement or affect the Company's rights hereunder.
12. As additional consideration for the covenants and agreements of the
Company herein, Xxxxxxx, for himself and his heirs, successors, assigns, and
legal representatives, hereby fully and completely releases, acquits and forever
discharges the Company and all of the other Res-Care Companies, as well as the
employees, officers and directors of any of them (collectively, the "Company
Parties") from all claims, liabilities, demands and causes of action which
Xxxxxxx may have or claim to have against the Company Parties. This includes but
is not limited to a release of any rights or claims that Xxxxxxx may have under
the Age Discrimination in Employment Act, which prohibits age discrimination in
employment; Title VII of the Civil Rights Act of 1964, which prohibits
discrimination in employment based on race, color, national origin, religion or
sex; the Equal Pay Act, which prohibits paying males and females unequal pay for
equal work; the Americans with Disabilities Act, and any other federal, state or
local laws or regulations. This also includes a release by Xxxxxxx of any
contract, tort or wrongful discharge claims. This release covers claims that are
both known and unknown. This release does not waive any rights or claims which
might arise after the date that this letter agreement is signed by the parties
and does not release the obligations of the Company under this letter agreement,
or affect Xxxxxxx'x rights hereunder. This letter agreement also does not waive
any rights or claims, if any, that Xxxxxxx may have to Xxxxxxx'x vested stock
options, which options shall be governed by, and exercisable for a limited
period of time after December 31, 2004 in accordance with, the terms of the
Stock Plan and any Award Agreement (as defined in the Stock Plan) applicable
thereto, or any rights or claims, if any, that Xxxxxxx may have to 401k plan or
pension benefits under the Company's retirement plans, or any right to any
earned Performance Incentive for the calendar year 2004. This letter agreement
does not waive the right to file a charge with or participate in any
investigation conducted by the Equal Employment Opportunity Commission (the
"EEOC") but Xxxxxxx agrees that he does waive his right, if any, to any monetary
recovery if the EEOC pursues any claim on his behalf.
13. Xxxxxxx agrees never to make any claim or institute any suit,
complaint, proceeding, grievance or action of any sort in any court,
administrative agency or tribunal arising from his employment with the Company
or any other occurrence prior to his signing this letter agreement. Xxxxxxx
hereby waives any right to recover any relief as a result of any claims or
proceedings made on his behalf.
Xxxxxxx X Xxxxxxx
January 12, 2005
Page 5
14. Xxxxxxx acknowledges that he has been given a period of at least
twenty-one (21) days to review and consider this letter agreement before signing
it. Xxxxxxx further acknowledges that he had the opportunity to use as much of
the twenty-one (21) day period as he wished prior to signing.
15. Xxxxxxx acknowledges that he has been advised by the Company that this
letter agreement is a binding legal document. Xxxxxxx acknowledges that the
Company advised him to consult with an attorney, which he has done, before
signing this letter agreement.
16. Xxxxxxx understands that he may revoke this letter agreement within
seven (7) days after he signed it (the "Revocation Period") and that this letter
agreement is not effective until this revocation period has passed. To revoke
this letter agreement, Xxxxxxx must deliver a written notice of revocation to
Xxxxxx X. Xxxxx, Chairman, President and Chief Executive Officer, Res-Care, Inc.
at 00000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, by no later than the
close of business on the seventh day after he signed this letter agreement.
Xxxxxxx understands that if he revokes this letter agreement, it shall not be
effective or enforceable.
17. The parties agree that this letter agreement and the surviving
provisions of the Employment Agreement set forth the entire agreement between
Xxxxxxx and the Company. Xxxxxxx acknowledges that the Company has not made any
promises to him other than in this letter agreement, and that no amendment may
be made to this letter agreement unless in writing and signed by Xxxxxxx and the
Company. Xxxxxxx acknowledges that he has not been coerced or intimidated or
threatened in any way and that he signs this letter agreement knowingly and
voluntarily.
18. The invalidity or unenforceability of any particular provision of this
letter agreement shall not affect the other provisions hereof and this letter
agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.
19. This letter agreement is executed and delivered in, and shall be
governed by, enforced and interpreted in accordance with the laws of, the
Commonwealth of Kentucky. The parties hereto agree that the federal or state
courts located in Kentucky shall have the exclusive jurisdiction with regard to
any litigation relating to this letter agreement and that venue shall be proper
only in Jefferson County, Kentucky, the location of the principal office of the
Company.
20. All notices, requests, demands and other communications required or
permitted to be given or made under this letter agreement, or any other
agreement executed in connection therewith, shall be in writing and shall be
deemed to have been given on the date of deposit in the United States mail
postage prepaid by registered or certified mail, return receipt requested, to
Xxxxxxx at the address set forth on the first page of this letter agreement,
with a copy to him at 00000 X. Xxxxxx Xxxxx, Xxx Xxxx Xxxx, Xxxxxxx 00000, and
to the Company, addressed to the Chairman at the address set forth in paragraph
16 hereof (or at such other address as shall hereafter be designated by either
party to the other party by notice given in accordance with this paragraph). All
payments to Xxxxxxx as provided in this letter agreement shall be made to
Xxxxxxx by direct deposit to the bank account
Xxxxxxx X Xxxxxxx
January 12, 2005
Page 6
listed on Exhibit D attached hereto, unless Xxxxxxx shall otherwise direct in
writing.
If the foregoing accurately reflects your understanding of the agreement
of the parties, please sign both originals of this letter agreement and return
an original to the undersigned.
Sincerely,
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Chairman, President and Chief
Executive Officer
I ACKNOWLEDGE AND REPRESENT TO THE COMPANY THAT I HAVE CAREFULLY READ THIS
LETTER AGREEMENT. I UNDERSTAND IT AND HAVE NO QUESTIONS ABOUT WHAT IT MEANS. I
HAVE NOT BEEN FORCED OR INTIMIDATED IN ANY WAY TO SIGN IT, AND I AM KNOWINGLY
AND VOLUNTARILY ENTERING INTO IT. I ACKNOWLEDGE THAT I HAVE CONSULTED WITH AN
ATTORNEY BEFORE SIGNING THIS AGREEMENT.
/s/ Xxxxxxx X Xxxxxxx
Xxxxxxx X Xxxxxxx
Dated: 1/13/05
EXHIBIT A
To Whom It May Concern:
I hereby resign as a director and/or officer of the corporations listed on
the attached Schedule 1 effective December 31, 2004 (or such earlier date to the
extent any resignation has been previously delivered).
Signed,
/s/ Xxxxxxx X Xxxxxxx
Xxxxxxx X Xxxxxxx
SCHEDULE 1
Res-Care, Inc.
The Academy for Individual Excellence, Inc.
Alternative Youth Services, Inc.
General Health Corporation, dba Arizona
Youth Associates
New Summit School Corporation
Youthtrack, Inc.
EXHIBIT B
[RES-CARE LOGO]
ANNUAL EMPLOYMENT ELIGIBILITY CERTIFICATION FORM
I, __William J Ballard______________ (print name), understand that as a
condition of continued employment with ResCare I agree to the following
statements and acknowledge the information stated by writing my initials next to
each item listed.
_______WB_______ A. During my employment, I have notified my supervisor and/or
Human Resources Representative of any charges and/or
convictions of criminal offenses that have occurred.
_______WB_______ B. I also certify that I have not been listed by any federal,
state or local agency as debarred, excluded or otherwise
ineligible for participation in any federally, state or
locally funded health care programs.
_______WB_______ C. I certify that I have re-read and understand the Code of
Conduct and agree to abide by it during the entire term of my
employment. I acknowledge that I have a duty to report any
alleged or suspected violation of the Code of Conduct. I am
not aware of any possible violation of the Code of Conduct. I
understand that any violation of the Code of Conduct or any
other corporate compliance policy or procedure is grounds for
progressive corrective action, up to and including termination
from employment.
_______WB_______ D. I have completed all required training related to my job
responsibilities, as outlined by my supervisor. I have
maintained any certifications and/or licenses required for my
position and re-certify that my educational credentials are
true.
_______WB_______ E. I am familiar with ResCare's Drug and Alcohol-Free
Workplace policy and am in compliance with that policy.
_______WB_______ F. I am aware of ResCare's policy on the Prohibition of
Harassment and have not violated or witnessed any violations
of that policy.
_______WB_______ G. I am aware of ResCare's policy on Affirmative Action/Equal
Employment Opportunity.
_______WB_______ H. I am familiar with ResCare's Violence in the Workplace
Policy and am in compliance with that policy.
_______WB_______ I. I have reported any violations that I may have witnessed
pertaining to any ResCare policy or any violations of
international, federal, or state/provincial laws with regard
to my employment to local/regional management or the
Compliance Department.
1. PAGE 2
_______WB_______ J. I further understand that this re-certification does not
constitute a written contract at this time or at any time in
the future and that my employment is strictly at-will
employment.
Please describe any information that is contrary to the statements made above:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Xxxxxxx X Xxxxxxx
--------------------------
Employee Name (Print Only)
/s/ Xxxxxxx J Ballard____________________________ ____________
Employee Signature Date
_________________________________________________ ____________
Human Resources Representative Signature Date
_________________________________________________ ____________
(a) Witness Signature (if necessary) Date
(b) Return this form to:
The original is to be filed in the employee's personnel file.
A copy may be provided to the employee.
(FORM TO BE COPIED FRONT/BACK; PAGES ARE NOT TO BE SEPARATED)
EXHIBIT D
ACCOUNT INFORMATION FOR DIRECT DEPOSIT
Bank: __________________________________
__________________________________
__________________________________
ABA #: _________________________________
Account Name: _______________________________
Account #: _____________________________
