EMPLOYMENT AGREEMENT
Exhibit 10.1
This EMPLOYMENT AGREEMENT (“Agreement”), by and among Xxxxxxx X. Xxxx XX, (“Employee”),
Heartland Employment Services, LLC, an Ohio limited liability company (the “Company”), and Manor
Care, Inc., a Delaware corporation (“Manor Care”) is entered into as of May 1, 2006.
RECITALS
A. The Company is a subsidiary of Manor Care and is the employer corporation for employees
providing services for or on behalf of Manor Care and its direct and indirect subsidiaries (“Manor
Care Subsidiaries”).
B. Manor Care and the Company have agreed that Employee will be employed by Company in the
position and at the base rate of pay set forth on Schedule I in accordance with the provisions
hereof; Manor Care has agreed that Employee will be elected an officer of Manor Care as set forth
on Schedule I.
C. The Company has further agreed to provide either directly or through a Manor Care
Subsidiary severance benefits to Employee upon a termination of Employee’s employment resulting
from certain specified events.
D. The Company has further agreed to provide certain employee benefits to Employee as
specified herein.
E. The Employee has agreed to be employed by Company in accordance with the provisions hereof
including certain non-competition/non-solicitation obligations which apply during Employee’s
employment and for a specified period thereafter.
EVENTS
In consideration of the foregoing, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Employee, Manor Care and the Company hereby agree as
follows:
1. Salary and Position. Effective May 1, 2006, Company shall employ Employee in the
job and at the base rate of pay shown on Schedule I. Employee shall be entitled to participate in
the benefit programs referenced on Schedule II hereof as determined by the Chief Executive Officer
of the Company and, to the extent required, approved by the Manor Care Board of Directors.
2. At-Will Employment. Employee’s employment with the Company is not for any
specified term and may be terminated by Employee or by the Company at
any time for any reason, with
or without cause.
3. Entire Agreement. This Agreement and the agreements and understandings which have
been or may be entered into pursuant to the benefit plans and commitments referenced in Schedule II
hereto constitute the complete agreement between and among Employee, Manor Care and the Company
regarding any and all aspects of Employee’s employment and supersede any and all prior written or
oral agreements, understandings or commitments.
4. Prohibition Against Amendment. Employee’s base salary may be increased by the
Company at any time in its sole discretion. The benefit plans set forth on Schedule II may be
improved, reduced or terminated by the Company at any time in its sole discretion to the extent
that such actions apply to all officer-participants in such plans; provided, however, that no
vested or accrued benefit shall be adversely affected. All other terms set forth in this Agreement
may not be modified in any way except by a written agreement signed by Employee and by an
authorized representative of the Company which expressly states the intention of the parties to
modify the terms of this Agreement.
5. Employee Representation Regarding Other Agreements. Employee represents and
warrants to Company and Manor Care that his employment by Company and the fulfillment of his
obligations hereunder do not violate any other agreement under which Employee is currently
obligated, or the parties to any such other agreements have entered into binding undertakings to
waive or not enforce any such provisions. In the event this representation is not accurate, the
provisions of Paragraph 6 hereof shall be null and void.
6. Severance Payment.
(a) Upon the termination of Employee’s employment as a result of Employee’s electing to resign
his employment or to retire without the consent of the Company, no payments shall be required or
made pursuant to this Paragraph 6 except as provided in Paragraph 6(f).
(b) Upon the termination of Employee’s employment by the Company for “Cause”, no payments
shall be required or made pursuant to this Paragraph 6. “Cause” shall mean Employee’s financial
dishonesty, fraud in the performance of his duties, willful failure to perform assigned duties or
the commission of a felony.
(c) Upon the termination of Employee’s employment by the Company for any reason other than
Cause or disability, the Company shall continue payment of Employee’s annual base salary, at the
rate then in effect on the date of such termination, for a period of two (2) years after such date
of termination. The Company shall give thirty (30) days written notice of any such termination
which notice shall specify the date of termination.
(d) Upon the termination of Employee’s employment as a result of the death of Employee, the
Company shall continue payment of Employee’s annual base salary, at the rate then in effect on the
date of such termination, for a period of two years after such date of termination;
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provided, however, that such payments shall be offset by any survivor benefits,
excluding life insurance proceeds, received by Employee’s spouse or other designated beneficiary
under the Company’s plans, programs and policies.
(e) Upon the termination of Employee’s employment as a result of his becoming unable to
perform his duties due to a disability as established by the award of long-term disability
benefits under the Company’s long-term disability plan, the Company may terminate Employee’s
employment by giving Employee thirty (30) days written notice of its intention to terminate. In
such event, Company shall continue payment of Employee’s annual base salary, at the rate then in
effect on the date of such termination, for a period of two (2) years after such date of
termination; provided, however, that such payments shall be offset by any
disability benefits received by Employee, or his legal guardian, under the Company’s plans,
programs and policies.
(f) Upon termination of Employee’s employment for any reason, voluntarily or involuntarily,
with or without Cause, Employee shall be entitled to such rights as he otherwise has under the
benefit programs listed on Schedule II, as amended from time to time, in the circumstances of his
particular termination.
7. Non-Competition/Non-Solicitation.
(a) Covenant Not to Compete. Employee covenants and agrees that during the period of
Employee’s employment hereunder and for a period of two (2) years following the termination of
Employee’s employment, including without limitation termination by the Company for cause or without
cause, Employee shall not, in the United States of America, engage, directly or indirectly, whether
as principal or as agent, officer, director, employee, consultant, shareholder or otherwise, alone
or in association with any other person, corporation or other entity, in any Competing Business.
For purposes of this Agreement, the term “Competing Business” shall mean any person, corporation or
other entity engaged in providing skilled nursing, assisted living, home health, hospice or
rehabilitation services or providing or attempting to provide any other product or service which is
the same as or similar to products or services sold or provided by the Company or any Manor Care
Subsidiary within the two (2) years prior to termination of Employee’s employment hereunder.
(b) Non-Solicitation of Customers. Employee agrees that during his employment with
the Company he shall not, directly or indirectly, solicit the business of, or do business with, any
customer or prospective customer of the Company or any Manor Care Subsidiary for any business
purpose other than for the benefit of the Company or a Manor Care Subsidiary. Employee further
agrees that for two (2) years following termination of his employment with the Company, including
without limitation termination by the Company for cause or without cause, Employee shall not,
directly or indirectly, solicit the business of, or do business with, any customers or prospective
customers of the Company or any Manor Care Subsidiary; provided, however, that this provision shall
not apply to soliciting to provide or providing any services which the Company or any Manor Care
subsidiary does not provide, or has not traditionally sought to provide.
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(c) Non-Solicitation of Employees. Employee agrees that, during his
employment with
the Company and for two (2) years following termination of Employee’s employment with the Company,
including without limitation termination by the Company for cause or without cause, Employee shall
not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of
the Company to leave the employment of the Company for any reason whatsoever, or hire any employee
of the Company except into the employment of the Company; provided, that the foregoing shall not
apply to any employee hired through a general hiring process without any direct or indirect
involvement by Employee in recruiting such person for hire.
8. Headings. Section headings are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
The Company: | Employee: | |||||
Heartland Employment Services, LLC | /s/ Xxxxxxx X. Xxxx XX | |||||
Xxxxxxx X. Xxxx XX | ||||||
By:
|
/s/ Xxxx X. Xxxxxx | |||||
Its:
|
President | |||||
Manor Care, Inc. | ||||||
By:
|
/s/ Xxxx X. Xxxxxx | |||||
Its:
|
President |
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SCHEDULE I
Employee:
|
Xxxxxxx X. Xxxx XX | |
Current Base Rate:
|
$300,000 | |
Job Title:
|
Vice President, General Counsel and Secretary |
SCHEDULE II
1. | Annual Incentive Plan | |
2. | Equity Incentive Plan | |
3. | Senior Management Savings Plan for Corporate Officers | |
4. | Senior Executive Life Insurance Plan | |
5. | Relocation assistance pursuant to Company policy as modified and approved by the Chief Executive Officer (CEO) of the Company. | |
6. | Such other benefit plans and arrangements as the Company provides, from time to time, to salaried employees generally participation in which is approved by the CEO |