Exhibit 10.8
AGREEMENT
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This Separation Agreement and Release of Claims ("Agreement") is entered
into by Xxxx X. Force and all of her agents, successors and assigns
("Employee"), and Vencor, Inc. ("Vencor") and all companies related to Vencor
and all of its affiliates, directors, officers, supervisors, employees, agents,
successors, assigns, representatives, subsidiaries or related companies, past
and present (collectively, the "Company").
Employee and the Company hereby desire to settle all disputes and issues
related to the resignation of Employee from her services as an employee to
and/or director of the Company.
NOW, THEREFORE, in consideration of the premises and the terms and
conditions contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties agree as follows:
1. Resignation. Employee's employment with Vencor, Inc. has been
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severed and Employee also hereby resigns from all capacities and positions with
the Company, both effective August 25, 1999 ("Date of Termination").
2. Obligations of the Company. Following the execution of this
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Agreement, the Company shall pay Employee her base salary through the Date of
Termination and any amounts owed to Employee pursuant to the Company's standard
reimbursement procedures. In addition, subject to the terms and conditions of
this Agreement (including Section 12), Employee shall be entitled to the
following additional payments and benefits:
(a) $44,325 representing the prorated portion of the Employee's
target bonus for 1999 less amounts previously paid.
(b) 25,972 shares of Vencor common stock representing the
prorated portion of the Employee's Performance Share Award for 1999.
(c) $277,500 representing an amount equal to 1.5 times the
Employee's base salary for 1999.
(d) $166,500 representing an amount equal to 1.5 times the
Employee's target bonus for 1999.
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(e) 60,000 shares of Vencor common stock representing an amount
equal to 1.5 times the number of performance shares to be awarded to the
Employee pursuant to the Vencor, Inc. 1998 Incentive Compensation Plan
(including assumed awards granted under the Vencor, Inc. 1987 Incentive
Compensation Program).
(f) For a period of 18 months following the Date of Termination,
the Employee shall be treated as if she had continued to be an executive for all
purposes under the Vencor Health Insurance Plan and Dental Insurance Plan or the
Company will provide substantially the same coverage arranged by the Company.
Following this continuation period, the Employee shall be entitled to receive
continuation coverage under Part 6 of Title I of ERISA ("COBRA Benefits")
treating the end of this period as a termination of the Employee's employment if
allowed by law.
(g) For a period of 18 months following the Date of Termination,
the Company shall maintain in force, at its expense, the Employee's life
insurance in effect under the Vencor, Inc. Voluntary Life Insurance Benefit Plan
as of the Date of Termination or the Company will provide substantially the same
coverage arranged by the Company.
(h) For a period of 18 months following the Date of Termination,
the Company shall provide short-term and long-term disability insurance benefits
to Employee equivalent to the coverage that the Employee would have had had she
remained employed under the disability insurance plans applicable to Employee on
the Date of Termination. Should Employee become disabled during such period,
Employee shall be entitled to receive such benefits, and for such duration, as
the applicable plan provides.
(i) To the extent not already vested pursuant to the terms of
such plan, the Employee's interests under the Vencor Retirement Savings Plan
shall be automatically fully vested, without regard to otherwise applicable
percentages for the vesting of employer matching contributions based upon the
Employee's years of service with the Company.
(j) The Company shall adopt such amendments to its employee
benefit plans, if any, as are necessary to effectuate the provisions of this
Agreement.
(k) The Company shall take such action as is required to cause
the promissory note, dated June 15, 1998 in the remaining principal amount of
$54,090 (the "Tax Loan") entered into in connection with the loan made to
Employee to cover certain
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taxes owed by Employee, to be amended to provide that the Tax Loan and any
payments scheduled to be made in respect thereof shall not be due and payable
prior to the fifth anniversary of the Date of Termination.
(l) The Company shall take such action as is required to cause
the promissory note entered into in connection with the loan to Employee, dated
April 30, 1998, and as amended September 28, 1998, in an original principal
amount of $486,000 (the "Preferred Stock Loan") to be amended to provide that
(w) the Preferred Stock Loan shall not be due and payable until April 30, 2008,
(x) any payments scheduled to be made in respect to the Preferred Stock Loan
shall not be due and payable prior to the fifth anniversary of the Date of
Termination, (y) if the average closing price of Vencor common stock for the 90
days prior to any interest payment date is less than $8.00, such interest
payment shall be forgiven and (z) during the five-day period following the
expiration of the fifth anniversary of the Date of Termination, the Employee
shall have the right to put the preferred stock underlying the Preferred Stock
Loan to the Company at a price of $1,000 per share. Notwithstanding the above,
this Agreement shall not limit or impair any rights of Employee under the
Agreement dated as of August 17, 1999 between Employee and Vencor Operating,
Inc. concerning certain rights with respect to Preferred Stock of Vencor, Inc.
held by Employee (the "Put Agreement").
(m) Employee shall be credited with an additional 18 months of
vesting for purposes of all outstanding stock option awards to purchase Vencor
common stock and Employee will have an additional 18 months in which to exercise
such stock options.
(n) Employee shall receive the computer which Employee is
utilizing as of the Date of Termination. Employee shall provide the Company with
access to such computer so that Company files and information may be deleted
from the memory.
(o) All commitments made to Employee under paragraphs (a) through
(e) above shall be paid or issued upon the later of 14 days from the Date of
Termination or the expiration of the seven day period referenced in Section 15.
3. Death after Resignation. In the event of the death of Employee
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during the period Employee is receiving payments pursuant to this Agreement,
Employee's designated beneficiary shall be entitled to receive the balance of
the payments; or in the event of no designated beneficiary, the remaining
payments shall be made to Employee's estate.
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4. Employee Acknowledgment and Release. Employee expressly
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acknowledges that the above payments include consideration for the settlement,
waiver, release and discharge of any and all claims or actions arising from
Employee's employment, the terms and conditions of Employee's employment, or
Employee's termination of employment with the Company, including claims of
employment discrimination, wrongful termination, unemployment compensation or
any claim arising under law or equity, express or implied contract, tort, public
policy, common law or any federal, state or local statute, ordinance, regulation
or constitutional provision. Notwithstanding anything contained in this Section
4, this Agreement shall not limit or impair Employee's right to indemnification
under any agreements with the Company or under its certificate of incorporation
or bylaws.
(a) The claims released and discharged by Employee include, but
are not limited to, claims arising under Title VII of the Civil Rights Act of
1964, as amended; the Civil Rights Act of 1991; The Older Workers Benefit
Protection Act ("OWBPA"); the Age Discrimination in Employment Act of 1967
("ADEA"), as amended; the Americans with Disabilities Act ("ADA"); the Fair
Labor Standards Act; the Employee Retirement Income and Security Act of 1974, as
amended; the National Labor Relations Act; the Labor Management Relations Act;
the Equal Pay Act of 1963; the Pregnancy Discrimination Act of 1978; the
Rehabilitation Act of 1973; workers' compensation laws; Kentucky Wage and Hours
Laws, claims before the Kentucky Commission for Human Rights and Kentucky
Revised Statutes sections 341 et seq.
(b) Employee recognizes that by signing this Agreement, she may
be giving up some claim, demand or cause of action which she now has or may
have, but which is unknown to her. Employee also acknowledges that she is giving
up any right to seek future employment with the Company, that the Company has no
obligation to rehire her at any future date, and agrees that she will not apply
for work with the Company.
(c) Employee agrees not to file any charges, complaints, lawsuits
or other claims against the Company that relate in any manner to the Employee's
employment or the resignation or termination of Employee's employment with the
Company.
(d) Employee expressly waives any present or future claims
against the Company for alleged race, color, religious, sex, national origin,
age or disability discrimination or harassment under Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Equal Pay Act
of 1963; the Americans with Disabilities Act; the Family Medical Leave Act; the
Age Discrimination in Employment
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Act of 1967; the Older Workers Benefit Protection Act; the Rehabilitation Act of
1973; or any other federal or state law protecting against such discrimination
or harassment.
(e) Employee acknowledges that the Company has not and does not
admit that it engaged in any discrimination, wrong doing or violation of law on
the Company's part concerning Employee. Employee and the Company agree that by
entering into this Agreement no discrimination, wrong doing, or violation of law
has been acknowledged by the Company or assumed by Employee. Employee and the
Company further acknowledge that this Agreement is not an admission of
liability.
5. Confidentiality. Employee and the Company agree to keep the
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contents and terms of this Agreement confidential and not to voluntarily
disclose the terms or amount of settlement to third parties. The only exception
is that Employee may reveal the terms of this Agreement to her spouse, attorney,
tax preparer or as otherwise required by law. The Company may reveal the terms
of this Agreement to its attorneys, accountants, financial advisors, managerial
employees, and any disclosure required by law or business necessity. Employee
and the Company agree that in the event the terms of this Agreement are
disclosed to the third parties as allowed or required herein, the third parties
will be advised of the obligation to keep the terms of this Agreement
confidential, and will obtain the third party's agreement to abide by the terms
of the confidentiality provisions set forth in this Agreement. In the event
that Employee breaches the confidentiality of this Agreement, Employee
understands that the Company shall have the right to pursue all appropriate
legal relief, including, but unlimited to, attorneys' fees and costs.
6. Public Statement. Employee further agrees not to make derogatory
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or negative remarks or comments about the Company, its affiliates and their
respective directors, officers, shareholders, agents or employees, to any third
parties, and not to otherwise defame the Company in any manner. In the event
that Employee defames the Company, its affiliates and their respective
directors, officers, shareholders, agents or employees, Employee understands
that the Company shall have the right to pursue all appropriate legal relief,
including but not limited to, attorneys fees and costs, and reimbursement of all
monies paid hereunder. Company agrees not to make derogatory or negative remarks
or comments about Employee to any third parties, and not to otherwise defame the
Employee in any manner. In the event that the Company defames Employee, Company
understands that the Employee shall have the right to pursue all appropriate
legal relief, including but not limited to, attorneys' fees and costs.
7. Ability to Revoke.
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(a) Employee acknowledges and agrees that the Company has advised
her and encouraged her to consult with an attorney, and she has consulted with
an attorney regarding this Agreement prior to signing below, and that she has
been given a period of at least twenty one (21) days within which to consider
this Agreement, including waiver of any ADEA and OWBPA age claims before
voluntarily signing this Agreement.
(b) Employee agrees and understands that she may revoke this
Agreement within seven (7) days after signing the Agreement, and that the
Agreement shall not become effective or enforceable until the revocation period
has expired.
(c) Any revocation of this Agreement must be made in writing and
delivered by hand or certified mail to Xxxx X. Xxxxxx, Vencor, Inc., One Vencor
Place, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, before the
expiration of the revocation period.
8. Cooperation. Employee agrees that should the Company request
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Employee's cooperation in connection with litigation, government investigations
or other administrative or legal proceeding, Employee shall cooperate fully with
the Company or its designated agents. Employee further agrees to cooperate
fully in disclosing to the Company or its designated agents, any information
which Employee obtained during the course and scope of her employment with the
Company, and to which other employees of the Company were not privy. If
Employee's cooperation in any individual matter would result in more than one
hour of service by Employee or if Employee's cooperation in all matters would
result in more than two hours of service in any one calendar month, then the
Company shall reimburse Employee for such services at an hourly rate of $90 per
hour, provided, however, Employee shall not be entitled to any reimbursement in
any matter for which the Company is providing Employee with indemnification.
Any request for reimbursement shall include, in reasonable detail, the services
provided, the length of time of providing the services and the date the services
were provided. In addition, the Company shall promptly reimburse Employee for
all reasonable, pre-approved expenses incurred by Employee in performing the
services requested by the Company, provided that Employee properly accounts
therefor in accordance with the Company's established policies.
9. Disputes. Any dispute or controversy arising under, out of, or
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in connection with this Agreement shall, at the election and upon written demand
of either party, be finally determined and settled by binding arbitration in the
City of Louisville, Kentucky, in accordance with the Labor Arbitration rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court
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having jurisdiction thereof. If the Employee is successful in any such
arbitration, the Company shall pay all costs of the arbitration and all
reasonable attorneys' and accountants' fees of Employee incurred in connection
therewith, including any litigation to enforce any arbitration award.
10. Successors. This Agreement is personal to Employee and without
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the prior written consent of the Company shall not be assignable by Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Employee's legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
11. Other Severance Benefits. Employee hereby agrees that in
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consideration for the payments to be received under this Agreement, Employee
waives any and all rights to any payments or benefits under any plans, programs,
contracts or arrangements of the Company that provide for severance payments or
benefits upon a termination of employment, including, without limitation, the
Employment Agreement between Employee and Vencor Operating, Inc. dated as of
July 28, 1998 and the Change in Control Severance Agreement between the Employee
and Vencor Operating, Inc. Notwithstanding the above, this Agreement shall not
limit or impair Employee's rights under the Vencor, Inc. Supplemental Executive
Retirement Plan.
12. Withholding. All payments, stock issuances and forgiveness of
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debt to be made to Employee hereunder will be subject to all applicable required
withholding of taxes.
13. No Mitigation. Employee shall have no duty to mitigate her
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damages by seeking other employment and, should Employee actually receive
compensation from any such other employment, the payments required hereunder
shall not be reduced or offset by any such compensation.
14. Execution by Employee. Employee will execute this Agreement and
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deliver the executed Agreement to Xxxx X. Xxxxxx, Vencor, Inc., 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
15. Termination of Waiting Period. After receipt of the executed
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Agreement from Employee, and after the expiration of the seven (7) day waiting
period referenced in Section 7(b) of this Agreement, the Company will execute
the Agreement.
16. Voluntary Action. Employee acknowledges that she has read and
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fully understands all of the provisions of this Agreement and that she is
entering into this Agreement freely and voluntarily.
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17. Notices. Except as expressly provided in this Agreement, any
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notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or sent by
telephone facsimile transmission, personal or overnight couriers, or registered
mail with confirmation or receipt, addressed as follows:
If to Employee:
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Xxxx X. Force
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to Company:
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Vencor Operating, Inc.
One Vencor Place
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Legal Department
18. Governing Law. This Agreement shall be governed by the laws of
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the Commonwealth of Kentucky.
19. Waiver of Breach and Severability. The waiver by either party of
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a breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by either party. In the
event any provision of this Agreement is found to be invalid or unenforceable,
it may be severed from the Agreement and the remaining provisions of the
Agreement shall continue to be binding and effective.
20. Entire Agreement; Amendment. This Agreement contains the entire
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agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter hereof. No provisions of this Agreement
may be modified, waived or discharged unless such modification, waiver or
discharge is agreed to in writing signed by Employee and a designated officer of
the Company. Notwithstanding the above, this Agreement shall not limit or impair
any rights of Employee under the Put Agreement.
21. Headings. The headings in this Agreement are for convenience
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only and shall not be used to interpret or construe its provisions.
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22. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VENCOR, INC.
By:/s/ Xxxx X. Xxxxxx
Title: Chief Administrative Officer
EMPLOYEE
/s/ Xxxx X. Force
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Xxxx X. Force
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