Exhibit 10.22
AGREEMENT
This Agreement dated as of ________________, 199____ (this
"Agreement"), between The Hillhaven Corporation, a Nevada
corporation (the "Company"), and ____________________________
(the "Executive").
WITNESSETH:
WHEREAS, the Executive is currently employed by the Company
or one of its subsidiaries as its ______________________________
(the "Position"); and
WHEREAS, the Executive has extensive management experience
in long term care and the operation of the Company, and such
experience is very important to the continued success of the
Company, as well as to the orderly transition of the Company
should a change in corporate control and ownership occur; and
WHEREAS, changes in corporate control and ownership are
common occurrences in the current business environment, which can
be disruptive to a company's business and operations and
detrimental to the best interests of its shareholders; and
WHEREAS, the Company believes that it is in the best
interests of the Company and its shareholders to enter into
agreements with certain key officers, including the Executive, in
order to ensure their retention and to promote their objectivity
in reviewing proposed changes in control which may occur in the
future.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the terms
set forth in this Section shall have the following meanings:
(a) a "Change in Control" of the Company shall be
deemed to have occurred if: (i) any Person, alone or
together with its Affiliates and Associates, is or becomes
the beneficial owner directly or indirectly of securities of
the Company representing 30% or more of the general voting
power of the Company; (ii) during any period of two
consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason
other than death or disability to constitute at least a
majority thereof; or (iii) any Person makes any filing under
Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended, with respect to the Company.
(b) "Person" shall mean an individual, firm,
corporation or other entity or any successor to such entity,
together with all Affiliates and Associates of such Person,
but "Person" shall not include the Company, National Medical
Enterprises, Inc. ("NME"), any subsidiary of the Company or
NME, any Affiliate or Associate of NME, any employee benefit
plan or employee stock plan of the Company, any subsidiary
of the Company, NME or any subsidiary of NME, or any Person
organized, appointed, established or holding Voting Stock
by, for or pursuant to the terms of such a plan or any
Person who acquires 20% or more of the general voting power
of the Company in a transaction or series of transactions
approved prior to such transaction or series of transactions
by the Board of Directors of the Company.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended.
(d) "Voting Stock" means shares of the Company's
capital stock having general voting power, with "voting
power" meaning the power under ordinary circumstances (and
not merely upon the happening of a contingency) to vote in
the election of directors.
(e) "Cause" shall mean: the willful, substantial,
continued and unjustified refusal of the Executive to
perform the duties of his or her office to the extent of his
or her ability to do so; any conduct on the part of the
Executive which constitutes a breach of any statutory or
common law duty of loyalty to the Company; any illegal or
publicly immoral act by the Executive which materially and
adversely affects the business of the Company; the physical
or mental disability of the Executive as determined by the
Board of Directors of the Company and resulting in his or
her inability to perform his or her duties hereunder; or the
death of the Executive.
2. Payments Upon Change in Control.
(a) If a Change in Control of the Company occurs at
any time and if at any time during the [one/two]-year period
thereafter, the Company (i) terminates the Executive without
Cause from the Position or from a comparable or higher position
with the Company, (ii) assigns to the Executive responsibilities
or title materially less than his or her responsibilities and
title as of the date hereof, (iii) reduces his or her salary,
(iv) reduces his or her fringe benefits other than in accordance
with a reduction in fringe benefits applicable to substantially
all employees of the Company, or (v) requires the Executive to
relocate to any location beyond a 30-mile radius of his or her
current principal place of employment, then in any such event,
the Company shall pay the Executive a severance benefit in cash
within 30 days after the occurrence of any such event in an
amount equal to two years' base salary.
(b) Whether or not any payment is made pursuant to
Section 2(a), if a Change in Control of the Company occurs at any
time and the Executive reasonably determines that any payment or
distribution by the Company or any of its Affiliates or
Associates to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including
without limitation any restricted stock, stock option, stock
appreciation right or similar right, or the lapse or termination
of any restriction on or the vesting or exerciseability of any of
the foregoing (individually and collectively, a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or any
successor provision thereto) by reason of being considered
"contingent on a change in ownership or control" of the Company,
within the meaning of Section 280G of the Code (or any successor
provision thereto), or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest
and penalties, being hereinafter collectively referred to as the
"Excise Tax"), then the Company shall pay to the Executive an
additional payment or payments (individually and collectively, a
"Gross-Up Payment"). The Gross-Up Payment shall be in an amount
such that, after payment by the Executive of all taxes required
to be paid by the Executive with respect to the receipt thereof
under the terms of any Federal, state or local government or
taxing authority (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax imposed
with respect to the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payment. The Company shall pay the Gross-Up Payment to
the Executive within 30 days of its receipt of written notice
from the Executive that such Excise Tax has been paid or will be
payable at any time in the future.
3. Assignment; Binding Effect. Neither this Agreement nor
any rights or obligations hereunder may be assigned or pledged by
the Executive. This Agreement and the rights and obligations of
the parties hereunder shall be binding upon, and inure to the
benefit of, the parties hereto, the heirs and legal
representatives of the Executive and the successors and assigns
of the Company.
4. No Right to Employment. Nothing herein shall confer
upon the Executive any right to continue in the employ of the
Company or a subsidiary thereof or shall interfere in any way
with the right of the Company or any subsidiary to terminate such
employment at any time.
5. Severability. Should any provision of this Agreement
be declared illegal or unenforceable by any court of competent
jurisdiction in any action or proceeding, and such provision
cannot be modified to be enforceable, such provision shall
immediately become null and void and the parties shall
renegotiate such provision in good faith, leaving the remainder
of this Agreement in full force and effect.
6. Notices. Any notice to be given hereunder shall be
effective upon receipt, shall be in writing and shall be
personally delivered or sent by registered or certified mail,
postage prepaid to the following address or such other places as
either party shall designate in writing:
If to the Company: The Hillhaven Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to: The Hillhaven Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
If to the Executive: _______________________________
_______________________________
_______________________________
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
8. Attorneys' Fees; Etc. In the event that the Executive
brings any suit, action or other legal proceeding to enforce any
of the terms of this Agreement, and the Executive prevails in any
such suit, action or proceeding, the Company shall reimburse the
Executive for all costs and expenses, including reasonable
attorneys' fees, incurred by or for the account of the Executive
in connection with such suit, action or proceeding. The Company
shall pay such amount within ten days after receipt of the
Executive's demand therefor.
9. Headings. The headings and captions used in this
Agreement are for convenience of reference only, and shall not in
any way limit or affect the construction or interpretation of any
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
THE HILLHAVEN CORPORATION
By: __________________________
Its: _________________________
______________________________
(Type Executive's name here)
